The Council Adopts a Budget . . . or Maybe Not

The Common Council held a special meeting tonight to vote on the proposed 2015 budget. The meeting was scheduled to begin at 5:45, and it obviously was anticipated to last only 15 minutes, since the Police Committee meeting was scheduled for 6:00. But the Police Committee meeting was cancelled, and the special meeting went on until well after 7:00.

It will be recalled that the bone of contention with the budget was $70,000 to be raised from property taxes as a contribution to a capital reserve fund. Remarkable as it may seem, this $70,000 represented, in a budget of close to $5 million, the difference between a 1.5 percent increase in property taxes and a 2.97 percent increase. The difference for the owner of a house assessed at $250,000 would amount to $45.

At the outset of the meeting, Council president Don Moore introduced a resolution obviously meant to ease the impact of the $70,000. It amended the budget by removing $27,500 from the budget for the city attorney. No sooner had the resolution been introduced than the Council went into executive session, giving as the reason the need to discuss a "personnel matter."

The executive session lasted for close to an hour, and when the public was admitted back into the Council chamber, it seemed the amendment had been set aside. Instead the issue of the $70,000 was the topic of discussion. Alderman Nick Haddad (First Ward) made the case for establishing a capital reserve fund, warning that there are "$2.5 million to $2.8 million in expenses coming for, which the city is not prepared." He cited the need to replace the tower truck--the AerialCat purchased for the Hudson Fire Department in 2001--and need to repair the now closed Ferry Street bridge.

Alderman Ohrine Stewart (Fourth Ward) said she could not see raising taxes "because we have a healthy fund balance." Alderman Abdus Miah (Second Ward) suggested that the sale of the vacant lot at Fourth and State streets and the revenue from parking meters should be adequate to underwrite a capital reserve fund.

Stewart's reference to the fund balance, which is reported to be more than $2 million, prompted city treasurer Heather Campbell to explain that a fund balance "is not a pool of money just sitting there." She equated a fund balance to shareholders' equity. "If you sold everything you had and paid all that you owed, what would be left over is the fund balance."

After some discussion about procedure, Alderman Bob "Doc" Donahue (Fifth Ward) proposed his own resolution, which amended the proposed budget by removing the $70,000 that represented the contribution to the capital reserve fund raised by taxes. The resolution was supported by all the aldermen except Nick Haddad, John Friedman (Third Ward), Henry Haddad (Third Ward), and Council president Moore. 

Friedman admonished his colleagues, "We cannot continue to do this. We are acting as if the fund balance can be used as a checkbook." He spoke of the city's crumbling streets, the deteriorated Ferry Street bridge, and poor access to the waterfront.

Alderman David Marston (First Ward) bemoaned the need to raise the capital reserve fund from property taxes. "Taxes do nothing but go up," he protested. "We can't afford to keep raising taxes. We cannot look to fund this where people can afford it least."

When the amendment came to a vote, it passed with 1,383 ayes and 645 nays. Bart Delaney (Fifth Ward), Donahue, Tiffany Garriga (Second Ward), Alexis Keith (Fourth Ward), Marston, Miah, and Stewart voted in favor of the amendment; Moore, Friedman, Henry Haddad, and Nick Haddad voted against it. After the meeting, members of the public pondered if the Council had actually adopted the budget, since they had voted on the amendment proposed by Donahue, but they had never actually voted to adopt the budget.
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