Holyoke City Council Special Meeting December 18, 2020

SPECIAL MEETING OF THE CITY COUNCIL

December 18, 2020

The meeting was called to order by President McGee at 6:19PM.

President McGee stated that City Clerk McGee was not able to attend, adding that he would fill the role of Clerk for this meeting.

President McGee called the roll.   Absent members: 0 Present Members: 13 (Anderson-Burgos, Bartley, Greaney, Hernandez, Leahy, Lebron-Martinez, Lisi, McGee, McGiverin, Murphy, Sullivan, Tallman, Vacon).

The name of Councilor Anderson-Burgos was drawn to head the roll call voting.

President McGee stated noted that information from the state had changed that day.

Councilor McGiverin stated that the order was slightly different from an order in the Finance Committee due to a change since the last full Council meeting. Observed that changes in the state’s recapitulation sheet made a difference in terms of a reduction in the school budget as well as no longer having a need to transfer from stabilization funds. Noted that DLDS is not requiring a correction of the sewer deficit. Stated a need to address clerical changes. Suggested taking substitute order given, and vote to reduce the budget. Expressed that the only other necessary step would be to decide to adjust the tax rate. Emphasized the school budget must be voted on before the end of the year.

President McGee noted that a Finance meeting had been held prior to the current meeting in order to discuss late filed financial transfers from that week’s regular full Council meeting. Stated that adjustment had been placed on the agenda, and that new information since the posting reducing the transfers that had been planned for a vote.

Councilor McGiverin clarified that the total reduction is roughly $3.9 million.

President McGee confirmed that to be correct.

Councilor McGiverin made a motion to suspend the rules to take up Late File A as a replacement to item 1. Councilor Anderson-Burgos seconded the motion. All Councilors voted in favor.

MCGIVERIN — Ordered, that there be and is hereby raised and appropriated in the fiscal year 2021, THREE MILLION NINE HUNDRED SEVENTY THREE THOUSAND SEVEN HUNDRED AND 00/100 Dollars ($3,973,700.00) as follows:

FROM:

13001-51101 PERSONAL SERVICES $1,973,700.00

13002-57000 OTHER EXPENSES 2,000,000.00

TOTAL: $3,973,700.00

UNDER DISCUSSION:

Councilor McGiverin stated that much information was provided by the Receiver, Dr. Alberto Matos, as well as Chief Finance and Operations Officer, Anthony Soto during the Finance Committee meeting. Noted having learned a great deal about school department funding.

Councilor Bartley stated observed that a great deal changed in the expected funding in a matter of five days. Recalled having received four budgets in a previous year. Noted the current tax rates are $19.08 for residential and $39.73 for commercial, adding that keeping the current residential would require the commercial to rise to $41.22. Recalled that residential owners had seen an average of 5% increase in values, resulting in higher tax bills. Noted reductions in personnel and transportation lines of the school budget, as well as school choice and charter schools. Stated that if the commercial rate is to be kept under $40, residential rate would need to increase to $19.51.

Councilor Leahy noted the amount the city spends on school choice, specifically for those who opt out of Holyoke schools, adding that he was seeking work to address the formula. Also noted some savings in charter school costs, adding a desire to reduce those costs as well. Expressed a request to see the salaries of school department. Also stated a need to reduce health insurance costs. Observed the burden on the city in paying for busses that are not being used.

Councilor McGiverin noted that the delay was largely due to the state’s delay in finalizing their budget, adding that erroneous information had been provided on the budget signed by the governor. Stated that the state budget should be done in Mar, adding that he had never observed that happening. Also noted that information on federal funding was still to be determined, adding that Cares Act funds cannot be used to replace revenue. Expressed frustrating, noting that loss in revenue in many areas is directly related to Covid. Reiterated that the vote is a reduction of the school department budget.

Councilor Leahy made a motion to suspend the rules to allow the School Department representatives to address the Council. All councilors voted in favor.

Dr. Matos observed there had been concerns that he had not yet met with the City Council, adding that his first priority had been to address the need to open schools during a pandemic. Confirmed he would work to connect with the Council and other city leaders going forward. Expressed appreciation to the team of people who had been a part of developing the budget. Noted the transportation budget had been reduced due to impacts of the pandemic, adding that after the holidays, there would be a hybrid approach beginning with pre-k to 2^nd grade with parental choice. Noted that several hundred are participating in in-person learning, mainly those with special needs. Stated that Holyoke is not competitive enough with other communities when it comes to paying educators, creating an issue with attracting and retaining them. Stated he would be pursuing a salary study. Also observed hearing from students that they are looking for educators that they connect with, particularly in culture and background.

