Special Board of Aldermen 6-13-2022 Page 5
Alderman Sullivan
My only question was why did we do it for three years in a row and now we're not doing it?
Steve Bolton, Corporation Counsel
| think it was illegal to do it for those three years. Former Alderman Teebow and then Alderman Moriarty took the City
to court over that. In that case, the court found it did not have to reach the question of whether the budget in that
year, | believe that year was '18, those Ordinances should have been followed as they were then in effect. The court
didn’t reach that question because it founded the entire spending cap itself did not comply with State law. State law
last year in 2021 was amended to essentially say “regardless of what the Supreme Court said, that spending cap is
okay, go with it”. So we're going with the spending cap as is contained in the budget. What was done in prior years, |
think, was illegal.
Mayor Donchess
Now | see the confusion. | get why it’s confusing. | can state and you haven't given a timeline. So this is my
understanding subject to correction by either of our other two experts - Attorney Bolton or Mr. Griffin. But if you look at
the spending cap, it is very basic. It says in Section 56c of the Charter. “In establishing a combined annual municipal
budget for the next fiscal year, the Mayor and Board of Aldermen shall consider total expenditures” and that’s the only
guidance it gives - “total expenditures”. That’s it and then it goes on to say “the percentage increase etc.” Total
expenditures, that the only language in the Charter that really says what’s in and what’s out. Now that is a very, very
broad term. It includes every check, every appropriation, every bond issue, everything.
So back in the 90’s when this passed, people saw the difficulty of that broad concept and there would be huge
volatility because of capital expenditures and bond issues. So the Board of Aldermen at that time passed interpretive
language. Here’s what it means - this is in and this is out. There were Ordinances that defined what was in and what
was out. For example, the enterprise funds were out but one of those Ordinances said that only half of the
wastewater fund was in and half was out. The Board of Aldermen and the City continued to follow those interpretive
Ordinances and | always considered them myself to be valid. Attorney Bolton did not, but he is the expert. | thought it
was reasonable that the City was interpreting what that broad term meant.
Well then several years back, the wastewater fund was half in and half out, the Board of Aldermen passed an
amendment saying well look the wastewater fund is not tax dollars. It’s a separate - it’s not property taxes so it makes
no sense to have it half in and half out, so we'll put it all out. So they amended the Ordinance to say the wastewater
fund is no longer part of it. That was challenged in court and the Superior Court decided, without the Cities request,
the City never requested to invalidate the cap but the Court on its own volition decided the spending cap is invalid
because it doesn’t contain an override.
Okay. Then the legislature got into the act and over the unanimous objection of the House Delegation at least,
everyone was against it, unanimous opposition. The Legislature adopted an Act which attempted to put the spending
cap back into effect. In doing so, suggested that only the language of the Charter is meaningful. Ordinances cannot
amend, or interpret, or change, or anything else. That all these Ordinances that have been passed in previous years
which resulted in those deductions which you were pointing out. Only the Charter language means anything. So the
Ordinances no longer apply and therefore, we do not have those Interpretive Ordinances anymore. We don’t have the
thing that says “this is in and this is out”. All we have is this simple language in the Charter that says “Total
expenditures should be included”. What Attorney Bolton was saying right at the end is yes you could exclude
enterprise funds, or grants, things like that but the Legislature in its wisdom made it clear that those kinds of
exclusions would have to be in the Charter itself. They can’t be in an Ordinance and they’re not in the Charter. So
the difference is the Legislature changed the landscape and said that, in essence, these interpretive Ordinances that
had been passed and applied resulting in those deductions are no longer applicable. All we’ve got is the language
total expenditures. Mr. Griffin, the CFO, is telling you what total expenditures are. He is applying the strict language
of the Charter.
Now is that is inaccurate, which it could be, if that requires correction please make the correction.
Alderman Sullivan
Around grant funds and building our appropriations off of grant funds, I’ll just ask this in a common sense way. Do
you think counting grant funds, money that we got in 2022 and then spent - | understand that, and included those as
total appropriations to build our spending cap off of, do you think that’s a good decision? Because to bring it back to
