North Adams Council Mulls Dipping Into Reserve Funds
 Most of the councilors evinced a willingness to review the use of reserve funds one more time. |
The unexpected move at Tuesday's special public hearing on the tax classification was sparked by calls from the gallery, including from Councilor-elect John Barrett III, to dip into several other accounts to lower an expected tax hike of 6 percent.
"No new taxes, it's as simple as that," said resident Louis Chalifoux, one of nearly a dozen residents attending the hearing.
The council, on an 8-1 roll call vote, agreed to refer the matter of the cash transfer to the Finance Committee then to postpone the vote to Tuesday, Dec. 6. Mayor Richard Alcombright asked that the tax classification vote on whether to continue with a split-tax rate be delayed until the same night.
Alcombright said the residential tax rate of $14.82, up from $14 last year, would mean about $112 more on the bill for a single-family home. The commercial rate would be set at $32.82.
The anticipated rate hike doubled because of a decrease in evaluations on the commercial side of some $8.5 million. Nearly $6 million of that was because of changes in inventory taxing for Time Warner Cable and Walmart over which the city had no control; another $1.8 million was lost when North Adams Commons was changed to nonprofit status.
"This will set us up for another difficult budget year as we will begin our next budget year with a six-figure deficit of $430,000-$450,000," Alcombright said, because of the use of $166,000 free cash added to the extra $271,000 received in local aid the state may not offer next year.
The arguments on spending were similar to that between Alcombright and Barrett in the mayoral race two years ago: Alcombright objected to dipping into reserves and Barrett advocated spending or borrowing.
"There is no guarantee we may not need a good portion of this money to further out the year," Alcombright said, pointing to an expected half-million in costs because of Hurricane Irene, increased spending on veterans benefits and other maintenance and overtime issues that may arise. "Anything more that we throw from reserves against our taxes is only going to add to our structural deficit next year."
Barrett, who was mayor for 26 years, said the city should use reserves or take advantage of low-interest borrowing. "I always believed you should use reserves and available funds so that you didn't tax to the max."
He pointed to some $300,000 in the stabilization account, nearly $700,000 in the free cash account and other funds including the parking account, landfill account, cemetery account, ect., that could be tapped. "I believe that taking $200,000 you will save on average anywhere from $60 to $70 bucks [for taxpayers]," he said. "The funds I recommend be used will replenish themselves over the course of this fiscal year."
Alcombright said the state Department of Revenue had been advising him to set aside "a good healthy reserve."
"We don't know what this year is going to look like ... last year was horrible," he said. "There are a lot of wild cards out there and the state has urged me over the last two cycles to find ways to build reserves and no longer deficit spend: it's that simple ... we shouldn't be deficit spending."
Robert Cardimino, who led the opposition against the Proposition 2 1/2 vote last summer, said the city wasn't making itself competitive by raising taxes.
"You're not taking into consideration the people who are on the edge, who are on thin ice the elderly," said Cardimino, who got into a shouting match with City Council President Ronald Boucher. Boucher recessed the meeting for 5 minutes and met with an angry Cardimino in the hallway outside the chambers.
When the meeting resumed, Barrett said he wanted to find common ground with the councilors and help a divided community "start healing." Councilor David Bond said he was willing to step back and look at the accounts and Councilor Alan Marden motioned to amend the free cash transfer.
Councilor Keith Bona voted in the negative on the amendment because, he later said, he believed the numbers and believed the mayor.
Business Manager Nancy Ziter cautioned that too long a delay in setting the tax rate could affect the ability to get tax bills out on time.
Documents Related to North Adams Tax Rate FY 2012
Tags: budget, property taxes,
