While watching the most recent Northampton City Council meeting on the local cable access channel the evening of March 15 I was interested in the lack of information provided regarding a $429 thousand financial transfer. Apparently there is a surplus of funds in the city’s “abatement assessment overlay surplus reserve account” and Mayor Higgins and Finance Director Chris Pile moved to transfer these funds to the city’s capital and general stabilization accounts in order to help stem expected shortfalls in the Fiscal Year 2008 $64 million municipal budget, and to help defray future costs of a new $12 million Police Station. A $6 million Public Works facility is also to be constructed in the next half decade as well, though neither project is presumed by Higgins to require city voters to authorize either a debt exclusion or Proposition 2 override.
I prefer (for what it’s worth) that the public be given an opportunity to vote on these two capital projects and how much money should be spent on them, but like the long overdue $4 million Senior Center, some decisions are being made for us by the experts that run our government. It’s important to note that whether voters approve overrides or not, these are still public dollars being borrowed and allocated on our behalf. In the end a more emotionally charged issue regarding our children and that of local school funding will perhaps be held out as the reason for a tax override but that is speculation on my part and I’ve digressed.
The members of the City Council’s Finance Committee voted for the transfer, and then the members of the full City Council voted in favor as well, both committees casting unanimous votes with little discussion. While this transfer is likely appropriate and even a routine government function, city officials offered little explanation during the meeting regarding the nature of these funds, other than to indicate they are permitted by law to access them in the fashion they did.
According to an article in the March 17 Springfield Republican Hamp gets A1 bond rating, Moody’s Investors Service “lauded the city’s practice of building its stabilization fund, which it has used to balance the budget when necessary.” Absent from the article however, is mention of the two areas Higgins said Moody’s was concerned with and contributed to the city not receiving a higher rating still, those being that Northampton’s property values are not high enough (whether that means city property assessments or actual sale prices was unclear), and our income levels for a high rent community are low.
For some background Bondtalk.com defines A-bonds as such: “Bonds that are rated A possess many favorable investment attributes and are to be considered as upper medium grade obligations. Factors giving security to principal and interest are considered adequate, but elements may be present that suggest a susceptibility to impairment some time in the future.There are nine basic rating categories for long-term obligations. They range from Aaa (highest quality) to C (lowest quality). Moody’s applies numerical modifiers 1, 2, and 3 in each generic rating classification from Aa to Caa. The Modifier 1 indicates that the issue ranks in the higher end of its generic rating category; the modifier 2 indicates a mid-range ranking; and the modifier3 indicates that the issue ranks in the lower end of its generic category.”
Moreover, before we start celebrating in the streets regarding Northampton’s fiscal status, the Boston Globe recently reported in an article published March 13 that assets of 35 pension systems are targeted by Governor Patrick for state takeover due to underperformance and Northampton is among them. This basically means our appointed Retirement Board would lose local fiscal control of city employee pension fund investments.
As well the Gazette reported March 10 in School system bracing for budget cuts that Northampton might have to eliminate personnel in the schools in order to arrive at a balanced budget for FY 2008. The issue will be discussed at the next School Committee meeting March 22 at 7:15 PM in the JFK Middle School on Bridge Road in Florence. Superintendent Isabelina Rodriguez Babcock estimates the schools need an additional $1.353 million for the upcoming year. (I’d post the link to the Gazette article but one must pay for an online subscription to access the news reported there.)
Thus the public is receiving mixed messages with regards to Northampton’s fiscal health.
My questions as an interested observer and taxpayer: how can city councilors vote for something like this unless they understand fully what they’re voting for? And if they understand fully what they are voting for, when and how did they come about this understanding? Did they each speak to the mayor or finance director individually? Did they speak to each other while determining their votes? What exactly was the process used for the council to decide unanimously to transfer almost a half million dollars of public money with no public discussion to speak of? I bring this up because I expect when I’m viewing a meeting of this nature that officials are going to realize laypeople are watching and attempt to explain the who-s, what-s, when-s, where-s, why-s and how-s of transactions like this. For example, if I were a councilor I would have felt compelled to ask the following questions before I voted, on behalf of the public, whether I already knew the answers or not: How much money is in the abatement assessment overlay surplus reserve account? Is there only one account like this? At what account balance does it become permissible to transfer funds? How long has it been that this account balance has surpassed this threshold? How much interest is generated by this account? What is the original source of the funds in the account? What other options exist for these funds other than transfers to the stabilization accounts? For instance, could they be transferred to aid our schools directly? What has been the median and average amounts expended for abatements over the past year, the past five years, etc.? How much has been abated in comparison to abatement requests? What is the ratio? I’m sure there are other questions that could have been raised.
The public will become more informed and engaged if those currently in power make informing the public a priority and take the time to educate us in these matters. This lack of discourse televised at the Council level only contributes to a perception that officials do not trust the public to comprehend complex municipal issues and that we citizens should simply delegate to and trust that public officials know what they’re doing and are acting in our collective best interests. In addition, enhanced discourse would reveal which officials truly understand what they are voting for or against and whether they understand the true consequences of their votes cast. In the absence of achieving a reasonable understanding on issues brought before them, officials should abstain from voting. So, whether I agree with local policies adopted or not, I feel that some officials know exactly what they’re doing in general, but should be making every effort to ensure that as many members of the public understand what they’re doing as well, and why.
