PER CURIAM.
Appellant William Campbell appeals from the December 19, 2012 final agency decision of the Civil Service Commission (Commission), which affirmed his layoff from his employment with the City of Hoboken (City) for reasons of economy and efficiency. For the following reasons, we affirm.
We derive the following facts from the hearing before the Administrative Law Judge (ALJ).
At the time of his layoff on September 24, 2010, Campbell held the title of Assistant Public Information Officer in the Administration Department.
The position required the employee to, among other things, "[a]ssist in writing scripts for radio and television presentation ... [and] the preparation and distribution of news stories, bulletins, pamphlets, circulars, and other informational materials designed to acquaint the general public with the functions, aims, programs, regulations, policies, and procedures" of the jurisdiction, and collecting and tabulating statistical information" The position also required the employee to "utilize various types of electronic and/or manual recording and computerized information systems."
Campbell's actual job duties involved disseminating non-political, impartial information from the Mayor's office through press releases, newsletters, proclamations, and the City's website, preparing speeches, sometimes coordinating special events, and coordinating with the press as needed. Although he wrote content for the City's website, he never physically posted it himself, and his work was directed and approved by others, including the Mayor. He was not involved in policy decisions and was not part of the Mayor's "inner circle" during any of the administrations under which he served. He did not review requests for proposals and did not believe that it was part of his job to do so. He also had no experience in website design, had no social media responsibilities, and did not believe it was his job to be involved in the City's "green initiatives."
In March 2008, Campbell suffered a stroke and was out of work for eight months. A few months prior to his stroke, the then-Mayor provisionally hired Paul Drexel for special projects. Drexel took over Campbell's duties while Campbell was on leave. When Campbell returned, he and Drexel had a "shared relationship," and Drexel assigned work to him.
In July 2009, Peter Cammarano became Mayor. He was in office for less than a month when he was forced to resign after his arrest for taking bribes from an alleged real estate developer in a government sting operation. Dawn Zimmer became acting Mayor in July 2009, and was later elected Mayor in her own right.
Campbell testified that in September 2009, Mayor Zimmer called him into her office and said that she heard there was a note on his desk indicating he was having lunch with real estate developers. He claimed the Mayor told him, "[w]e do not associate with real estate developers in this office." Campbell denied meeting any real estate developer and the Mayor never produced the alleged note. Mayor Zimmer denied this conversation occurred.
In 2008, due to fiscal mismanagement, the State appointed Judith Tripodi to take over the City's fiscal situation pursuant to the Local Government Supervision Act,
During Tripodi's tenure, the State audited the City's police and fire departments. The fire department audit was still ongoing in the summer of 2010, so the City made no changes in that department at that time. After the audit was completed in April 2011, there were no fire department layoffs because numerous retirements made layoffs unnecessary.
The police department audit recommended a reduction in the police force from 158 positions to 112, including reducing four captain positions to three, eighteen lieutenant positions to twelve, thirty sergeant positions to twenty-six, and 150 patrol officer positions to 137. Mayor Zimmer, City Business Administrator Arthur Liston, and the City's Public Safety Director discussed the State's recommendations and decided that the reductions were too severe. Nevertheless, as a result of the audit, the City changed the police department's table of organization to reflect certain reductions, including all of the captain, lieutenant, and sergeant positions.
Because of the significant tax increase imposed on City residents, as well as the declining economy, Mayor Zimmer sought to make the government more cost-efficient. She wanted each department to reduce expenses by ten percent and instructed department directors to review their respective departments for cost savings. The City Council agreed that the City's budget had to be reduced.
As part of it cost-reduction efforts, the City laid off all provisional employees, including Drexel, and considered, but rejected, furloughs because they offered only short-term savings. Liston sought to obtain concessions from three workers' union, but no agreements were reached. The City considered reducing the number of supervisors, restructuring departments and cutting back the heat at night. The City also audited health care and pension benefits to make sure only qualified people were receiving them.
The City also retained Judith Gottlieb as a civil service consultant with respect to a layoff plan. In connection with her duties, Gottlieb asked Campbell and other employees to provide written descriptions of their job duties. Campbell gave his job description to Tripodi, who was to pass it on to Gottlieb.
Ultimately, for "reasons of economy and efficiency," Liston submitted a layoff plan to the State, dated July 21, 2010. Prior to the submission, the City's personnel officer, Michael Korman, identified the salary and benefits of the affected employees to determine the cost savings. Liston consulted with Gottlieb about the job descriptions of various employees and "looked at everything that [he] could possibly look at to see where ... there was money being spent that shouldn't have been spent."
