NEWARK, N.J.—Newark Police Director Garry McCarthy won reappointment by the narrowest of margins last week. But the struggle to keep his job might pale when compared to the battles he faces at the start of his second term.

Murders are on the rise; the department faces civil-rights scrutiny; the superior officers union said it doesn't believe in him; and budget cuts are looming.

"The job has never been easy," Mr. McCarthy said. "...But I'm an eternal optimist. I'm really confident we're going to come out of this and be better than ever before."

It was only six months ago, back on April 1, that the Brick City celebrated its first full calendar month without a homicide since 1966. There had been only 10 murders over the first three months, tied for second lowest since 1941, and crime and shootings were down.

Then came a very difficult summer.

Between June 1 and Sept. 1, there were 35 homicides in Newark, the most since 1990. Eight more murders in September spiked the city's homicide rate up 25% over last year. Violent crimes—homicides, rapes, robberies and assaults—are up 6.4% for the year. Shootings are up 8%.

The American Civil Liberties Union of New Jersey filed a petition last month seeking an independent federal monitor to oversee the police department, alleging a variety of civil-rights violations. That petition prompted a probe by the Essex County Prosecutor's Office.

At the same time, facing an estimated $7 million budget gap in his department, Mr. McCarthy has had to work up a "doomsday" scenario of laying off 167 of his 1,300 officers coupled with an across-the-board demotion and pay cuts for all 108 captains, lieutenants and sergeants. The supervising officers' union responded, not surprisingly, with a no-confidence vote in Mr. McCarthy.

Through it all, Mr. McCarthy, a 51-year-old former NYPD deputy commissioner, remains unperturbed.

The homicide spike is "unacceptable" but can be explained, he said. He's confident that the department has the internal checks and balances to ward off the federal monitor petition. Layoffs and demotions can be avoided if the union is willing to make tough concessions. He said a police director isn't doing his job if he doesn't occasionally garner a no-confidence vote from one of the unions.

As far as his by-the-skin-of-his-teeth reappointment, he was given a second four-year term only after his chief detractor on the Municipal Council, President Donald Payne Jr., cast the deciding vote, Mr. McCarthy said, "I am pleased that I got my votes." But, he said, "I wasn't worried about it. I have this faith thing that whatever happens is meant to happen, and if I wasn't reappointed, it meant I was supposed to go somewhere else."

Councilman Ronald Rice, a past critic, voted in favor of Mr. McCarthy's reappointment because he said it's "unfair" to blame all of the department's woes on one person. "There's been a problem with the department for 40 years. The institution's got to change." But he's in favor of creating a local independent monitor, with subpoena power, which is answerable to the Municipal Council.

The ACLU of New Jersey wants a federal monitor to investigate and stop a "disturbing pattern of excessive force, false arrests, and other forms of misconduct."

Flavio Komuves, a senior counsel at the ACLU, said of particular concern is the department's internal affairs unit, which substantiated only one of 261 complaints it received about police misconduct in 2008 and 2009.

The ACLU also contends the alleged misconduct hurts the department's ability to solve crimes, especially murders. "There is evidence out there that suggests that places where police engage in a high level of misconduct it makes residents less willing to help in assisting in reporting crimes," Mr. Komuves said.

Anthony Ambrose, chief of detectives in the Essex County Prosecutor's Office, whose office co-investigates all Newark homicides is skeptical a monitor will help bring down crime, especially the type of murders that occurred over the summer.

"Mainly, all of the murders were drug-related, and I'd the majority of them were targeted," Mr. Ambrose said. "Usually when someone targets someone, they do what they have to do."

Thomas Fennelly, the deputy chief assistant prosecutor who heads the Homicide Squad in the prosecutor's office, said as much as 80% of the suspects and victims in this summer's killings had recently been released from prison. The motives for most of the 35 murders he said boiled down to "settling old scores" or ex-cons trying to "take back their drug turf."

The only way to stop these "narcotic assassinations" is to take out drug gangs through long-term narcotics operations, Mr. McCarthy said. But that takes time.

Reducing crime in Newark going forward won't get any easier if Mr. McCarthy has to drastically reduce his force. Mr. McCarthy said he believes he can find the savings to avoid any layoffs or demotions if the unions are willing to make a variety of contractual concessions. He said he recognizes those concessions will be tough to swallow for the unions but so too is the morale-killing layoffs and widespread demotions.

"The devastation caused by layoffs and demotions will take a really, really long time to come back from," he said. "Other agencies that have had to lay people off don't recover for 10 or 20 years. It really takes the air out of an agency."

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