Councilor Lisi noted that the Ordinance Committee is undertaking an effort to address city salaries in order to attract talent and retain its employees, adding recognition that the city often trains people who leave for higher pay in other communities. Expressed that the city’s success depends on being able to staff important city departments.

Councilor Anderson-Burgos expressed appreciation to Dr. Matos for his emphasis on the need to offer competitive salaries. Stated that investment in education is required to achieve results needed to get out of receivership. Added that in his new role working for the state, he would be using position to advocate for the resources that the city deserves. Emphasized the importance of the community working together to achieve results.

Councilor Vacon noted that the worthy goals of paying people fair wages need to be balanced with recognizing that the constituency is suffering during the pandemic, specifically their ability to sustain their household budgets. Noted that the tax rate decisions to be made will be difficult for everyone. Reiterated the importance of understanding who funds the city’s budget, emphasizing the need to be good stewards.

Councilor Greaney expressed concern about seniors who have tight budgets and have supported the community. Stated that a tax increase will have great impacts on them.

Dr. Matos observed that the school community has a large homeless population, adding that the end of the eviction moratorium would increase those numbers. Observed that in crises, school systems have often been a place of hope for communities.

Councilor McGiverin noted that in local shelters, a large percentage of the families are not from Holyoke, adding that many are from as far away as Boston. Emphasized the importance of education in breaking the poverty cycle. Reiterated the focus on the evening requires balancing the budget.

—> Received, passed two readings, and adopted on a call of the roll of the yeas and nays–yeas 13–nays 0–Absent 0.

(48:50)

Councilor Leahy made a motion to suspend the rules to take up items 1, 2, 4, and 5 as a package. Councilor Tallman seconded the motion. All councilors voted in favor.

Councilor McGiverin asked if the items are being looked at like committee reports.

President McGee stated that committee reports came out, but the mayor was able to work out a change with the school department for transportation costs. Suggesting sending back to the Auditor.

Councilor McGiverin clarified that this would be the Finance Committee’s recommendation.

MCGIVERIN — Ordered, that there be and is hereby appropriated by transfer in the fiscal year 2021, FIVE MILLION SIX HUNDRED SIXTY FOUR THOUSAND ONE HUNDRED FORTY THREE AND 00/100 Dollars ($5,664,143.00) as follows:

FROM:

13001-51101 PERSONAL SERVICES $2,403,808.00

13002-57000 OTHER EXPENSES 2,000,000.00

18202-56513 SPED TUITION ASSESSMENT 1,380,358.00

TOTAL: $5,664,143.00

TO:

18202-56510 SPED TUITION ASSESSMENT $282.00

18202-56511 SCHOOL CHOICE ASSESSMENT $119,741.00

TOTAL: $5,664,143.00

MCGIVERIN — Ordered that there be and is hereby appropriated by transfer in the fiscal year 2021, FIVE MILLION FOUR HUNDRED SIXTY FOUR THOUSAND ONE HUNDRED FORTY THREE AND 00/100 Dollars ($5,464,143.00) as follows:

FROM:

13001-51101         PERSONAL SERVICES                                         $2,403,808.00

13002-57000         OTHER EXPENSES                                               $1,800,000.00

18202-56513         CHARTER SCHOOL SENDING                             $1,380,358.00

TOTAL:           $5,464,143.00

TO:

18202-56510         SPED TUITION ASSESSMENT                                      $282.00

18202-56511         SCHOOL CHOICE ASSESSMENT                           $119,741.00

TOTAL:           $5,464,143.00

UNDER DISCUSSION:

Councilor Murphy requested consideration of one of the stabilization transfers, noting that there would be $400K of interest in the stabilization fund even with the $883K+ transfer. Stated that homeowners would be seeking a 6% increase in their tax bill even if the rate remains at $19.08. Also stated that there would be a 7-8% increase in commercial properties, noting it to be a time when businesses are struggling. Suggested using stabilization funds to reduce the tax levy, noting the crisis creates a unique need to provide relief. Expressed an interest in hearing the potential impact of the $883K transfer on the tax rates.

Councilor Murphy made a motion to suspend the rules to allow Assessor, Tony Dulude, to address the Council. Councilor Lisi seconded the motion. All councilors voted in favor.

