Campbell fails to vote on plan to offset $96K loss in funding

By jeanne starmack

starmack@vindy.com

campbell

A plan the city’s finance director has to offset a $96,000 loss in state funds next year couldn’t get before the city council for a vote.

The plan, in which the city would have used part of its $817,000 cash reserve to pay off $136,000 in debt, could not be introduced as legislation because it did not have enough sponsors.

Legislation needs three sponsors to make it to the council floor. It had council President Juanita Rich and councilman Michael Tsikouris but lost councilman Lew Jackson after he objected to the legislation’s being passed as an emergency.

As an emergency, the legislation would not have had a 30-day waiting period after three readings before it became law.

Rich and city Finance Director Sherman Miles said the emergency clause was a way to put the legislation in place by the end of September so the city could save $30,000 this year.

Jackson said the emergency clause should be used only in the event of a health or safety issue.

The city pays $10,125 a month toward the debt, which is what’s left of $760,000 the city borrowed after it went into fiscal emergency in 2004, Miles said after the meeting.

Money from the cash reserve can be used only for a one-time expense, he explained. It cannot be used directly for general fund expenses such as wages and benefits, but once it’s used to pay off the debt, it frees up money for those other general-fund expenses, he said.

“If you free that money up, you might not have to lay somebody off,” Rich said.

Miles said he checked with Paul Marshall, chairman of a state commission that oversees the city’s finances while it is in fiscal emergency.

Miles said that a generally accepted range for a city’s cash reserve is between 5 percent and 15 percent of yearly general fund appropriations, and right now, Campbell’s is at 33 percent.

Councilman Bryan Tedesco said he isn’t supporting the plan because he believes the city should make cuts instead. He said though that he does not want to see layoffs. He called using the cash reserve “robbing Peter to pay Paul.”

Mayor Bill VanSuch, who was not at the meeting but was reached afterward, said he was not in favor of the plan because he would rather see the $10,125 a month go back into the cash reserve rather than the general fund.