The City did not conduct a formal cost savings analysis until after it submitted the layoff plan because, as Liston testified, the health benefits and pension audits were ongoing. He also testified there was "some documentation" on the audits. Korman testified that spreadsheets, which listed the cost savings from the eliminated positions, were also made after the City submitted the layoff plan. However, he also testified that once the State approved the layoff plan "and we knew who the individuals were that were identified in the plan, the demotion plan and the layoff plan, then [he] would be able to take the data out and put in the other numbers and see what the total savings to the City would be for the demotions and the layoffs." Korman did not testify that no cost savings were considered prior to the plan's submission, as appellant claims in this appeal. To the contrary, Korman testified that they "looked at the numbers before, sure. You're going to look at your numbers in your plan, of course" before the plan was submitted to the State. He explained that the total cost savings could not be determined until after the State approved the plan, and was clear that the City considered the cost savings prior to submitting the layoff plan.
The layoff plan, which was effective on September 24, 2010, called for reductions in the police department and other civil service positions. Regarding the police department, the plan included the demotion of one police captain, seven lieutenants, and eleven sergeants, and the layoff of eighteen police officers. Outside of the police department, the layoff plan included the termination of four full-time employees in the Administration Department, two full-time employees in the Human Services Department, and five full-time employees and seven part-time employees in the Environmental Services Department.
In August 2010, Campbell received notice that he would be being laid off for "reasons of economy and efficiency," effective September 24, 2010. The other non-police layoffs occurred on September 24 as well, but some were rescinded as a result of transfers, leaving six full-time and six or seven part-time, non-police employees who were actually separated from service, including Campbell. Liston testified that even though not all employees were separated, the City still realized cost savings because some of the retained employees were transferred to the Parking Utility Authority, which had a self-sustaining budget, and others filled vacant positions. No new employees were hired in the Environmental Services Department or the Human Services Department to replace those who were laid off, and no one ever filled the position of Public Information Officer or Assistant Public Information Officer.
Prior to the layoff date, on September 15, 2010, police unions staged a rally to stop the police layoffs. Between September 15 and September 24, 2010, Mayor Zimmer rescinded every police layoff and half of the demotions. She denied doing so because of the rally; rather, she and Liston asserted that retirements and finalization of a shared services agreement that was in negotiations before the rally rendered the layoffs unnecessary.
After the City submitted the layoff plan to the State, but before it was implemented, the City finalized an agreement with its Housing Authority for shared services that increased the City's revenues by $550,000. Although the City had shared services agreements with the Housing Authority in the past, those agreements required police officers who were assigned to patrol the City's housing projects to be paid off-duty overtime at their off-duty hourly rate of $50 per hour, per officer, by the Housing Authority, not to exceed $540,000 per year. Under the new agreement, dated October 6, 2010, the Housing Authority would pay an annual sum to the City for dedicated officers rather than an hourly rate per officer. The officers were assigned to the housing projects as part of their regular job duties and therefore did not receive overtime pay from the City. While the prior agreement stated that the annual payment could not exceed $540,000, the new agreement guaranteed $540,000 to the City, which funded the salaries of the officers assigned to the Housing Authority.
Liston testified that the City extended the effective date of the police layoffs to December 2, 2010, "to get some movement in retirement[s] so we [w]ould not have to [lay off] as many people or demote as many people." Prior to that date, two superior officers slated for layoff elected to retire, so the City rescinded their layoffs. Eight superior officers were eventually demoted. By the time of the hearing before the ALJ, all of those officers had been promoted when positions became vacant due to retirements. None was promoted absent a retirement.
Mayor Zimmer did not know whether the layoff plan achieved the City's cost-savings goals. When asked what the savings were, Liston did not say there were no cost savings; rather, he said he did not have that information at the ready and "would have to sit down with their salaries ... and health benefits ... and do a whole calculation." Nevertheless, the evidence revealed that the City realized the following savings: $86,000 from Campbell's salary and benefits; $456,000 from the laid-off full-time civilian employees; and $103,000 per year from the laid-off part-time employees.
In the fiscal year before the layoffs, July 1, 2009 to June 30, 2010, the City had a surplus of $20 million. In 2010, the City transitioned to a calendar year budget cycle and established a transitional budget, which ran from July 1, 2010 to December 31, 2010. Liston testified that the balance of surplus that went into the transition budget was $18 million, but only $11.8 million was "usable" surplus. The City could not use the remaining surplus because its use was restricted. Some of the surplus represented receivables or grant revenue not yet obtained. In addition, the City had to reserve funds to pay for its obligations under an outstanding collective bargaining contract with the police and firefighters, which was expected to include retroactive pay increases from 2008 that eventually cost the City approximately $10 million. The City also used the surplus to stabilize the tax rate so if there were unforeseen costs, there would not be "spikes and increases" to the taxpayers. Furthermore, the City needed $1.6 million of the surplus each year for seven years to satisfy the State-mandated schedule to pay off the $11 million over-expenditure in 2008. The City had also deferred necessary infrastructure repairs and maintenance that had to be addressed.