President McGee reiterated the question, asking what the impact on the tax rates would be if one of the transfers from stabilization was approved.

Dulude stated the change would be roughly 45-50 cents on the residential rate as well as around $1.00 on the commercial rate.

Councilor McGiverin stated that the suggested would be a worthy discussion but expressed that he did not believe that was the intent of the mayor. Noted that the transfers had been recommended for the purpose of reducing the deficit, adding that it may not be ethical to use them for the purpose of impacting the tax rate.

Councilor Vacon expressed it would be improper to use stabilization funds as the budget is current balanced.

Councilor Lisi expressed support for the suggestion. Expressed a need for guidance on how to use stabilization funds. Suggestion that the transfers could be applied to the sewer deficit or similar line items. Stated that stabilization funds should not be used for operational expenses, adding that there is a need to understand how the funds could be used to offset balances that would be covered with the tax rate. Noted that the order filed appeared to be a blanket order with flexibility.

Councilor Lisi made a motion to suspend the rules to allow Mayor Morse to address the Council. Councilor McGiverin seconded the motion. All councilors voted in favor.

Mayor Morse clarified that no general order exists allowing City Council to make transfers from stabilization, adding that the intent was not to use those funds for lowering the tax levy. Also stated that with a balanced budget, there is no need to transfer from stabilization funds. Also noted that additional expenses may come up requiring use of those funds. Also noted that a plan to use funds for impacting the tax levy could be revisited at a later time.

Councilor Leahy agreed that consideration of impacting the tax levy should be addressed. Asked about a recommendation regarding the setting of the tax rates.

Mayor Morse noted that he may have chosen to give recommendations in the past but did not have one for this year, adding that he had not given a recommendation in the last five years.

Councilor Tallman recognized the difficult times and expressed appreciation for Councilor Murphy’s suggestion but noted that the budget is balanced. Stated the role of the Council is now to set the tax rate. Emphasized the importance of getting tax bills out in a timely manner.

Councilor Murphy expressed disappointment that consideration wasn’t taken to use stabilization funds, given the difficult financial situation many residents and businesses face due to the pandemic. Expressed concern that many may not be able to pay the tax bills.

Mayor Morse noted that local governments are required to balance their budgets, adding that the financial needs of the city need to be advocated for with the federal government. Expressed that the one-time payments to Americans wasn’t enough. Also stated that the majority of PPP loans went to large corporation and questioned the ethics of that.

Councilor Greaney stated that many taxpayers may pay a little more but noted that some will end up paying a higher percentage of their income. Expressed concern for those who cannot afford an increase.

President McGee reiterated that the transfers had been proposed for specific purpose, noting that financial transfers cannot be amended.

Councilor Anderson-Burgos expressed concern for the elderly, others also on fixed incomes, as well as small businesses. Asked if there are alternative methods for providing relief to these taxpayers and businesses.

Dulude stated that exemptions are in place for residents over 67, adding that they would file and that there are income requirements. Noted that the current year had seen an increase in those applications. Also stated that there are exemptions for veterans who are out of work and/or disabled. Stated that there is also an abatement process, adding that extra funds had been put aside for abatements.

Councilor Lisi asked for a reading of the orders in question.

President McGee read items 2 and 5, the transfers of $614,927.85 and $883,758.85 from the stabilization fund to the general fund. Offered a reminder that item 5 had been referred during the December 15th Council meeting and that item 2 had been offered as a replacement the next day to adjust for new financial information.

Councilor Lisi noted that the language is open-ended, adding that a reason for the transfer isn’t stipulated. Observed there may have been an intent, but the Council could still act on it. Observed the suggestion to be a sound option, adding that there would need to be assurances that the funds get applied to an appropriate line item.

Councilor McGiverin expressed disagreement, adding his respect for the idea. Reiterated that the order’s intent is no longer in place. Noted that taxes are needed to pay for the services the city offers, adding that the state dictates what municipalities can use for taxes. Noted that until a better way is offered, property taxes are the main source of local governments to operate.

Councilor Murphy stated that many late files have come for this meeting in the past, noting that many came in during the previous year. Asked the mayor to consider a late file to use stabilization funds for reducing the tax levy. Emphasized the relief that taxpayers need during a crisis.

Mayor Morse stated he would not be submitting a late file for the requested purposes. Expressed that the city shouldn’t cover what the federal government should be helping.

