Discussions Start With Bad News for Budget


The City Council met for its first budget meeting of the year on Tuesday. Here’s what you need to know:

High on the list was discussion of whether or not to adopt the COLA ordinance. This ordinance, which most municipalities adopt every year because it gives them flexibility in how much they can spend in future budgets, was not adopted in Clifton in 2023. As a result, the unexpected increase in liability insurance for 2024, along with other large expenses, has created a need for significant budget cuts. Without a COLA ordinance for 2024, which would allow the council to spend beyond the 2.5% cap if needed to balance the budget, there would need to be budget cuts in excess of $2.4 million. If they adopt it, the council will still need to cut $1.2 million to stay within the appropriations cap. The state puts this cap in place and allows only two years of banked spending to prevent municipalities from saving money for years and then suddenly deciding to spend $20 million on one huge project, causing a huge spike in property taxes.

Joseph Kunz, the Chief Financial Officer, cautioned that there will be no cap bank for 2025 since the ordinance wasn’t adopted last year and Council will need to spend whatever was left in the bank from 2022 to help with this year’s budget. The city is $11.8 million short on revenue compared to appropriations (spending), he said.

Kunz urged the council to start there. “Our revenues are still not back to where we were,” he said. Interest income is the only line item that made money this year and many other revenue streams fell short. Ambulance fees brought in what was anticipated, but most other revenues are flat or dropping.

We need to get the budget balanced, he said, because the state won’t allow the city to raise taxes by more than a certain amount, which in turn limits what the city can spend. This is what the COLA ordinance is used for; it gives municipalities the flexibility to spend a certain percentage above the capped maximum.

Big cuts need to be made to “come into cap” and this will drastically affect the 2025 budget because there will be no cap bank to help balance it. Kunz highlighted several line items that increased on the appropriations side - money the city must spend - and that cannot be cut: garbage, pension payments, salaries, and liability insurance.

Mayor Ray Grabowski made the case that passing the COLA ordinance would give the city the flexibility it needs. “We don’t have to use it,” he reminded his colleagues. “It’s a safeguard.”

“We’re looking at a whole bunch of cuts,” Councilman Joe Kolodziej said. He explained that if the council adopts the COLA ordinance, they could still choose to cut $2.4 million from the budget and bank the rest for future spending. However, if the city doesn’t adopt the ordinance, they have to cut $2.4 million just to pay the bills. Having spending capacity in the cap bank helps the city cover unexpected expenses.

Kolodziej wanted to know where his colleagues stood on the matter, saying that it’s important to know what they’re working with. “Are we going to pass the COLA ordinance or not? That will dictate how we approach the budget.”

“I’m leaning towards passing it,” said Councilman Tony Latona, who also made it clear that he wanted to see reforms in the way the budget is handled. He acknowledged that the flexibility would be important.

No vote was taken at this meeting, as Councilwoman Mary Sadrakula argued that they shouldn’t even discuss it until the budget is figured out, although having that settled would likely influence budgetary decisions.

The council also clashed on the issue of establishing a new sewer rate. The council paid for a study last year that indicated how those rates should be adjusted but has not yet done anything with that information.

Sadrakula was not in favor of raising the sewer rate for 2024. “We can do it for 2025,” she said.

“You’re not doing your fiduciary duty,” City Manager Nick Villano replied, clearly frustrated. A public hearing will need to be set before the adoption of the new sewer rate, on which the current version of the budget was based.

“We’re not making any headway,” Villano said, who was anxious to know whether Council was going to pass the new sewer rate or not. If they don’t, he’ll need to rework the budget with the current rate. Although not binding, the Council took a poll to get a sense of what everyone was thinking. Latona abstained but indicated that he understood that they ultimately do need to raise the rate and Sadrakula said “no.” Everyone else said yes to adopting the new rate, as per the sewer study.

City Council will meet on Tuesday, February 6th at 6:30 for a regular meeting. At this meeting, it is expected that they will choose a temporary replacement to fill Councilwoman Lauren Murphy’s seat.

The next budget meeting is scheduled for Tuesday, February 13th at 6:30 pm.

The current and prior years’ budgets can be found on the city website. Working budgets, not yet ready for a vote, are not shared with the public.

I'm interested
I disagree with this
This is unverified