The Finance Committee voted to approve the following (see Report and watch NewTV video):
- Acceptance of a $948.55 donation from the Garden City Preservation Society to support the Parks, Recreation, and Culture Department’s beautification work in Newton Center. The Committee voted to approve 8-0.
The Finance Committee voted to deny the following:
- Establish and appropriate funds to an Operations Booster Stabilization Fund (OBSF). The Mayor requested authorization to establish an “Operations Booster Stabilization Fund” to pay for a portion of the annual general fund appropriations for the City’s pension system; appropriate the sum of $20,500,000 Overlay Surplus as declared by the City’s Board of Assessors to the Operations Booster Stabilization Fund and transfer the sum of $5,513,000 from the Appellate Tax Board Interest and Penalties Fund to the Operations Booster Stabilization Fund.” According to the report, the intent is to use the money to help reduce the impact of the required increases for the next 8 years, funding the pensions and be able to provide funding to the Newton Public Schools.
The intent is for the OBSF to remain open for at least 3 years (eventually going to $0). Any appropriation from this fund would require a 2/3 vote of the City Council to appropriate the funds. According to the report, it was explained that “The hope was to have this item presented in front of the whole City Council at the next meeting, which is September 18th, and to have this plan in motion for the end of September. This year probably represents the highest interest rate that will be earned, so the idea was to set up this fund as early as possible so it can earn the maximum amount of interest possible.”
Councilors raised the following:
- Interest earned would be a relatively small amount and not be an investment that would generate a large amount of money.
- Considering interest rates, the City will lose money at the end of this proposed 8-year period than the City began with.
- Investing in upfront and transition projects on a 1 – 2 year period would be a better way to save money on an annual basis.
- Desire for more collaboration with Council members on this when creating the framework for the plan.
- Concern regarding legal restraints and protections to the schools to ensure the money will still be there if priorities were to change in future years and “The only school spending associated with this plan is a promise outside of the legal directives of the fund.”
- Additional time needed because there are so many questions.
According to the report, the Committee suggested that Chief Financial Officer Maureen Lemieux work with the Law Department to tighten the language of the Council Order. A motion to approve the item subject to second call was made by Councilor Norton. The motion was denied 3-4-1 with Humphrey, Malakie, Oliver, and Noel opposed, Gentile abstaining.