Democrats on the city council have said they want to minimize the amount of money taken from the city’s rainy day fund to help balance the 2013-14 budget. Mayor Pedro Segarra’s budget proposal calls for the withdrawal of $13.5 million from the fund, which currently has about $26 million.
One council member, Democrat Kenneth Kennedy, said today that after further discussions, some of his colleagues have decided they don’t want to draw any money from the fund. When the council meets to amend the mayor’s budget Monday, they’ll likely propose $13.5 million in additional cuts to city departments, so the rainy day fund isn’t depleted at all.
Segarra’s budget already calls for $47.7 million in cuts, which would reduce 15 of the city’s 20 departmental budgets.
“I’m afraid if we take half the money out of the rainy day fund it will have a negative consequence on our bond rating, and it will cost more for us to borrow,” Kennedy said Thursday. “It’s fiscally irresponsible to take that much money out of the rainy day fund.
“You have to think about this short- and long-term. A lot of these decisions are short-term decisions. We don’t have any long-term revenue solutions.”
He wasn’t specific about which departments would face further reductions, though he did say police and fire would likely be cut by the council. Segarra has proposed increasing the police department budget by $3.4 million next year, saying public safety has remained a priority. But Kennedy said that increase would probably be reduced.
More vacant city positions also would probably be eliminated, he said, though he didn’t say how many. Segarra’s budget calls for the freezing of more than 100 vacant positions.
In the coming months, Kennedy said, he will propose that the council not approve the mayor’s memorandum of understanding with the city treasurer. The issue likely will come up later in May or in June, he said.
Segarra has said he would draft a memorandum of understanding with the treasurer that allows the city to pay about $13 million in pension contributions during the course of the next fiscal year. The rest of the contributions — about $24.3 million — are built into Segarra’s budget proposal. The agreement allows the mayor to balance the budget without a tax rate increase.
“The memorandum of understanding is irresponsible because we’ll have to take money out of the rainy day fund to pay it,” Kennedy said. “If we do it the mayor’s way we won’t have a rainy day fund left at the end of the [2013-14] year.”