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Date: 8/11/2021
HOLYOKE – After hours of debate during their Aug. 3 meeting, the Holyoke City Council was unable to come to an agreement on what a new sewer rate should be for city residents and taxpayers.
In his report, City Council President Todd McGee informed the council that Jenna Wellhoff, who serves in the city’s solicitor department, had given her two weeks’ notice and would be leaving for a new job. He thanked her for working with the city and her work, however, he said “our legal department is in trouble.” McGee said some orders had been filed in an attempt to restructure the legal department.
He added that had Attorney Lisa Ball not joined the department, “it would have been just Jenna, and if Jenna is now giving her two weeks’ notice we would have no legal department.” He said, “Zero, no paralegals, no staff, no nothing. That can’t continue. A city without a legal department is in serious trouble.”
McGee went on to welcome the Spanish translators to their first meeting, explaining that both Acting Mayor Terrance Murphy and Councilor David Bartley “did a lot of work” to ensure that meetings would be accessible to Spanish-speaking residents in the city. He also announced during his report that the COVID-19 testing sites would be extended through Oct. 31. He then went on to explain that some of the polling locations previously used by the city had come into question due to the ongoing coronavirus pandemic and said a variety of locations had been reviewed. The Election Committee’s formal recommendations following their review of the polling locations suggested the use of the senior center, the bottom level of City Hall and the War Memorial among the alternative sites for the municipal election in November.
The council also addressed the ongoing concerns of residents and some councilors regarding a proposed increase to sewer rates to $8.05 per 1,000 gallons. However, after a recent Ordinance Committee meeting, a recommendation came before the council proposing an increase to just $7.77 per 1,000 gallons. Councilor and candidate for mayor Rebecca Lisi, who serves as chair of the committee, said during the meeting they had learned there was “roughly $9 million operating budget for the sewer enterprise fund and we are collecting about 97 percent of all the funds that we’re charging to operate that enterprise fund.”
The remaining 7 percent, she explained, “is about $500,000 that we are behind on.” She said that for the city to operate at a “bare minimum” with their annual projected 93 percent collection rate would require sewer fees to be raised to at least $7.77. She explained that the proposed $8.05 per 1,000 gallon fee would allow for the city to collect revenue and build up money to avoid an increase in the coming year.
“That $7.77 is not going to be relevant in a year, first of all, and it doesn’t build in any cushion for any contingencies or emergencies that come up in the next year or until we set the next rate,” Lisi said. Murphy then explained he had several meetings with many people to “try to get the enterprise fund balanced.”
“My goal all along is to get that balanced, so that whoever is going to be in room one come November is going to be able to start without worrying about an enterprise fund deficit,” he said. Murphy said when he began budget discussions the deficit was $1.7 million, but it was now down to about $1.2 [million]. Should the city go forward with the $8.05 fee, he said he anticipated they would not need another sewer rate increase until fiscal year 2026 (FY26). However, should the city move forward with the $7.77 fee, he said it would “just about balance the FY22” fund. He added that should the collection rate go up to 96 percent, it would add another $250,000 to the fund, but that would “barely get us to balance in FY23, but would put us in deficit for FY24 without having another significant rate increase.”
As a form of compromise to provide some relief to Holyoke businesses and residents, he discussed creating a tax relief stabilization fund from the stabilization fund. This, he said, would “reduce the expense this fiscal year.”
“Obviously this has been a tough year for many, many people economically with lost jobs, lost income, that sort of thing. So I would take a significant portion of the – if it’s $1.1 million, I would take about $800,000 and ask the council to establish a tax relief stabilization of $800,000, which would mean the net additional expense for this fiscal year, if the rate was $7.77 would be about $300,000,” Murphy explained. He said for the average person it would be “about $25 a year,” adding that while he was trying to be conscious of hardships, at some point they would need to find a way to balance the budget.
Murphy said he felt “the right thing to do” was to balance the fund, but also to provide relief so people wouldn’t “get hit” with a significant tax increase due to the $1.1 million deficit that the city was currently facing. “I think it’s a pretty good compromise,” he said, adding he hoped the council would “adopt the $7.77” and would continue to encourage the Department of Public Works (DPW) to continue to pursue collections. Councilor James Leahy asked the current rate, which Lisi said was $6.65. He then went on to address an order he said had filed a while ago to pursue an outside collection agency. “What ever happened to that?” he questioned.
Murphy said he was unsure, and Leahy went on to express that he felt as though the majority of the unpaid fees were likely from businesses that no longer had a presence in the city. This, he said, was unfair to residents as it placed an unfair burden onto those who currently lived and worked in the city to pay. “Now they have to pay for some company that’s no longer here, not looking back and couldn’t care less,” he said, adding that he felt leans should be put on properties. This, he said, would allow for properties to be unable to be sold until past fees and taxes were paid to the city.
