To the Editor,
In the recent article entitled “Finance chair looks ahead to budget season,” Councilor Figy was quoted as saying the budget cuts made during last year’s 9-hour budget meeting were illegal. This is ABSOLUTELY NOT TRUE. Mr. Figy is the Chair of the Finance Committee, a past City Council President, and recently was the Acting Mayor. He should know better.
The State Law allows the City Council to reduce any spending request. Upon a majority vote, those reductions become “appropriations.” The role of council, and their power to reduce spending requests are contained in Mass General Law Chapter 43 Section 32. It states “The City Council may by majority vote make appropriations for the purposes recommended and may reduce or reject any amount recommended in the annual budget.” The Mayor may not veto such reductions or appropriations.
There are a couple of restrictions. First, the City Council cannot cut line items in the school department budget. They can only cut the total spending request. Second, the City Council cannot fix specific salaries of employees under the direction of boards elected by the people, other than the city council. This would apply to Gas & Electric and School Department employees. That’s it. Every other line item in the budget can be cut by the City Council. That’s the way the checks and balances system works in our Government. Approving spending is a primary power and responsibility of the City Council. All spending is subject to “annual appropriations”. The key word is appropriation. An appropriation is the amount approved by the City Council – not the request received from the Mayor.
There are of course consequences to some budget cuts. However, that does not mean the City Council is restricted from cutting spending requests – even if there are labor contracts involved. Labor and benefits make up the vast majority of the budget. Recent labor agreements increased the cost to the city taxpayers beyond what is affordable without cutting other necessary spending priorities. The City Council is under no obligation to approve annual spending beyond its means, or outside the parameters of their, and the public’s, priorities – whatever they may be from year to year. If a line item in the budget is cut, the city department must adjust and find ways to live within that appropriated budget. That’s just the way it is. If the City Councilors do not understand this law, maybe they shouldn’t be voting on such matters?
Besides the power to make cuts, there was also a question about whether or not we were allowed to follow our own City Charter and Rules when working on the annual budget. Our City Law Department gave an opinion that they did not apply. I disagreed and pursued the matter with the Mass Department of Revenue. The Mass DOR, who wrote the procedures and are the legal experts in budget and tax law (they provide interpretations, advice, and training across the state) said that certainly our Charter and Rules apply, as long as we ultimately satisfy the requirements of Chapter 44 Section 32. Many communities across the state follow their own unique procedures when working on the annual budget. Westfield is no different.
As discussed last year during the budget process in June, and shortly thereafter the budget process, I communicated directly with the Mass Department of Revenue’s Division of Local Services attorney several times. He provided me with documentation about these laws, and policy guides written by the DOR to explain the process to Cities and Towns across the state. I exchanged emails with him containing questions and answers. I provided copies of these documents and emails to the City Council and the City Law Department. When some councilors still questioned the laws and processes, I made a motion to get a legal ruling (not an opinion from our law department). The slim majority of councilors voted against getting such a ruling. Mr. Figy was one of the councilors who were opposed.
In this article, Mr. Figy suggests “the legality of any cuts recommended by councilors could also be checked.” I hope he intends to check them with someone who understands the law. The question is “legality” – not an opinion about spending or consequences. The Law Department’s role is to say “yes, it’s legal” or “no, it’s not legal”, and to back it up with laws or rulings. Threats of lawsuits because someone is upset with a cut, cannot be used as an excuse to provide a misleading “legal” opinion. As you know, people sue all the time, for all kinds of reasons. If someone sues because the City Council made a cut, that’s the way it goes. Again, State Law clearly says the City Council has the right to cut any spending request.
To be clear, because I know there are a few people who will have an opinion about this… there are a couple of expenses that the city is obligated to pay – even if the City Council cuts a budget request. These are debt payments and Pension Fund payments. If the City Council cuts those line items, the City Auditor still will have to pay them during the annual reconciliation process. These items would be paid, and Free Cash, Stabilization, or Taxes could be used to cover such expenses. Again, this does not mean the City Council is prohibited from making a cut to the spending request. You may recall that last year the City Council voted to cut the Pension Fund appropriation. At the time of the cut, I knew that it would still have to be paid, but I wanted to send a message to the Pension Board that we could not afford more increases in annual spending, nor miscalculations of the obligations and the payment stream necessary to fully fund the obligation. The Pension system has increased the compounded annual obligation of the city taxpayers and stretched out the timeframe necessary to fully fund the system several times over the recent years. The annual increases are currently 5.8% compounded on a roughly $10 million annual spend. That means we need $580,000+ in new money every year just to keep up with the pension obligation. And, to make it worse, the estimates for pension obligations and investment performance are not accurate. In order to fully fund this pension system, we need even more money. For those of you who own homes, imaging how you’d feel in the bank increased your interest rate, and stretched the number of years you were required to make payments in order fully pay off your home. You’d be a little upset. That’s the kind of thing that’s happening with the city’s Pension Plan (for the actuaries out there… yes , I know it’s not exactly the same, but it’s close enough for people to understand the issue).
I know this is going to be another tough budget year. As mentioned over the last several years, the City finances are not strong, and we have more obligations and desires than resources. I’ve been advocating for decisive action based on the simple mathematical projections for years. With COVID-19 declines in the economy, on top of large spending increases related to the recently approved labor contracts, it’s really not looking good. I’m guessing the Mayor will have to make serious cuts before he submits the spending requests to the City Council next month. There is no way to fund the obligations and expectations. We need over $5 million a year in road work. Forget about it. We need millions of repairs and improvements to schools and other buildings. Forget about it. We owe employees $230+ million in retiree healthcare. Forget about funding that. Dramatic changes will have to be made in the coming years.
In closing, I am sorry to say goodbye to so many wonderful people who lost a battle with COVID-19. The city lost many wonderful people, and I’d like to send condolences, thoughts, and prayers to their families. There are also several hundred people in Westfield fighting the virus right now. I hope they and their families return to a healthy condition shortly. I hope that the virus fades in the coming weeks, and that sometime in the near future we will start opening businesses and returning to normal life. I hope the kids can return to school and that the seniors can celebrate their success and accomplishments with their friends and families. Huge thanks to the first responders, the emergency management team, the 911 dispatchers, and all of the medical providers who have been battling this pandemic for weeks. Kudos to all of the retail, restaurant, and food store employees who are working so hard to get us through this. Kudos to the teachers and families for figuring out ways to keep the kids learning and growing. Kudos to the city IT department for scrambling to figure out how to connect everyone remotely so that the city could continue to function. Hopefully by the time I write my next article, we will be in a better place.
Dave Flaherty
Westfield City Councilor
[email protected]
