The city council voted down budget amendments that called for a 6.1-percent property tax increase on early Wednesday morning.
Council members in a 4-3 vote voted down the amendments to the introduced budget proposed by mayor Jose “Joey” Torres’ administration which would have increased the municipal tax levy to $157.3 million from $148.2 million last year, according to officials.
Business administrator Nellie Pou said the increases in the levy resulted higher insurance, pension, and debt service expenses. She also alluded to additional money set aside for public safety contracts.
“Those numbers for me are very problematic,” said Alex Mendez, councilman at-large. He questioned the city’s budget practices. He cited several departments that had budgets that exceeded the previous year’s total expended amount by hundreds of thousands of dollars.
Mendez cited an increase in the law department of $241,000 from the entire amount the department expended the previous year. “What are we looking to do with that additional money? Are we looking to hire more people?” he asked.
“We had part-time people in the department of law. We’re now hiring full-time people,” responded Russell Forenza, the city’s budget officer. He the department has eight part-time employees, but is now looking to bring on four full-time people.
Mendez cited other instances where the city budgeted far more money to a department than the total expended the previous year. He said the city should avoid bringing on new employees to vacant positions due to the city’s dire financial straits.
“This is an unsustainable situation,” said Andre Sayegh, 6th Ward councilman. He said the city is moving in the wrong direction. The city’s overall budget for this fiscal year is $275.8 million up from last year’s $252.6 million. The larger overall budget includes more than $7 million in grant funds that had to be accounted for in the budget, according to officials.
“I’ve seen this picture before,” said Julio Tavarez, 5th Ward councilman. He has warned council members spending through a series of temporary budgets will force a tax increase on homeowners late into the budget year leaving the council powerless to cut spending when most of the budget has been already spent.
“We’ve burned eight months. Now it’s too late,” said Tavarez.
The city’s fiscal year started in July. Four months remain in this budget year. The Torres administration waited on state financial aid before presenting a finalized budget. The city received $25 million in transitional aid this year.
Mohammed Akhtaruzzaman, 2nd Ward councilman, said the city should reduce the tax levy by reducing another $2 million from the budget.
“The state has asked us to raise it to the highest level,” said Pou of the municipal levy. “If we didn’t do that they would reduce transitional aid.”
The city risks a transitional aid cut if it trims the budget, said municipal officials.
“We’re pushed against the wall,” said Ruby Cotton, 4th Ward councilwoman. The more we cut, the more the state is going to cut from transitional aid, she said.
Mendez, Akhtaruzzaman, Sayegh, and Tavarez voted against the amendments. Cotton, Michael Jackson, 1st Ward councilman; William McKoy, 3rd Ward councilman voted in favor of the amendments.
The post-midnight vote came after dozens of homeowners protested against tax increases.
“We’re running the risk of jeopardizing the well-being of our entire community,” said Jackson. He cited the negative outlook issued on the city by Moody’s Investors Service citing the city’s weak finances and ballooning debt.
The credit rating agency cited the uncertainty over budget passage. The council has twice refused to support Torres’ temporary budget appropriations this fiscal year citing lack of seriousness on the mayor’s part to rein in spending.
Torres may have to seek yet another temporary budget in March, according to officials.