Atlantic City Encourages Retirements in Bid to Avert a Takeover

(Bloomberg) -- Atlantic City is offering early-retirement packages to more than a tenth of its workforce as part of the troubled resort town’s plan to avoid state takeover.

Mayor Don Guardian described the proposal in a letter sent to city workers on Thursday. There are 162 eligible police, firefighters and other employees. Atlantic City has about 1,300 full- and part-time employees, according to budget documents.

"As we continue to craft our recovery plan for Atlantic City, a key component of the solution to solve our long-term legacy costs problem is to offer an early retirement incentive package," Guardian said in a statement released Friday.

Atlantic City’s finances have been under siege since a third of its casinos closed in 2014 because of the proliferation of legalized gambling on the East Coast. Another, the Taj Mahal, is scheduled to close after this weekend.

The 39,000-resident city must submit a five-year budget plan in early November or risk being taken over by New Jersey. If the state rejects the plan, it could sell municipal assets or change labor contracts, powers it was granted when the legislature authorized extending the distressed city a $73 million loan.

Atlantic City this week violated the conditions of that loan by failing to dissolve the local water authority. Though the state didn’t demand repayment of the $62 million already advanced because of the breach, it plans to withhold aid and won’t disburse the rest of the loan.

To contact the reporter on this story: Katherine Greifeld in New York at kgreifeld@bloomberg.net. To contact the editors responsible for this story: Dave Liedtka at dliedtka@bloomberg.net, William Selway