Once Whelan declared “We’re out of Smoke and Mirrors” but he must have found some new ones.  After making this statement and pushing through an “Unavoidable” tax hike Whelan closed budget holes in typical New Jersey Democrat fashion, by selling off city property, depleting city reserves and putting off debt payments.  Whelan even repeatedly turned over city owned properties in exchange for not having to pay the city’s overdue water bills.  When the State Department of Community affairs refused to let him borrow $12.6 million, he proposed creating a special insurance fund so he could float a loan for five years.  No wonder the new mayor declared that “Jim Whelan left A.C finances in a mess…”

Pure Fiscal Mismanagement:

• Moody’s Blasted Whelan’s Use Of One-Shot Revenues And Debt Service Restructuring To Plug Budget Holes. The Reduced rating is reflected of the prior administrations’ “political decisions to utilize reserves, one-shot revenues, and debt service restructuring in order to fund growing municipal expenditures.” (Moody’s Investors Services, Outlook of Atlantic City, July 22, 2003)

• Whelan Sold City Property To Pay The City’s Water Bill. “Every time a toilet flushes at City Hall, the city MUA gets a little closer to acquiring another piece of the resort. Hard to believe. It's simple, really. Flush the toilet or turn the water on in a public building, and it goes on the city's water bill from the MUA. The city in turn totally ignores that water bill until it adds up to some number like, say, $200,000, the city's current bill. Then the MUA tries to collect by offering the city a compromise. They'll take a piece of city-owned land they need for a capital project in exchange for forgiving the bill.” (Michael Pritchard, “Atlantic City Pays Water Bills With Land,” The Press of Atlantic City, February 3, 1995)

• Whelan Sold Land Before To Pay The Water Bill In 2001. “The last time, about four years ago, the MUA acquired the land where its offices sit at Wabash Avenue.” (Michael Pritchard, “Atlantic City Pays Water Bills With Land,” The Press of Atlantic City, February 3, 1995)

• “Mayor James Whelan's Cash-Strapped Administration Needs To Borrow $12.3 Million To Cover Legal Bills This Year - A Move So Rare It Requires Special State Approval.” (Thomas Peele, “A.C. Hopes To Borrow $12.3m. To Pay Legal Bills,” The Press of Atlantic City, January 7, 2000)

• Department Of Community Affairs Killed His First Proposal To Borrow Money To Pay The City’s Legal Bills. “Mayor James Whelan's proposal to borrow $12.3 million for city legal bills is dead[.]” (Thomas Peele, “A.C. Has New Plan To Borrow $12.3m. For Legal Bills,” The Press of Atlantic City, April 5, 2000)

• “[City Business Administrator Andrew A.]Mair Said The First Idea Failed Because The Administration Based It On A State Law That Allowed Borrowing To Pay Tax-Appeal Judgments.” (Thomas Peele, “A.C. Has New Plan To Borrow $12.3m. For Legal Bills,” The Press of Atlantic City, April 5, 2000)

•  “The city used that law to borrow money to pay a tax-appeal judgment in the mid-1990s. This time, they learned it wouldn't work for projected legal bills, Mair said.” (Thomas Peele, “A.C. Has New Plan To Borrow $12.3m. For Legal Bills,” The Press of Atlantic City, April 5, 2000)

• “City Council Members Didn't Know The State Rejected The Administration's First Borrowing Attempt[.]” (Thomas Peele, “A.C. Has New Plan To Borrow $12.3m. For Legal Bills,” The Press of Atlantic City, April 5, 2000)

• After DCA Prohibited Whelan From Borrowing The Money He Proposed Creating A Special Insurance Fund To Borrow On Behalf Of The City. “The administration's latest proposal to pay for a cluster of legal judgments is to create their own insurance fund and borrow enough money to float if for five years.” (Thomas Peele, “A.C. Has New Plan To Borrow $12.3m. For Legal Bills, The Press of Atlantic City, April 5, 2000)

• The Second Proposal Required Borrowing Even More Money. “[A]nd his staff is now creating a local insurance fund for those debts and others that will require even more borrowing.” (Thomas Peele, “A.C. Has New Plan To Borrow $12.3m. For Legal Bills,” The Press of Atlantic City, April 5, 2000)

• “That Is More Than Half The Maximum Amount The City Can Borrow Under State Law, According To The State Department Of Community Affairs, Or DCA. “ (Thomas Peele, “A.C. Has New Plan To Borrow $12.3m. For Legal Bills, The Press of Atlantic City, April 5, 2000)

•  Only One Other City In New Jersey Had Ever Tried To Borrow Money. “The last time the Local Finance Board entertained such a request was in 1998, when Kenilworth, Union County, borrowed less than $1.2 million to help fund a $3 million lawsuit, community affairs spokesman E.J. Miranda said. That request was approved. Miranda said no one in the department he spoke with Thursday could recall a case other than the Kenilworth matter.” (Thomas Peele, “A.C. Hopes To Borrow $12.3m. To Pay Legal Bills,” The Press of Atlantic City, January 7, 2000)

• In The 1994 Budget, Whelan Used $6 Million From The Sale Of The Atlantic City International Airport To Cover The Shortfall Rather Than Capital Improvements. “One was filling the void of using $6 million in funds leftover from the sale of the Atlantic City International Airport in a one-shot revenue item last year.” (Michael Pritchard, “City's Lean '95 Budget Not Solely Result Of Casino Tax Appeals,” The Press of Atlantic City, January 21, 1995)