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Havre de Grace council finally passes 2015 city budget

After an unplanned post-election delay, the Havre de Grace City Council passed the city's 2015 budget after reconvening Wednesday night and agreeing to shift some revenue and restore two previously planned cuts.

Council members also agreed to a hiring freeze on four open positions in city government.

The council had made the unusual step of going into recess at its June 16 meeting, when a vote on the budget originally had been scheduled, having taken no action.

Mayor Wayne Dougherty proposed a budget of roughly $15.4 million for 2015, a spending cut of $835,000 compared to the previous year.

The council passed amendments Wednesday to find an alternative funding source to avoid borrowing $200,000 from the emergency reserve fund and $114,500 from the Marina Fund to balance total projected spending.

It also restored $150,000 in funding to buy self-contained breathing equipment for the Susquehanna Hose Company, the volunteer fire company serving the city, and to increase $10,000 in funding to Community Projects of Havre de Grace, Inc., to help with the Winter Wonderland project.

The council also git up to date numbers on the final health care cost increase for 2015, which came in at 12 percent, lower than the mayor had projected. The hiring freeze, plus projected reductions in overtime for police and city government employees, are expected to save $273,000 in expenses, according to a summary of final budget recommendations by the mayor.

Councilman Fred Cullum, who was alone in voting against the final budget, blasted the last minute changes as meaningless. The 2015 fiscal year starts July 1 and the city is obliged under state law to have a budget approved before that date.

"At the end of this fiscal year, Fund 9, the water and sewer fund, will be $1.3 million in the red, and that $1.3 million is out of the general fund to pay the bills," Cullum said.

He said council members have complained each year about not getting enough highway user revenues from the state, and this year the state finally allocated $352,000 to the city.

"You know how much is being used to pave the streets? Not one thin dime, because we had to keep it in reserve to pay the water and sewer fund," he said. "That's not how it should work."

Cullum said the city did not stand a chance of getting the 50 water and sewer hook-ups presumed in the budget by the end of the current fiscal year. Revenue from the hook-ups is counted on to balance the debt-ridden water and sewer fund.

The water and sewer fund has been accumulating a multi-million dollar deficit because of the home building slowdown, but the council earlier delayed implementing a recommended 15 percent user rate increase the mayor and the water and sewer commission recommended in an effort to reduce the shortfall.

"I guarantee you at the end of the year, we'll have $1.6 million [in debt] because those [final] connections aren't gonna happen," he said. "We budgeted for 50 and we have 28, and we've got a week left in the year to go from 28 to 50, and I don't think that's going to happen."

Meanwhile, Cullum said, city employees are being denied their scheduled salary increases.

"There was no effort to try to pay the employees what they're due, and the employees worked all year with the understanding that if they did a good job and worked satisfactorily all year [they would get an increase]," he said. "I mean, to me, it's not right. Obviously I'm wrong and the other five of you are right, but that's the way I feel about it and I won't vote for the budget."

Councilman Steve Gamatoria, who joined the council following the May city election, said he appreciated Cullum's "passion" but wondered why Cullum, during his long service on the council, had not made a dent in the Fund 9 debt in his many years in office.

"That's been occurring for how many years, Councilman Cullum?" asked Gamatoria, who served a previous term on the council. "I take exception to the idea that we didn't do anything, because we didn't balance this budget with borrowed money. The emergency fund, in my opinion, and by design, is for catastrophic failure and not being able to balance the budget is not a catastrophic event."

"We're at least trying to make some changes," he continued. "Is it challenging? Absolutely it is. Is it more of the same? No."

About the lack of merit increases, Gamatoria said: "I feel terrible that Council President [Bill] Martin is a teacher and he hasn't gotten an increase as a teacher in, how many years?"

Gamatoria also said the hook-ups are "monumental" in getting the city through the year.

"We've got some work to do to encourage developers and encourage builders," he said. "I'm not saying we have a horrible reputation but we need a stellar reputation so people want to come here and build."

"I tell you what, we're going to do something different this year than past year," he added.

Martin said he has a lot of concerns about the future of the city and found it very "disheartening" that the city could not offer cost-of-living increases to employees.

Several city employees filled the council chamber for Wednesday's meeting.

"To me the most important thing we can do is a healthy budget that provides good health care for employees and that good employees get a good wage," Martin said.

This is an updated version of a earlier report and contains corrections regarding the council's decision not to used money borrowed from the emergency reserve and marina funds to balance the overall operating budget.

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