Councilor Howard Greaney said he felt there should be no more increases in the fee or tax rate until “we streamline our budget” to provide the relief to taxpayers. Councilor Linda Vacon said she felt the $7.77 fee was unfair to those who paid their bills and “assumes we can do no better than the 93 percent collection” rate. “The biggest objection from the taxpayers is why should my rate go up when so many other people aren’t paying their bill,” she said.
She said she felt they needed to “challenge ourselves” to increase their collections and decrease their annual loss of about $500,000 annually. “I don’t see how setting a rate on the backs of people who are paying their bills, that’s putting any incentive on us who aren’t paying their bill to do so,” she said, adding she would not be supporting the $7.77 rate.
Councilor Joseph McGiverin said the DPW superintendent had explained that the bulk of the deficit for the fund was not from unpaid fees, but instead for the cost of the treatment plant operation. He said he felt Murphy was correct to try to balance the budget and was worried that free cash would be “wiped out” should they need to use funds from the stabilization fund. He went on to address those in West Holyoke who had been subsidizing the sewer fund and did not even have the option to connect to the sewer system. He said those tax dollars could be better spent on departments such as the police or fire department rather than funding the cost of the wastewater treatment plant.
However Murphy said even at a 100 percent collection rate with the $7.77 increase, the FY23 fund would once again be facing a deficit. He said while he would do whatever the council wanted and would do what he could to provide relief to residents, they needed to address the issue moving forward. “At some point we’ve got to truly deal with the economic issue, and the current issue right now is we don’t have enough money in that account,” he said. “We need to make some moves, we need to make some decisions.”
He went on to say, “The reality is we do not have enough money to fund the enterprise fund and it’s making taxpayers pay for the deficit.”
Vacon said while she appreciated and noted that the goal was to balance the fund, to take the money out of the stabilization fund “to subsidize the tax rate to increase the sewer rate” was just “kicking the can down the road and avoiding the fundamental problem.” This, she said, was “the size of our local government has now exceeded the ability of the taxpayers to support it.” She said the “big issue” was to simply “balance the budget and bring it into a size that the taxpayers can afford.”
Greaney said he didn’t want to see anyone “forced to sell their home” due to their inability to pay the fees and taxes, which have increased over the year. After some additional discussion,the council proposed three tax rates, which would each be voted on. Lisi made the first motion to set the rate at $7.85 while Murphy made a motion to set the rate at $7.77 and Bartley made a motion to set the rate at $7.23, each motion was seconded. Bartley’s rate was first to be voted on, and ultimately failed with a vote of four to nine. Murphy’s proposed rate was then voted on, but also failed with a vote of six to seven. Finally, the council voted on Lisi’s proposed rate, which also failed with a vote of four to nine. The council then voted against a motion to table the matter, and the council once again voted on the three different rates.
Murphy was the first to propose a rate of $7.80, followed by councilor Libby Hernandez who proposed a rate of $7.75 and Greaney who proposed a rate of $6.70. The rate of $6.70 failed by a vote of 4 to 9, followed by the rate of $7.75 which also failed by a vote of 4 to 9. The $7.80 rate also failed by a vote of four to nine. The council voted against a motion to table the matter and Lisi once again made a motion to vote on a new round of three rates.
She proposed a rate of $7.80 while Murphy proposed a rate of $7.77 once again and Vacon proposed a rate of $7.23. Councilor and mayoral candidate Mike Sullivan along with councilors Bartley, Greaney and Vacon all said they would be supporting the $7.23 rate as they felt it was the most fair to tax and ratepayers. The $7.23 rate failed with a vote of six to seven, the $7.77 rate was voted on by a vote of seven to six. Initially, it was thought by some councilors that the rate passed. However, after a lengthy discussion as to whether a simple majority or two-thirds vote was needed, McGee ruled that the two-thirds majority was needed and the council then voted against tabling the item for a fourth time.
The council moved on to a fourth round of proposed rates with Councilor Peter Tallman proposing a rate of $7.50, Bartley proposing a rate of $7.25 and Hernandez proposing a rate of $7.77. The rate of $7.77 was defeated by a vote of 7 to 6, the rate of $7.25 was voted down by a vote of 4 to 9 and the rate of $7.50 was also voted down by a vote of 8 to 5. In a fifth round of voting Sullivan proposed a rate of $7.45 while Vacon proposed a rate of $7.30 and Lisi proposed $7.65. The rate of $7.65 failed with a vote of 8 to 5, the rate of $7.30 also failed by a vote of 4 to 9 and the rate of $7.45 failed by a vote of 2 to 10.
After two more rounds of voting, the council voted to table the matter.