City Council rejects mayor’s plan for surplus funds

A couple of months ago, Mayor Ruthanne Fuller announced more than $40 million in surplus funds as well as a plan for where she wanted that money to go.

On Monday night, the Newton City Council said, “no.”

The Council rejected a proposal by Fuller to establish an Operations Booster Stabilization Fund to help pay some of the city’s annual pension system appropriation and to put $20.5 million of that surplus—as well as more than $5.5 million from the Appellate Tax Board Interest and Payments Fund—into that new fund.

The vote was 10 in favor and 13 against, with one absence.

The money comes from overlay surplus and settlements with Eversource over back taxes. Fuller said she wanted to create the Operations Booster Stabilization Fund to reduce—for eight years—the city’s annual contribution to the pensions system from 6.6% to 5% and giving the “savings” from the general budget to the schools and to filling the city’s annual projected budget gap.

The Finance Committee voted not to approve the proposal earlier this month. But Councilor David Kalis, who serves on the Finance Committee, motioned on Monday night to change Finance’s report from “denial” to “approval,” and said he supported the plan because it turns one-time funds into operating funds and helps both the city and the schools.

“In the end, what it comes down to is: Do we want to give more money in this fashion to the schools in an operating way—also to the municipal side—or not?” Kalis asked. “And to me, the schools are bedrock for us, and every year that I’ve been a councilor, we’re always asking for more money for the schools.”

Councilor Leonard Gentile, also on the Finance Committee, spoke against Kalis’s amendment to flip that committee’s referral. Gentile said that everyone was on board with wanting to set up a reserve account but disagreed on what kind.

“Where there was a difference of opinion is if we were going to have the reserve fund be a stabilization fund with the explicit restrictive ways that the money can be spent vs. a reserve fund that was just a general reserve fund,” Gentile said.

Establishing a new stabilization account, as well as appropriating money for it, requires a two-thirds majority vote from the City Council. Fuller said in her announcement of the surplus funds that she wanted the money in that kind of account to keep future city councils and school committees from spending it prematurely.

“The problem is that the mayor refused to negotiate,” Gentile said. “The general reserve fund would have provided more flexibility for this administration and for future administrations.”

Basically, both the current mayor and the current City Council are at odds over how to reserve surplus funds because of what future mayors and future city councils may or may not do with it.

Many councilors who opposed the plan did so because they wanted the schools to get more money now and not incrementally, given how much the COVID-19 pandemic set the schools back.

“My first career was as a high school teacher for a dozen years,” Councilor Victoria Danberg said. “I understand what the teachers are facing and how this all works and how important it is that we address this now. Not over the next eight years. Now.”

Councilor Holly Ryan echoed that sentiment and said she’s been speaking with residents about the surplus funds for weeks.

“I’m going to vote no. I want the money now and I want it earmarked in the schools,” Ryan said.

You can watch the entire meeting on the city’s YouTube channel.