WESTFIELD – City Council leaders met late Wednesday afternoon with city legal and financial professionals to discuss the state Department of Revenue ruling which has stymied the council’s attempt to lower the tax rate this year by cutting the tax levy by $1.7 million.
That discussion also included other options to lower the tax increase for the current fiscal year, options allowed under state law.
Finance Committee Chairman Richard E. Onofrey Jr., said yesterday that he would not be surprised if a motion is made at the Dec. 19 City Council meeting in an attempt to accomplish the goal of reducing the tax rate increase.
“The council tried everything we could do, and some things we apparently cannot do, to reduce the tax rate increase,” Onofrey said. “I would not be surprised at all if somebody tried an end around at the next council meeting.”
Onofrey said that whatever action is taken at that meeting, it cannot delay sending out tax bills.
“IF we don’t get the tax bills out, we’d have to wait to April to send out a semi-annual bill,” Onofrey said. “In the meantime we’d have to borrow money to run the city, something that bond rating companies do not look favorably on.”
City Council President Brian Sullivan and Onofrey discussed the DOR opinion with City Solicitor Susan Phillips and financial department heads.
“The Law Department explained that the council does not have the authority to make mid-cycle cuts,” Sullivan said. “We did look at other avenues to accomplish what the council was trying to do to reduce the tax rate increase to residents and business owners.”
“We don’t have a mechanism to do what we wanted to do. Our one bite of the apple is in June when we approve the budget, not in December,” Sullivan said. “I do not like the process where we approve a budget based on revenue estimates and projections, but don’t have a mechanism to go back and make adjustments when we do get the real numbers halfway through the budget cycle.”
“That vote Thursday (Dec. 5) was a very risky thing for the council because of the ramification on the city’s financial status,” Sullivan said.
The vote would have forced Mayor Daniel M. Knapik to use most, if not all, of the free cash account when it is certified by the DOR to replenish the stabilization account and the budget, Sullivan said.
“There would have been no money for other services and projects,” Sullivan said. “That would have caused concern in the bond rating process. We do not want to go backwards.”
Onofrey said that “it’s very clear that when we set the budget, we set the number of how much the city will spend. We voted 7-6 to let the mayor have what he asked for.”
“Now, in December, our responsibility is to set the shift and to vote on the use of funds to offset the rate increase,” Onofrey said. “We don’t set the levy. The mayor sets the levy.”
“Our only recourse to have tax relief is to go back to the mayor and ask for more money, stabilization or free cash, to offset the levy,” Onofrey said. “The mayor doesn’t want to raid stabilization and has earmarked free cash, when it’s certified (by the DOR), for projects.
Free cash will be used to replenish the stabilization fund in the amount ($1,245,368) used to offset the levy last week.
“Typically the council votes in November or December to set the shift, but the tax rate is pretty much a done deal (based upon the budget approved in June),” Onofrey said.
