By Chris Munzing
Democratic councilmen Lenny Remo and Denis Kelly voted against the budget, and Kelly said that boasting about a surplus was dangerous, because the final numbers for the current fiscal year wouldn't be known until August.
Hennessy said that the adoption of next year's budget and the surplus the city should realize at the end of the current one was proof that the Republican majority on the council did the right thing by not raising property taxes. "We made a promise that we weren't going to raise property taxes, and we have not," Hennessy said. "We're doing the taxpayers a service. We inherited a $7 million debt a year ago. And not only have we eliminated it, we have a surplus, and we didn't have to raise taxes."
The approximate $7 million deficit was the combined result of a deficit of $2.3 million left over from the 2003-04 fiscal year, and bonds totaling $4.7 million passed in December 2003 to cover termination pay, according to Hennessy.
Hennessy said that the deficit was paid in full, and the $1.9 million hole left over from the unrealized sale of the Waldbaum's property and the property at 240 Shore Road was also covered. He attributed the turnaround to a city work force that "buckled down and worked with us to control costs while still running this city," and said that about 85 percent of the revenue lines in the current fiscal year's budget came up with much more than was anticipated.
"Last year was a very conservative budget," Hennessy said. "And to be honest with you, the best-case scenario happened. The state comptroller's office was here going over everything for two weeks, and they acknowledged this surplus. Things worked out, and we ended up with much more than we anticipated."
So much so, Hennessy said, that the city is projected to end the current year with a $1.7 million surplus. City Manager Charles Theofan said the surplus would help bail out the water and sewer funds, leaving the city with an approximate $500,000 surplus.
"The state comptroller's office agrees with these numbers," council Vice President Tom Sofield said. "We said we wouldn't raise taxes, and we feel like we've been vindicated. The financial health of the city has taken a turn for the better."
While the state comptroller's office did agree with the numbers, it said that the city should not be relying on one-shot revenue sources, such as the sale of city-owned property, to balance its budget.
And Kelly disagreed with Hennessy's assessment that the deficit would be eliminated. "They're counting on revenues that they haven't seen yet," he said. "It's easy to make projections, but you don't have any proof to support or reject it."
Kelly said that the city wouldn't know where it stands for the current fiscal year until August or September, when the city audits the previous year. "I'm betting we're in a deficit, but we won't know until then," he said.
"I voted against this budget because of its reliance on fees as a revenue stream and the $3 million one-shot revenue from Shore Road," Kelly added. "If these one-shots don't come to fruition, we're going to end up having to hit people with a huge tax increase."
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