The prospect of Hudson facing bankruptcy inspired some clever Instagram posts, my favorite being this from The Hudson Wail.
At last night's Finance Committee meeting, however, city treasurer Heather Campbell told the committee and the residents gathered at City Hall that warnings about the City's imminent insolvency were greatly exaggerated. Reimbursements of at least $711,000 are expected soon, but close to $1 million in revenue is going to be delayed.
The City is engaged in several major projects--DRI (Downtown Revitalization Initiative) projects, rebuilding the Ferry Street Bridge, and ongoing sewer separation project--that are being financed with grants, but they require that the money be spent and the work done before the City is reimbursed. As a consequence, the City has had to borrow money to finance the projects and then wait for the reimbursement to pay the money back. Campbell noted that the debt service required for the DRI projects is about $1.1 million but suggested that investing $1.1 million to get $10 million was a pretty good deal.
Campbell indicated that almost 100 percent of the cost of the Ferry Street Bridge will be reimbursed. Councilmember Margaret Morris (First Ward) asked how much of the funding for the bridge is federal money, concerned that under the current administration the money could be withdrawn. The question remains unanswered.
Regarding the $2.5 million owed to the City in delinquent property taxes, Campbell reported that an attorney has yet to be assigned to carry out the foreclosures on the properties involved, explaining, "It is difficult to get an attorney because of some things that have happened." She did not explain what those "some things" were. A list of the delinquent properties is expected to be released today.
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Update: The video recording of the Finance Committee meeting is now on YouTube and can be viewed here.
I think Heather is doing a good job, and part of that job is to give a neutral and sober presentation of the facts as they come in, the city’s finances are a complex moving target. But in the details of her data she gives a lot of hints to read between the lines. I don’t think the concerns about the budget are exaggerated and now is the time for the council and the public to take closer notice, because once the danger becomes obvious, it will be too late. The council pushes too much on Heather to make the diagnosis for them: is everything ok, or should we panic? That’s not her job.
ReplyDeleteI implore concerned taxpayers and anyone with a stake in the future of the city to watch the meeting on YouTube, the budget talk is only the first half. You don’t have to watch the Big Towel discussions or the event funding requests at the second half. Decide for yourselves.
These are the facts: We’ve increased taxes for the past two years to cover the budget. Even that wasn’t enough and we’ve had to draw from the reserve to make ends meet. As John Friedman has pointed out, much of that reserve comes from selling city assets, like the handful of properties on Warren St that were sold off not so long ago. We don’t have much left to sell off.
So as the reserve has been getting smaller, the budget has been getting bigger, and no matter how much we’ve raised in taxes and fees, it’s coming up short at the end. Something’s got to give.
Lodging and sales taxes are falling short, dependent on the hopium of hotels that are far from opening, and STRs that have been regulated out of existence. Besides the changes to the Amtrak lot, we’ve yet to install the new kiosks on lower Warren or decide whether or when to increase the pitifully low meter rates for the rest of the city. The head of DPW put in a change order request of over $170,000 to fished the DRI work that is so behind material costs have increased. Speaking of grant work, no single person is managing grants. It’s hard to figure out what reimbursements have been requested. All the while we front the money via bonds. So while we boast about the grants we win, we forget to budget for the debt service of the bonds. And when the projects go on too long or whoever is responsible for that forgets to put in for reimbursement, those bonds must be refinanced. Has anyone heard the news about the bond markets lately? You know, the only thing that made Trump pause tariffs, because people were getting “yippie?” Yeah, that bond market.
Also, the police budget seems to be a nebulous thing. They keep buying new vehicles, hiring and giving promotions that the council seems unclear if these costs have been projected.
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ReplyDeleteFurthermore there are a lot of unknowns that we haven’t accounted for but could make things worse. We’re expecting good revenue from a cannabis sales taxes that we’ve yet to see data on. Those stores don’t look busy to me, and cannabis is a low margin product with a sin tax, and increasing supply and competition will decrease that margin. The new dispensary on Fairview (which will pay its local tax to Greenport) is ready to come in and undercut the fancy stores on Warren. And because of our inconsistent and discriminatory assessment roll, we have several ongoing Article 7 lawsuits against the city that we have to pay outside lawyers to defend, as well as it seems to pay thousands out to appraisers (see the resolution for tonight’s council meeting to authorize the mayor’s office to use more un-budgeted funds to hire an appraiser to defend an assessment for a house on Union St.). And while the city fights people in court tooth and nail to defend a chaotic assessment roll, they sit on their hands and can’t figure out how to hire a lawyer to go after the $2M+ in back taxes that should have been paid. We also have a massive amount of money due in unpaid parking tickets that the city also hasn’t figured out what to do with. Remember that parking ticket amnesty program that the mayor cooked up last year? The one that was supposed to bring in all that money and like 3 people took advantage, out of the tens (possibly hundreds) of thousands owed? Time to pass on that info to the state DMV and start suspending licenses.
