City councilors are upset that the city used money from the sale of two buildings to pay off city debt without first seeking council approval.
On Monday night, the Westbrook City Council authorized the use of $542,000 from the sales of the former police station and the Forest Street School. The money went to pay debt incurred from downtown development.
The vote on Monday brought to light an accounting transaction that took place, but was never approved by the council. At the meeting, councilors expressed their disappointment at what happened while the administration apologized for the oversight.
The debt in question originates from lower than expected returns from downtown development, the city administration said.
When the city made several improvements with an eye on attracting business downtown, plans called for the increased revenues from that development to help pay the loan as well as increased costs over original estimates for the construction, according to the administration. The development included the municipal parking garage, the reconstruction of William Clarke Drive, improvements to power downtown and the installation of Internet lines downtown.
“The problems arose from borrowing the money based on projections of revenue increases, which didn’t happen,” said City Administrator Jerre Bryant.
The city will use $342,000 from the sale of the former police station to pay for the debt incurred between 2003 and the middle of 2005. This is a one-time payment that would not need to be repeated because the city took the shortfall into account in its last two budgets. Bryant said the shortfall would decrease with tax money gained from new development downtown each year.
The city will use $200,000 from the sale of the Forest Street School to pay for the Riverwalk boardwalk project. Originally, the city planned to pay for that project with money from the sale of property along the walk, including Saccarappa Park, but as of June 2005, the city was short $200,000.
Last June, the administration presented a proposal to the council’s finance committee to use the money from the sale of the two buildings to pay the debt. The committee referred the item to the full council. However, the council never voted on the proposal, although the actual accounting transfer took place. Money never actually came out of city accounts to pay for the debt, but it was transferred in the city books.
On Monday, councilors said they were concerned that the money was transferred without approval from the council.
“It’s very troubling and disturbing to me that this could have happened, given the magnitude of the amount of money, given the pain that this committee went through with regard to the sale of the police station,” said Councilor Drew Gattine. “There was a debt that needed to be paid, but it’s the council’s decision by majority vote how that debt is paid.”
Council President Brendan Rielly said his main concern is that the council is spending the taxpayers’ money in public for everyone in Westbrook to see, however this transaction took place outside of the public’s eye.
Councilor John O’Hara acknowledged the mistake as just a mistake and asked that the council and administration move on.
“The failure for this item to appear on a City Council agenda was an inadvertent oversight and, as city administrator, I accept full responsibility for that omission,” said Bryant in a report to the council.
Bryant said the money needed to be paid, so from a financial standpoint, the impact was no different today than a year ago.
Both Gattine and Rielly also expressed concern that they had not received information on this item in a timely fashion. Gattine said he asked about the money a month ago, but was just finding out on Friday. Rielly said he felt as if the council wasn’t getting information each week from the administration with enough time for proper review before each meeting.
In other news, the council gave preliminary approval to a proposal to give Westbrook police powers to make arrests outside the city and Cumberland County. According to Bryant, the department used to have the power through the county. That power was taken away several years ago because the county didn’t want to have liability for city police acting outside the county’s control, he said.
New state legislation has made it possible for cities to give these powers if the governing body approves it. The council will vote for final approval on it at its next meeting.
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