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Friday, November 07, 2014

Did NorCo Council Just Approve Executive Brown's Budget by Rejecting It?

Phil Lauer and Lamont McClure
By a 7-1 vote, Northampton County Council last night rejected Executive John Brown's $334 million spending plan next year. But in the upside down world of County budgets, they may have unwittingly approved it. Let me explain.

$20 Million Line of Credit Makes Budget Illegal

Their action followed a determination by their Solicitor, Phil Lauer, that the Budget violates the Home Rule Charter requirement of a balanced budget. Brown had proposed balancing a budget with a $20 million line of credit, but the Home Rule Charter also prohibits using borrowed money for operational expenses in the absence of an emergency. Lauer also advised that the absence of details concerning the interest rate and terms of repayment may be contrary to the Administrative Code.

"I happen to disagree," responded Executive Brown, based on previous county practice. He noted that the County borrowed money in 2005 for open space, and that a bond refinance in 2012 included money that went to the general fund. But he agreed to amend the budget to remove the line of credit and instead use money from the general fund.

McClure Argues Brand New Budget Needed

This solution was unsatisfactory to Lamont McClure, who claimed that Council was tied into a "procedural knot." He noted that the Home Rule Charter contains no provisions under which the Executive can amend his budget. It also bars Council from revising revenue projections. So he argued that a new budget should be advertised and forwarded to every municipality in the County. Peg Ferraro asked Brown if he could do that in time for adoption in December, and he shrugged.

"This is part of the problem," said McClure. "We don't get to make up the rules as we go along. ... We can't just wave a magic wand."

Even Phil Lauer balked at McClure's proposal, noting it would be difficult to have a brand new budget ready in December. Peg Ferraro echoed a concern over time constraints.

"I don't think you ignore the law because there's time constraints," retorted McClure. "There's been too much ignoring the law around here."

Can the Executive revise revenue projections?

In previous budgets, Executives have often revised revenue projections, a point that Peg Ferraro made. "It's not something that hasn't been done," she observed. "We just need a revised revenue amendment."

While the Home Rule Charter has no express provision authorizing the Executive to amend his own spending plan, it fails to expressly ban it. Council, however, is barred from interfering with the Executive's revenue projections, and thus has no authority to remove the $20 million line of credit from the budget on its own motion, even if it is deemed illegal.

Do you really need to re-advertise?

In addition to the question whether an Executive can amend his own Budget, McClure expressed concern that the public has been misled that the Budget includes borrowed money, and believes the only way to cure that problem is with a new budget.

Seth Vaughn, in his eleventh month on Council, agreed that it "would in a sense be deceptive to the electorate." He believes that a brand new budget would protect the County from "potential litigation." In reality, Council has the authority to amend any ordinance after a public hearing, with no further need to advertise the matter.

Benol Claims McClure is Playing Politics

Mat Benol called McClure's proposal nothing more than an attempt "to throw more slings and arrows at the executive. Nothing is being hidden. All the meetings are recorded. Everything is out there."

"I take umbrage at your saying this is a political mudslinging deal," Ken Kraft told Benol. "That's just nonsense. ... It's helping the process along"

Peg Ferraro, a veteran of many Councils who knows that Executives routinely adjust their revenue projections, was the sole No vote. Glenn Geissinger was absent.  

Did Council Just Enact the Very Budget They Rejected?

This was a dangerous move.

Under Northampton County's Home Rule Charter, the Executive's Budget goes into effect if Council fails to approve or amend it by December 16. Even if council votes to reject the Budget, it is deemed adopted. Executive Brown, who has been at odds with Council, could simply do nothing and the Budget he's already proposed, legal or not, will be deemed approved on December 16.

The Home Rule Charter may actually prohibit him from submitting a new plan at this time, even if he wanted to do so,  He is required to submit his budget no later than 75 days before the next fiscal year, and that time has already passed.

So by rejecting the Budget last night, County Council may have unwittingly approved it.


Anonymous said...

Good analysis. I believe Lauer covered these points and consequences in the meeting last night - but didn't do out of his way to emphasize that Brown could intentionally not file a new one.

Bernie O'Hare said...

It could be intentional or he could say that the HRC prevents a new budget and they just passed the one he presented. He could say he is bound by the strict language of the charter, which requires that the budget be presented no later than 75 days before the end of the fiscal year. Then he could take some of McClure's quotes about following the law and shove them up his ass.

The more I think about this, the more I realize that what happened is very foolish. You had an exec who was perfectly willing to revise his revenue estimates and remove the LOC.

McClure was absolutely right to bring up the LOC and has been right on many other issues. But he over reaches, and this is Exhibit A.

Bernie O'Hare said...

The only way around it then would be to seek an emergency declaration in court that he budget is actually a nullity. I don't know if you could get such a ruling.

Anonymous said...

Politics is the only game McClure plays and he is shitty at it. As shitty as he is in his elections. The budget is a done deal. the executive can just rework revenues like past executi8ve shave done. Move the fiscal beans around and leave it at that.

He is then done. County Council has voted no. So by mid December the Executives budget goes into effect.

As on so many issues, McClure can tell his fan base of employees he helped them by talking a lot and really accomplishing nothing.

The guy is a fraud and hopefully will be tossed next year in elections. Same with Barron VonFootinmouth.

Frankly, he and Kraft are two of the biggest political game players up there. Shameful.

Anonymous said...

The amateur hour continues. The inability to use the LOC is obvious and should never been included in the budget presented. Where is Brown's solicitor in all this? Still reading the HRC for the first time? This crew is a total joke.

Anonymous said...

This is really, really funny.

but only because i live in Lehigh County

Anonymous said...

much ado about nothing.

