Restrictions on State Aid May Continue

Someone mentioned to me recently that stern conditions on acceptance of FY 2010 extraordinary state aid will elapse at the end of the fiscal year on June 30.

But the last sentence of the Memorandum of Understanding between the city and the director of the state Division of Local Government Services states, "It is finally agreed that the terms of this agreement shall be binding upon the City for any and all subsequent years in which Extraordinary Aid funds are allocated to the City."

For FY 2010, the city sought $3.5 million, but received only $250,000. The aid came with many conditions outlined in the four-page MOU, including 13 personnel requirements and six procedural and operational requirements.

Among the personnel requirements were a hiring freeze on new employees, a salary freeze for all employees not covered by a current contractual agreement, no money for charities or "sunshine fund"activities, a reduction in force through attrition and many more constraints.

Anybody connected with the FY 2011 budget process needs to review the MOU, because unless the city intends to forego applying for and accepting extraordinary state aid, the agreement will continue to impact personnel and operational functions.

Unfortunately, the city is still without a permanent finance director and a chief finance officer to guide the budget process. There has been no CFO, a required statutory position, since the end of 2007. The city received an extension to hire one by July 19. At present, City Administrator Bibi Taylor is also serving informally as acting director of Administration, Finance, Health and Social Services, which has the largest number of divisions among the three departments mandated by the City Charter.

Taylor is thus carrying on the legacy of former City Administrator Marc Dashield, who found himself wearing two hats in two prior budget years. The dual burden contributed to the late passage of those two budgets.

If there is a citizen budget advisory committee this year, each member should get a copy of the MOU as context to budget decision-making. Imposition of these conditions must be weighed against the value of possible extraordinary state aid for FY 2011.

--Bernice Paglia