Councilor Bartley asked for a point of order, noting that Councilor Murphy appeared to be asking for separate votes.

Councilor Murphy confirmed that would be his preference.

—> Reports of Committee received and referred to the Auditor.

MCGIVERIN — Ordered, that there be and is hereby appropriated by transfer in the fiscal year 2021, SIX HUNDRED FOURTEEN THOUSAND NINE HUNDRED TWENTY SEVEN AND 85/100 Dollars ($614,927.85) as follows:

8810-59710 TRANSFER TO GENERAL FUND $614,927.85

1005-49720 FROM STABILIZATION/SPEC REV $614,927.85

MCGIVERIN — Ordered that there be and is hereby appropriated by transfer in the fiscal year 2021, EIGHT HUNDRED EIGHTY THREE THOUSAND SEVEN HUNDRED FIFTY EIGHT AND 85/100/100 Dollars ($883,758.85) as follows:

FROM:

8810-59710                    TRANSFER TO GENERAL FUND                 $883,758.85

TOTAL: $883,758.85

TO:

10005-49720                  TRANSFER FR STABILIZATION/SPEC REV $883,758.85

TOTAL: $883,758.85

UNDER DISCUSSION:

Councilor McGiverin reiterated his objection, noting that the intent of the order is no longer valid. Also stated that the mayor has made clear he would veto the order, adding a delay that would require a new special meeting to set the tax rate and cause tax bills to be mailed late.

Councilor McGiverin respected the sentiment of the motion by Councilor Murphy but supports the point by Councilor McGiverin.

Councilor Sullivan expressed that he supports the intent but noted that there was no guarantee that a transfer to the general fund would be put against the tax rate.

—> Received and referred to the Auditor.

(1:22:50)

MCGEE — Ordered that the CC set the minimum residential factor for FY21 and set the tax rate

UNDER DISCUSSION:

Councilor Tallman asked if the vote was being done to set the rate.

President McGee stated he was confirming to assure everyone has the necessary materials.

Councilor Tallman stated he did not see the rate information.

Councilor Lebron-Martinez suggested sharing the information on the screen.

Dulude stated he likely did not have the capability to present the information.

Councilor Anderson-Burgos suggested that the Admin could present the information.

Dulude confirmed that the Admin had been sent the email.

Admin Anderson-Burgos presented his screen.

Dulude stated that several pages are available with multiple options.

Admin scrolled down to show the current rate.

President McGee clarified the process for voting on rates, noting that three suggestions would be allowed at a time. Asked for clarification of the way each set of three are handled.

Councilor McGiverin stated that all three have to be voted on first before amendments can be proposed.

Councilor Lebron-Martinez asked for a reminder of the current rate.

President McGee stated that the current residential rate was $19.08, and the commercial rate was 39.73.

Councilor Tallman made a motion to set the CIP shift to 1.6310. Councilor Lisi seconded the motion.

President McGee clarified that the motion would result in a $19.38 residential rate and a $40.35 commercial rate.

Councilor Bartley made a motion to set the CIP shift to 1.6540. Councilor Vacon seconded the motion.

President McGee clarified that the motion would result in a $19.18 residential rate and a $40.92 commercial rate.

Councilor Lisi made a motion to set the CIP shift to 1.6430. Councilor Bartley seconded the motion.

President McGee clarified that the motion would result in a $19.28 residential rate and a $40.65 commercial rate.

—> Motion to set the CIP shift to 1.6430 was received and denied on a call of the roll of the yeas and nays –Yeas 3 (Anderson-Burgos, Leahy, Lisi)–Nays 9–Absent 1 (Hernandez).

—> Motion to set the CIP shift to 1.6540 was received and denied on a call of the roll of the yeas and nays –Yeas 5 (Anderson-Burgos, Bartley, Greaney, Lebron-Martinez, Vacon)–Nays 7–Absent 1 (Hernandez).

Councilor Vacon asked for guidance from Tony Dulude on what the shift of 1.6310 would do to the average homeowner’s tax bill.

Dulude stated that on the average residential bill, it would add an extra $61 for the year, adding that with the value increase, it would be about $252 for the year.

Councilor McGiverin asked for information on the change for the commercial average.

Dulude stated that it would go up at least $1,000, adding that the average commercial value is $649K.

Councilor Vacon noted that average residential values increased about 5% and asked to confirm that commercial values had decreased.

Dulude stated that the Holyoke Mall is a part of the commercial calculations, adding that without the mall, the average increase would likely be cut in half.