Speaking of lawsuits, the dysfunctional Planning Board is sure to bring more litigation against the city for more expensive Article 78 actions. Probably one more from the Colarusso dock situation, probably one for Mill St, and maybe more from the other private projects that have been delayed for years.
How about the sewers? Everyone’s favorite subject. At last night’s meeting there was discussion about the massive combined sewer separation project. We have massive grants to fund them, but again, the front end costs and bond servicing will require massive increases to the sewer fund—separate from the general fund and budget, but everyone agreed that the sewer fee is going up big time, after its already increased 36% in the past two years. Speaking of fees, now we have a sidewalk fee to throw in the mix.
There are a lot of knows and unknowns that have yet to be accounted for. Our piggy bank is running out and taxes have a lot of us at the breaking point.
But, maybe it’s not so bad. Happy to be proven wrong on any of these points.
I think this is an exceptionally well written and clear summary of what has been going wrong and on in the city for a while.
DeleteOn the topic of the city's treasurer, what we've heard from her this and the last week makes me wonder if some of that praise that she seems to be getting from everyone is maybe not entirely justified. At the last week's Informal Council meeting, she somehow managed to hoodwink me into believing that Hudson was going to be bankrupt in 2026 (I've downgraded that likelihood from absolute certainty to only a possibility). It happened because she mentioned charge-backs from this year to 2024 as if those were merely an accounting quirk. In my mind, I had subtracted those already from whatever the revenues at the end of the 2025 budget year would be. She failed to mention that these charge-backs were due to delayed grant reimbursements.
She talked about this in greater detail yesterday: The city was awarded grants, it's putting in the infrastructure work but when the grant pays out is anyone's guess and so a budget may temporarily dip into the negatives.
Why would she not volunteer this critical information straight away? It's information absolutely vital to understanding the fiscal situation that Hudson is in.
I have no doubts that she is a competent treasurer but she sucks at explaining things to her audience in ways such that it wouldn't draw the wrong conclusions.
Personally, I think she’s riding a fine line between being an elected official while also having a massive amount of administrative duties. She’s 1/3 of the BEA, so she has to have a working relationship with the executive branch (mayor, dept heads), while providing guidance to the legislative branch. This makes it tricky, both politically and professionally, to communicate danger while not sounding overly alarmist. It also makes it awkward for her to say who’s screwing up and not doing their job. She gives lots of hints and this requires the council to be proactive, and about half of them are.
DeleteThe point I’m making in my posts above, is that our current trajectory is not sustainable. The time to change course is now as later it will be too late. But without a qualified chief executive, a fully engaged council, and a grant system that’s not being actively managed, there is a diffusion of responsibility, and that’s what will lead to our undoing.
So... if Kamal or Tom ran their own businesses, say 🧢 Kamal's Snapback Hats and 🎙️ Tom Podcast Vibes, respectively... they would certainly have taken action to recover money/ revenue (especially if it is $2m) owed to their businesses.
ReplyDeleteWhy did they not take immediate action here when it is their job to do so?
Why did Heather raise this issue years ago.... and Kamal did nothing?
Sure... Covid laws limited possible actions but that was 2 years ago? And some of these debts likely predate 2020.
Now today we are promised a list... but only after months of Rich and others raising this issue again and again.
This delinquent property tax episode demonstrates a few Hudson issues:
- This mayor does not act in the interest of the city as a whole (fiduciary duty)
- How many other similar delayed actions are out there, unknown to residents?
Does Hudson owe someone money (like the Galvan bills missing in someone's personal inbox?) or is Hudson owed money by some entity or other group of residents?
We might never know... Kamal ignores FOILs and this is the City Clerk's last week.
Hard to find a lawyer? 1/2 the adds on TV are for lawyers! Find a more plausibe excuse.
ReplyDeleteDid they publish the list of delinquent properties?
ReplyDeleteNot that I'm aware of.
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