The head of the state board that has taken over Yonkers' purse strings ordered the city Friday to write a plan for phasing out services in the event a judge's fines bring on insolvency.
"We need a detailed approach to how we're going to counter that financial collapse. . . . What is your (city officials') judgment on who gets laid off first?" said Secretary of State Gail Shaffer, who also is chairman of the state Emergency Financial Control Board.On Wednesday, the 2nd U.S. Circuit Court of Appeals temporarily extended a stay of heavy fines that a federal judge had imposed against the city and four councilmen for refusing to approve a housing desegregation plan.
The appeals panel did not say when it would rule on a city request to disallow the fines entirely. The fines double daily and could bankrupt the city.
Shaffer said at a news conference that as of Friday afternoon, local banks were told not to cash any city checks, including payroll checks, unless she had co-signed them.
City Manager Neil DeLuca called for a meeting of the full financial board. He complained that he was wasting time "answering Gail Shaffer's shenanigans" and charged that she was engaged in a campaign "designed to hoodwink the media and the public."
"I don't see it as a power struggle," responded Shaffer, who notified the city of her decision through the news media.
The board Shaffer heads was created in 1984 when the state bailed out Younkers from imminent bankruptcy. It agreed earlier this week to take over the city's finances in the wake of the dispute over the judge's fines.
If residents are worried about the threat of financial collapse, Shaffer said, "they should communicate it to the councilmen who are defying the law . . . bringing the city to its knees, fiscally."
In 1985, U.S. District Judge Leonard B. Sand ruled that Yonkers, the state's fourth-largest city, had intentionally segregated its housing and schools for four decades.
The city enacted a school desegregation plan, but on Aug. 1, four of seven City Council members refused to endorse a plan to build moderate-income housing in largely white neighborhoods and Sand found them and the city in contempt.
The city is asking the appeals court to throw out the fines, saying that Sand exceeded his authority and arguing that the city residents should not be made to suffer because of four intransigent council members.
DeLuca called "ridiculous" Shaffer's charge that the city was not prepared for the possibility of financial collapse.