Published DateLACONIA — Addressing the controversy between the Belknap County Convention and the Belknap County Commission over the 2013 county budget, Commissioner Ed Philpot, said last night that although the convention has asserted its authority to adjust particular line items throughout the budget, the commission has received a legal opinion to the contrary.
Philpot, the lone Democrat among the three commissioners, was speaking to local Democrats, assembled at the Police Department's Community Room, concerned that the convention, where Republicans hold 13 of the 18 seats, seeks to reduce the budget recommended by the commission by $1.3-million. He was joined by three of the five Democratic members of the convention — Representatives David Huot and Beth Arsenault of Laconia and Lisa DiMartino of Gilford.
Philpot also revealed that the commission anticipated Moody's Investment Services would downgrade the county's credit rating, which is currently AA+ with a negative outlook.
Huot was quick to point out that the credit rating was only one factor bearing on the interest rate on county borrowings, which ultimately would be set by the capital markets.
With the commission considering the construction of a community corrections facility to replaced the aged county jail, the credit rating has has drawn attention. But, both Philpot and Huot emphasized that the process of designing and constructing a facility has just begun and the county would not be selling general obligation bonds to finance the project for some time, when market conditions will have changed significantly.
At the outset of the budget process, the convention, by a vote of 10 to 8, stripped the commission of much of its authority over the management of the budget, particularly its power to transfer funds from line-to-line within the plan, while claiming that authority to itself.
On the strength of that decision, members proceeded to vote for revenue adjustments and spending cuts totaling some $745,000, which included some $197,000 in increased revenues. The centerpiece of the package was adjustments to compensation and benefits of some $372,000. These included the elimination of a 3-percent step raise along with bonuses for longevity and unused sick days. At the same time, the new numbers assumes employees would bear the entire 7.3-percent increase in the cost of health insurance premiums.
Meanwhile, when the commission discovered that state law delineating the respective powers of the convention and the commission is unsettled, it sought a legal opinion from the firm of Donahue, Tucker and Ciandella of Exeter.
Philpot explained the position taken by the convention then said "indeed that is not case, which will be born out by a legal opinion." He declined to elaborate on the opinion, which he said was protected by attorney-client privilege, but added that he expected the commission would vote to release it in the near future.
In light of the opinion, Philpot said that the convention had no authority to adjust salaries and benefits. "That is beyond the scope of their authority." However, with the next breath he remarked "there is nothing to be gained by having a struggle over line-item authority."
While DiMartino said she was "concerned" by the Republican majority's approach to the budget, Philpot said "apoplectic is the word I would use." He noted that the commission proposed spending $700,000 less in 2013 than was appropriated in 2012 and the increase in amount to be raised by taxes of 8.9-percent was the first increase in five years.
"They are unwinding the progress we've made over the past five years," Philpot said. "The convention has always been respectful of the commissioner's job to run the county. That is not the case now." He commented that members of the convention are especially antagonistic and suspicious of the county administration while explaining that by consolidating administrative functions like human resources and financial management, the commission had reduced payroll expenses by $350,000.
Huot said that the increase in amount to be raised by property taxes was the result of diminished revenues from other sources together with the commission's to apply $1,650,000 less from fund balance to offset property taxes. "Expenditures are decreasing," he said.
Huot agreed that "the convention doesn't trust the commission" and suggested that "the crisis is not about money, but about power." He noted that members of the convention are elected to legislate for the state, not manage the county. "The county is a small part of their responsibilities," he said, adding that their primary responsibility is oversight. "If the money isn't going out the back door, they ought to go on to something else," he remarked. "The sub-committees that reviewed the budget have not found anything wrong with the operation of county government."
To change the course of the budget process and restore all or part of the commission's budget, the five Democrats would need at least four Republican allies to force a stalemate, which would ensure the adoption of the commission's budget by default.
The convention next takes up the 2013 budget when it meets on Tuesday, Feb. 19.