The standard surplus for municipalities was about four or five percent of their budget, but in the economic climate of that time, many municipalities, including Hoboken, had no surpluses some years. A municipality's bond rating, which affected its borrowing costs, was impacted by the amount of surplus it carried. Liston testified that the layoffs had no effect on the surplus because "[s]urplus has nothing to do with the layoffs."
During the layoffs, the City implemented a hiring and salary freeze. Shortly before Mayor Zimmer became Mayor and before the freeze, on August 12, 2009, the City hired Daniel Bryan as a Confidential Aide. The City had no official job description for this position, as it was an unclassified, at-will position. On May 10, 2010, the City changed Bryan's title to Confidential Assistant to the Mayor. He eventually became the Mayor's Chief of Staff. His duties were "always expanding" and included coordinating with the City Council, dealing with constituents, making every-day decisions, and sometimes writing press releases.
Bryan and Mayor Zimmer discussed his salary at the time of his hire in August 2009, and it was set at $35,000 per year. However, according to Mayor Zimmer, Bryan's salary was fifty percent lower than others in comparable positions and he was promised an increase at the time he was hired. In fact, the previous mayor had hired a Chief of Staff at a salary of $125,000 per year. Mayor Zimmer's salary agreement with Bryan was not memorialized or known to the City Council.
Effective July 1, 2010, Bryan received an $11,100 raise. The City also paid $600 to $700 for his attendance at a training program on the fundamentals of local government at Rutgers, which Liston said was "very important" to Bryan's job. Liston testified it was "common" to send people for training and the Rutgers course was not offered all the time so Bryan had to go when it was offered, despite the City's budget woes.
The City hired Liston as the Business Administrator, effective May 3, 2010. He was the City's "chief administrative officer" who oversaw personnel, purchasing, and all department directors and was the "appointing authority" for Civil Service purposes. The City's records listed his yearly salary at $140,184, but Liston and Mayor Zimmer claimed that his agreed-upon salary was $150,000, which was discussed at a public meeting and videotaped and put to a resolution. When Liston started his job, he discovered that the salary ordinance had not been adjusted to allow for that salary, so he initially took only the salary permitted under the current ordinance. In July 2010, the City Council approved a resolution raising the maximum yearly salary of his position to $150,000, and his salary was adjusted retroactively. Liston insisted that this was not a "raise," but merely the salary he was promised when he was hired.
The City also hired Juan Melli, effective May 11, 2010, in the unclassified position of Confidential Aide to the Mayor; however, his "public title" was "Communications Manager." His starting salary was $60,000 per year, but effective July 1, 2010, it was increased to $75,000 per year. According to Liston and Mayor Zimmer, the increase was agreed upon at the time Melli was hired because he would not receive health insurance. Melli's salary was not discussed with the City Council prior to his hire, and a note sent to Human Resources upon his hiring did not indicate his salary was to increase at any point.
Melli, who had a Ph.D. in chemical engineering and worked as Governor Corzine's Director of Media, was hired based on his extensive experience in social media, web design and maintenance, his writing ability, and his interest in the City's "green" initiatives. There was no written job description for his position; his job was to do whatever Mayor Zimmer wanted him to do.
Mayor Zimmer described Melli as part of her "kitchen cabinet," which had input into all decisions. He could do the jobs of "three people" and took over Campbell's duties of writing press releases. In addition, Melli created and managed the City's Facebook and Twitter accounts and provided content as well as technical expertise to the City's website. Specifically, he created a "Moving to Hoboken" section of the website, as well as a "Visitors" section. He also added a translation option to the website, created Twitter accounts for the Department of Transportation and the HOP shuttle, and updated them regularly. He moved the City's website from one server to another when the website became infected with a virus. Due to his technical expertise, the City Council meetings went from being recorded on DVD to being broadcast on television. He also researched, selected, and configured a new constituent service request system known as the "Q-alert system," and trained employees on how to use it. He served on the "green team" to make Hoboken bike-friendly, wrote bid specifications, researched issues to help the Mayor make decisions, and evaluated requests for proposals. He also sometimes drafted resolutions. He was not involved in updating the Mayor's personal Facebook page or her political websites.
Bryan's, Liston's and Melli's salary changes were not reflected in the layoff plan submitted to the State, even though they were known prior to the plan's submission. Further, in November 2010, after the layoff plan was implemented, the City hired two attorneys; paying one attorney $60,000 per year and the other $89,500 per year. In addition, the City Council approved the hiring of one full-time and one part-time police aide.