The administration frequently offers amended ordinances for council's consideration.

they merely need to do so here.

Anonymous said...

It was like watching the Three Stoogeswhen council asked how long it would take to submit a new budget! The kept looking at each other, then I heard one of them say "Doran" and council moved on.

Anonymous said...

How many times has John brown broken the law?

I mean just this year, not in Bangor or elsewhere.

Anonymous said...

Ready, Fire! Aim!

This was another dumb move like the St. Luke's fiasco. Now Brown can do nothing and his budget goes into effect with no amendments and no farmland preservation funding. The sensible thing to do was wait until December to see what was in the fund balance and let the executive amend the revenue estimates or raise taxes. What will it cost to re-advertise a new budget? Hopefully someone will wake up, realize what they did, and make a motion to reconsider.

Anonymous said...

Brown created this nightmare by submitting a budget with an illegal revenue source. The boob continues to stumble and this time his blunder has real consequences. I was really surprised no one on council berated him for proposing an LOC without properly vetting it. They seemed perfectly at ease with the morass they were in. Amateur Hour indeed!

Anonymous said...

Would not there be incentive for Brown to file a new budget that includes the shift of $20m that he said he was going to do, so as not to be responsible for a budget that relies on an illegal instrument? Rather than leaving the current one on place? Could he really be that hard headed a politician, who doesn't do the right thing?

IMO, rejecting the current budget was more the right thing to do than grandstanding, but I'd admit it may include both. The HRC doesn't provide for the exec to amend the budget as has been discussed was done in the past.

Anonymous said...

The HRC doesn't provide for the exec to amend the budget as has been discussed was done in the past.

It does not forbid it either. What if additional state or federal grant monies become available after the budget is submitted to Council? It would be foolish not to allow the executive to include this additional revenue as part of the budget for the upcoming year. BTW I agree that the LOC was foolish and illegal but Council may have made the problem worse.

Bernie O'Hare said...

9:32, the Exec's budget must be presented no later than 75 days before the end of the year, that is, by Oct 16. It is too late, under the HRC, for him to submit a new one. He cannot do so without running afoul of the laws McClure says he needs to follow.

McClure screwed up last night. He over reaches and that is his weakness. He has been right in many of his disputes, but you have to be very careful when dealing with the budget.

Anonymous said...

John Stoffa agreed with McClure last night. he told him personally after the meeting "I usually do not agree with you, but I do on this one. Good Job"

Do you think that a new budget is forthcoming or do you really think John Brown will let this one (Illegal or not) become Law?

Bernie O'Hare said...

8:01, not sure they can reconsider a budget vote. Probably. But they need to do more research and less talking. There are people like Peg, who know what they are doing. Yes, she is pro-Brown, but has a lot of institutional knowledge.

Bernie O'Hare said...

10:55, without question, McClure has been a powerful voice for the workers and for following the Charter. But he over-reaches. He did that last night. The Exec is without power to present a "brand new budget" without violating the HRC. The budget Brown submitted is, in my opinion, illegal. But submitting a new budget within 75 days of the end of the year is also illegal. The remedy would be to let the Exec amend the budget. He had told Council he would do that. It is not expressly barred by the HRC. It is routinely done. But Council chose to reject the budget without amending it, and they have no power to remove the $20 million line of credit. So that rejected budget may very well become the approved budget unless Council rescinds its vote or goes to court for an emergency declaratory judgment to excise the illegality. Even there, they may have lost the power to amend.

Anonymous said...

What the Hell is John Stoffa doing at the meting> Can't he just go away. The guy spent all the cash reserves and HE will sit in judgment?

The guy has an ego as big as Angle. No wonder they are buds.

Anonymous said...

Stoffa has the right to go to any public meeting he wants to just like you idiot,

Anonymous said...

Do you think Council would be this rudderless if Angle were still on Council?

Anonymous said...

Oh the pathos! Where was this great concerned county council when Stoffa spent down all the surplus. Oh that's right, Ron Angle was in charge then.

Where was the outrage on the drunken sailor spending down of the cash reserves? Where was the outrage on letting the swaption balloon to over thirty million dollars when he could have refinanced or payed it at under ten million?. Where was the county council when we decided to buy and lease more big buildings? Where was council and the employees when the massive new human services building lease was implemented funneling program and salary money to the developer and consultants? No it pays for itself..haha. fools.

So now we have John
Brown and the new Republican County Council trying to undo years of runaway spending and lack of management. Now you all bitch. Where were you in the past. Oh that right as long as you got your fat contracts and new buildings. You just sat there as happy as pigs in crap. Did you ever think that it all had to be paid for?

Now for the apologists and revisionists.

Anonymous said...

Council was there. Where were you? You should have been there to dave us all. Don't blame the employees.

Anonymous said...

"The height of audacity in serving up pure nonsense, in stringing together senseless and extravagant mazes of words, such as had previously only been known in madhouses, was finally reached in Hegel (John Brown), and became the instrument of the most barefaced general mystification that has ever taken place, with a result which will appear fabulous to posterity, and will remain as a monument to German (Northampton County) stupidity."

Anonymous said...

The fact that she supports John Brown does not show good judgement.

Anonymous said...

If you took a poll, even the most unsophisticated would laugh at the idea that you can balance a county budget on an LOC.

They would raise their eyebrows at the "revised revenue" concept----

When or will this administration take this job seriously? Will Phil Lauer have to do the legal work for council and the administration for the rest of Brown's term or will we ever hear --or God forbid--see-- a legal opinion from Brown's team justifying Brown's antics: anything from sketchy to idiotic to grandiose narcissism.
(as in, why do you get to hack away at paychecks and quadruple the workload while you get someone to make sure your makeup looks good in front of the camera---btw--defer to, not from)