Hopewell Council postpones budget vote

May 11--HOPEWELL -- Council again postponed its vote on the fiscal year 2018 budget Tuesday night after a contentious discussion that left some councilors baffled.

"I'm a little thrown here," said Ward 1 Councilor Christina Luman-Bailey at the May 9 meeting. "I thought that most of the potentially controversial items had already been resolved."

The $52.7 million general operating budget presented by City Manager Mark Haley and Assistant City Manager Charlie Dane Tuesday included no additional revenue from a four-cent real estate tax increase that city administration proposed earlier this spring and Council struck down last week, although it did rely on a half-percent increase in the city meals tax. Council approved the latter bump unanimously later in the evening, with Councilor Jasmine Gore absent for the vote.

Although pared down from earlier versions of the budget that relied on two- and four-cent real estate tax increases, the budget under consideration adds a number of positions to municipal government, including a Finance Department position, a part-time administrative support position in the Human Resources Department, two real estate assessors, six firefighters, an assistant fire chief, a building maintenance technician, a rental inspector and two downtown police officers.

The six firefighters will largely be funded through the transfer of recovery funds from the Hopewell Emergency Crew, which is undergoing a merger with the Hopewell Bureau of Fire.

The budget also includes $515,000 in extra funding for the schools, which Council approved last week, as well as adjustments to employee compensation and increases to account for higher health insurance costs. The city would also end its financial support for health insurance for the spouses of pre-2003 retirees, although spouses would be permitted to remain on the city health insurance plan.

The question of retiree spousal health benefits has been one of the more controversial issues of the budget, sparking protest from the group of retirees who would be affected. Councilor Arlene Holloway later in the evening voiced discomfort with the change, which is projected to save the city $100,000, and asked the administration to go "back to the drawing board" on the issue.

Despite little initial argument on the overall financial plan after the public hearing, a motion by Ward 5 Councilor Janice Denton to approve the first reading of the budget -- which would not be enacted until passage of a budget resolution at the second reading -- failed for lack of a second.

As Council paused uncertainly, Ward 6 Councilor Brenda Pelham put forward a motion to approve the fiscal year 2017 budget for FY2018, "except for the already appropriated funds for the School Board and the increase in the meals tax." Her motion was simultaneously seconded by Councilors Arlene Holloway and Tony Zevgolis.

The proposal sparked protest from several councilors, as well as Haley and Dane.

"I don't really see how we could adopt [FY]17 given all the different pieces involved in that," said Luman-Bailey, who suggested that instead the vote be postponed until Council's May 23 meeting.

Mayor Jackie Shornak argued that such a course would be unwise and "not efficient," while Denton declared, "I have been coming to meetings and discussing the budget now for about six weeks or two months, and we've been discussing the 2018 operating budget. I have no clue as to what the 2017 budget is."

Haley and Dane raised several practical challenges, including changes that have occurred in health insurance rates, which Council voted to set in April, salary raises that have been granted over the past year, upcoming required maintenance for the state-mandated radio system, planned increases in debt payments and the fact that the FY17 budget is higher than that proposed for FY18.

"That means everything has to be redone," said Haley. "I'd submit to you we couldn't possibly build a budget in two weeks."

Pelham conceded that "all that may be true," but held firm, pointing out that the budget is not due until June 15 and suggesting that city personnel "chuck it up and work within the means that you already have."

"You've been doing it all year, so I don't see what the hardship would be to maintain that status. Because again, we haven't had the biggest thing that we cry about: the CAFR not being done," she said, referring to Hopewell's 18-month-overdue Comprehensive Annual Financial Report for 2015. "I think as fiscally responsible leaders we cannot continue to add debt to the city and include budgets without knowing the bottom line."

Dane, however, maintained that while preparation of the FY15 CAFR has been "a mess," "it has no bearing on what revenues we've projected this year."

"We know what our revenues have been the last several years. We know how they're trending right now. ... We're very comfortable that you have enough revenue to balance your budget without touching any money from the surplus," he said.

Pelham subsequently offered to withdraw her motion to adopt the FY17 budget if the vote was postponed.

Council voted 4-2 in favor of postponement, with Denton and Shornak opposing the motion.

Reached May 10, Councilor Gore said that she had met with Haley and Interim Finance Director Lance Wolff Monday and that she felt "more confident about the budget" but that until she reviewed the most recent documents presented to Council, she could not say whether or not she supported the plan.

"I don't want to make a decision that I will come to regret," she said.

The budget will next come before Council May 23.

--Sarah Vogelsong may be reached at svogelsong@progress-index.com or 804-722-5154.

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