Councilor Vacon asked for the percentage of the commercial value decrease.

Dulude stated it was about a $45 million decrease.

Councilor McGiverin asked if the new averages were used in the calculations.

Dulude confirmed.

Councilor McGiverin observed that averages can be tweaked, noting that single and two-family homes would have different averages. Expressed that there is no fair way to set property taxes.

—> Motion to set the CIP shift to 1.6310 was received and denied on a call of the roll of the yeas and nays –Yeas 3 (McGiverin, Murphy, Tallman)–Nays 10–Absent 0.

Councilor Lisi made a motion to set the CIP shift to 1.6430. Councilor Anderson-Burgos seconded the motion.

President McGee clarified that the motion would result in a $19.28 residential rate and a $40.65 commercial rate.

Councilor Bartley made a motion to set the CIP shift to 1.6520. Councilor Vacon seconded the motion.

President McGee clarified that the motion would result in a $19.20 residential rate and a $40.87 commercial rate.

Councilor Sullivan made a motion to set the CIP shift to 1.6150. Councilor McGiverin seconded the motion.

President McGee clarified that the motion would result in a $19.51 residential rate and a $39.95 commercial rate.

—> Motion to set the CIP shift to 1.6150 was received and denied on a call of the roll of the yeas and nays –Yeas 4 (Leahy, McGiverin, Murphy, Sullivan)–Nays 9–Absent 0.

—> Motion to set the CIP shift to 1.6520 was received and adopted on a call of the roll of the yeas and nays –Yeas 7–Nays 6 (Leahy, Lisi, McGee, McGiverin, Murphy, Sullivan)–Absent 0.

Councilor McGiverin made a motion to reconsider. Councilor Lisi seconded the motion.

UNDER DISCUSSION:

Councilor McGiverin stated that the motion is due to a concern that the increase on the commercial rate would be detrimental to the whole community. Noted that the increase in rate is higher for tax bills that are already higher than residential bills. Recognized that the rate is unlikely to stay under $40 but expressed there to be a need to protect businesses.

Councilor Greaney noted that the stated interest was to keep the commercial rate down, adding his concern that the residential rate should stay down. Suggesting considering the rates independent of one another.

President McGee clarified that the consideration cannot be done as suggested.

Councilor Lisi observed that the original motion put forward by Councilor Tallman would be roughly a 30 cent increase on each side. Also stated that with increase in home values, the most equitable solution be a residential rate increase between 20-28 cents. Reiterated the hardships experienced by residents would be felt more, adding that the decrease in commercial values would lessen the impact of the rate increase.

Councilor Tallman suggested returning to the original suggestion, reiterating the impact of increased home values. Observed not reconsidering tax rate votes in the past.

Councilor Sullivan observed that while average commercial values have decreased, most commercial values have increased. Emphasized that increases in most commercial values were not able to offset the mall’s devaluation. Offered a reminder that no cuts in spending were suggested in June. Emphasized the need to keep the commercial tax rate below $40 in order to keep businesses in the city.

Councilor Bartley recognized the concerns of other councilors in terms of protecting the businesses or protecting residents, adding that the main concern is a growing budget.

Councilor McGiverin asked for consideration on the impact to small businesses when increasing their tax bills. Asked for a fair balance between the residential and commercial rates.

Councilor Sullivan asked for consideration of the message sent to potential business owners with the highest commercial tax rate in the state.

Councilor Anderson-Burgos expressed support for reconsideration, adding a need to find a balance.

President McGee reiterated Councilor Tallman’s point that reconsideration hasn’t been done before, adding that the times are unique and that many people and business are struggling.

Councilor Tallman expressed support for reconsideration.

Councilor Lisi asked for a clarification, noting that the final motion of the set had not yet received a vote.

President clarified that the final motion would receive a vote first.

Motion to reconsider passed on a show of hand vote.

—> Motion to set the CIP shift to 1.6430 was received and adopted on a call of the roll of the yeas and nays –Yeas 9–Nays 4 (McGiverin, Murphy, Sullivan Vacon)–Absent 0.

Councilor Bartley asked if the Council needs to sign anything.

Dulude clarified that signatures are not necessary due to streamlining of government during Covid, adding that the City Clerk just has to sign off on the vote for the DOR.

Councilor Bartley made a motion to adjourn. Councilor Vacon seconded the motion. All councilors voted in favor.

Adjourn at 8:31PM.