“I think we’ll come together and all be semi-happy and only slightly irritated,” McCarthy said of a potential budget deal at the conclusion of the meeting.
The city’s finance department will prepare a new proposed budget Tuesday morning that includes the council’s latest alterations.
McCarthy told the council earlier in the evening that new research from city Corporation Counsel Andrew Koldin had determined that, since the council had failed to pass a budget by the Nov. 1 deadline specified in the city charter, the council no longer had the right to make amendments to the $111 million budget proposal McCarthy sent to the legislative body in September.
The council has passed two budgets since the deadline expired, with McCarthy vetoing both.
McCarthy told the council that he would file an Article 78 legal proceeding in state court against the council as soon as Tuesday in order to enact his 2024 budget.
“With some of the case law that’s out there, I’m more comfortable in taking the position that the council has probably waived its authority or opportunity to make modifications to my budget by not adopting a budget by Nov. 1,” the mayor said during the Monday meeting. “So in fact, my budget stands and would be the operating budget for 2024.”
McCarthy said at the end of the Monday meeting that, if a budget deal falls through, he may still proceed with legal action against the council. The mayor also suggested a ballot referendum could go in front of voters to amend the city charter to lay out the consequences of the council missing a future Nov. 1 budget deadline.
McCarthy told the council that he may direct Schenectady Commissioner of Finance & Administration Anthony Ferrari to file legal proceedings against the council in state Supreme Court.
McCarthy said the legal action could provide clarity on the repercussions of the City Council not passing a budget by the city’s Nov. 1 deadline in the future.
“I want to still do it in a friendly way so that we end up with a product that is there, but that may clear up any ambiguity or unknown that has been there that, if the council doesn’t take an affirmative action, that there are consequences,” McCarthy said during the meeting. “There are things that you have to do. The statute says something is supposed to happen by a certain day and it didn’t.”
McCarthy said that, since Koldin represents both the council and the mayor, he would secure outside legal counsel if he moves forward with a suit against the council, with Council President Marion Porterfield saying on Monday night that the council would do the same.
Porterfield asked McCarthy during the meeting if he was willing to continue budget discussions.
“At this point in time, you’re not willing to entertain anything else from the council?” she asked the mayor earlier in the meeting.
McCarthy replied that pursuing legal action now could provide clarification for future city officials on the matter of a council failing to meet the city’s Nov. 1 budget deadline.
“The [budget] options that are being presented I feel hinder my ability to manage the city going forward,” McCarthy said during Monday’s meeting.
Councilman Damonni Farley said during the meeting that he believed that he was making progress with McCarthy in budget negotiations and encouraged the mayor to continue negotiations with the council.
“This would bring a clear closure to it, as opposed to negotiating something that may still be subject to additional review,” McCarthy said of the prospective legal action. “Somebody else will be mayor and people will be on the City Council and they’ll know they have to adopt a budget by Nov. 1.”
In the wake of McCarthy’s second budget veto, the City Council was operating under the belief that the city must have a 2024 budget in place by Dec. 31.
In a letter to Koldin sent on Saturday, McCarthy asked Koldin to lay out to the council the ramifications of the city potentially missing the Dec. 31 deadline.
The city charter does not spell out the consequences or next steps if the city does not have a budget passed by the City Council and signed by the mayor at the end of a given year.
“Please provide the City Council advice and impact on their not adopting the 2024 Operating Budget in the statutory required manner,” McCarthy wrote.
Koldin did not respond to requests for comment on Monday.
The council will be required to hold a veto override vote at its next full meeting, which could take place at the council’s special budget meeting on Thursday.
A five-vote supermajority is required for the council to override McCarthy’s Dec. 13 veto, with the council’s previous effort to overturn the mayor’s first budget veto falling short on Dec. 7, with Porterfield and Council Members Farley, John Mootooveren and Carl Williams voting to override the veto and Council Members Doreen Ditoro, Carmel Patrick and John Polimeni voting to sustain the veto.
The council subsequently passed a second $109 million budget that utilized an additional $1.7 million in American Rescue Plan Act (ARPA) funding in the city’s waste department instead of using reserve funding.
McCarthy vetoed the council’s second budget on
Dec. 13, noting that he believed the ARPA allocation for the waste fund “is a poor use of this revenue that I cannot support.”
The council passed its first $109 million budget on
Nov. 20, nearly three weeks after the Nov. 1 budget deadline.
A spokesperson for New York State Comptroller Tom DiNapoli said on Friday that the state has not provided guidance to Schenectady on the upcoming budget and that it is up to the city attorney to provide legal advice to city officials regarding the charter.
The mayor’s proposed 2024 budget included a $16.26 increase in yearly water fees and a $74.20 per year increase in sewer fees for city residents, with the council halving those proposed fee increases in both budgets it approved.
The council approved a $6.50 per year increase for water fees and a $12.60 boost for sewer fees in the 2023 budget, half of McCarthy’s original proposal.
In his letter to Koldin, McCarthy contended that the council is required by city code to provide funding on an annual basis for water department projects it previously approved.
“The charter is clear, the council shall make funds available for paying the cost and expense of such work,” McCarthy wrote. “I do not believe they have the authority to change the water rents that I’m proposing. Any question of cost or financing should have been made when the initial plans were submitted to the city council or when contracts for the work were awarded, not when the work has been completed and the bills need to be paid.”
Porterfield said on Monday that she disagrees with the mayor’s assertion, citing Section C2-8 of the city charter pertaining to the Extension or Improvement of Waterworks System that states that “the Director of the Department of Water and Wastewater, with the assent of the City Council, shall establish a scale of annual rents to be charged and paid annually for the supply of water.”