Liston testified that he recommended eliminating Campbell's entire office, not just Campbell's position, and he believed that Campbell's position "was a waste" and the duties could be absorbed by others. Specifically, Campbell's duties were absorbed by Melli, Bryan, and Mayor Zimmer's confidential secretary, who took over writing proclamations.
The ALJ concluded that Campbell failed to prove that his layoff was for reasons other than economy, efficiency or other related reasons. Although acknowledging that the City had a surplus at the time of the layoffs, the ALJ found that "any suggestion that there was no goal to achieve economy or efficiency is misplaced" because
Noting again that Tripodi, on behalf of the State, suggested layoffs, the ALJ concluded that the City "convincingly established that real fiscal concerns existed at the time [of the layoffs], based not only on internal analyses, but on the conclusions of State monitors."
The ALJ found credible Mayor Zimmer's and Liston's testimony about the reasons for the salary increases for Bryan, Melli, Liston and the new hires. The ALJ concluded that these factors did not establish bad faith.
Regarding Campbell's claim that the City abolished his position for political reasons, the ALJ found as follows:
The ALJ concluded as follows:
Following an independent review of the record, the Commission accepted and adopted the ALJ's factual findings and conclusions, affirmed Campbell's layoff, and dismissed his appeal.
On appeal, Campbell contends the Commission's decision was arbitrary, capricious and unreasonable because: (1) in view of the City's surplus, the City's claim of economic necessity as the basis for his layoff was against the weight of the evidence; (2) the pay raises to Bryan, Melli and Liston, the new hires immediately before and after the layoff, and promotion of police officers who were demoted established bad faith; (3) his layoff was politically motivated; and (4) the City failed to conduct a cost analysis or present other financial documentation supporting the layoffs.
Our review of the Commission's decision is limited.
"The substantiality test is satisfied when the evidence is of such quality as a reasonable mind might accept as adequate to support the conclusion."
A permanent civil service employee "may be laid off for economy, efficiency or other related reason."
"The power of a municipality to abolish a position in the classified civil service, or to dispense with the services of one holding such position, cannot be questioned where such action is motivated by a bona fide desire to effect economies and increase municipal efficiency."
It is not sufficient for an employee to show that a layoff is uneconomical.
Further, "[e]vidence that other motives in addition to governmental economy and efficiency were present is not particularly significant if, in fact, the position is useless and its abolition is in the public interest."
"The presumption of good faith attends the municipal action, and the burden is on petitioner to show bad faith" by a preponderance of the evidence.
We have considered Campbell's contentions in light of the record and applicable legal principles and conclude there was substantial credible evidence in the record supporting the Commission's decision.
There was no dispute that the City suffered fiscal mismanagement in the years immediately preceding the layoffs. The City had overspent its budget in 2008 by $11 million, which was a factor in the State taking over the City's fiscal affairs. The State's appointee, Tripodi, not a politician or a City employee, recommended layoffs in 2009, but no plan was implemented at that time. Instead, she imposed a substantial tax increase of sixty to eighty percent on the City's taxpayers. Aware of this financial burden on City residents, Mayor Zimmer sought to stabilize or reduce taxes, and her chosen method was to reduce City employees. Given the City's financial history and enormous tax hike, the Mayor's desire to trim the City's budget through layoffs was grounded in a legitimate economic concern. The City had to make changes to avoid regressing to the dire financial circumstances that necessitated the appointment of a State fiscal monitor to take control of its operations. The fact of a surplus or that the cost savings realized from the layoffs ultimately were small compared to the total budget is not evidence of bad faith.
Further, there was no evidence substantiating hostility or personal animus toward Campbell or political motivation in his layoff. Melli's expansive job responsibilities far exceeded those of the Assistant Public Information Officer, according to both Campbell and the Civil Service job specifications. Campbell's job was not merely maintained in substance; rather, his duties were largely absorbed by Melli. Moreover, the fact that Melli was able to perform Campbell's job duties as well as a host of other duties supports the ALJ's finding that the position of Assistant Public Information Officer was unnecessary and its elimination was economical for the City. Notably, Melli, whose salary and benefits totaled $75,000, performed many more functions than Campbell, whose salary and benefits totaled $86,000. Thus, there is substantial evidence in the record that the City achieved a degree of both economy and efficiency in Campbell's layoff.
Applying our limited scope of appellate review—according due deference to both the Commission's expertise and the ALJ's fact-finding role—we sustain the final agency decision. The decision is amply supported by the record, in compliance with the law, and neither arbitrary nor capricious.
Affirmed.
