Jeffrey Chiesa, a former U.S. senator, New Jersey attorney general and aide to Gov. Chris Christie, will lead the state's takeover of Atlantic City's finances.
New Jersey's Department of Community Affairs announced late Monday that Local Government Services Director Timothy Cunningham has named Chiesa as his designee in charge of Atlantic City's financial matters.
Chiesa will be empowered under the Municipal Stabilization and Recovery Act approved in May to alter outstanding debt and municipal contracts in the struggling gambling hub. The DCA rejected a five-year recovery plan the city proposed and the Local Finance Board voted on Nov. 9 to implement state intervention.
"I am committed to improving essential government and community services for the people of Atlantic City," said Chiesa, who was appointed by Christie in 2013 to fill the Senate seat vacated by the death of Frank Lautenberg. "I will listen to the people and work hand in hand with local stakeholders to create solutions that will prevent waste and relieve generations of taxpayers from the burden of long-term debt. We will put Atlantic City back on a path to fiscal stability."
The DCA noted in its announcement that Mayor Donald Guardian and the city council will maintain day-to-day municipal functions, but Chiesa in conjunction with Cunningham will implement a recovery plan.
"Although we fought very hard to keep our sovereignty and we will continue to review all of our legal options, Senator Chiesa has a reputation of being fair and a man of integrity," said Guardian in a statement. "He has served the State of New Jersey honorably and we will continue to work with him and the State to resolve our fiscal challenges."
Chiesa, a Republican, was a senator for a bit more than four months; he didn't run in the special election to replace Lautenberg, which was won by Democrat Cory Booker. Prior to his Senate appointment, Chiesa worked as New Jersey's attorney general from 2012 to 2013 as a Christie appointee.
Chiesa, who previously was Christie's transition team executive director, rejoined regional law firm Chiesa Shahinian & Giantomasi PC in November 2013 following his short stint in the Senate.
"Senator Chiesa brings important insights and management experience from years of service in both the public and private sectors, which makes him an excellent candidate to oversee the responsible management of Atlantic City's finances," DCA Commissioner Charles A. Richman said in a statement. "I am confident that during the upcoming months and into the future, Senator Chiesa will expand on the efforts undertaken to date and continue to build on the existing groundwork to ensure Atlantic City achieves financial stability."
Chiesa takes over a city facing a structural deficit of more than $100 million that required state aid to balance its 2016 budget. The city has $240 million in bond debt and more than $500 million in total debt when factoring in casino tax refunds and other obligations it owes.
The DCA said the state's immediate steps for Atlantic City's recovery efforts include reaching agreements with casinos on payments in lieu of property taxes as well as ensuring that debt payments and obligations to the Atlantic City School District and Atlantic County are made on time. Chiesa also plans to explore "right-sizing" the city's workforce along with pursuing financings and other opportunities to reduce its debt. The city owes a $2.3 million bond payment on Dec. 1 and $4.8 million payment Dec. 15, according to Moody's Investors Service.
"The simple fact is Atlantic City cannot afford to function the way it has in the past," said Chiesa. "I look forward to meeting with Mayor Guardian and members of the City Council and starting the process of bringing this great City back to financial stability. It is my hope to work together with firm conviction and not disrupt the democratic process."
