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Council Wants a Second Opinion

By Jeffrey B. Cohen

April 28, 2009

Does Mayor Eddie A. Perez have the authority to spend millions from the city's rainy day fund without the approval of the city council?

City Corporation Counsel John Rose says he does. Some on the city council want a second opinion on this and other budget matters generally. So, on Monday, the council voted to ask its newly-retained attorneys at Day Pitney to give it some legal advice.

"Could it be correct? Sure," said Councilman Matt Ritter, who said all of the lawyers he'd spoken to over the past 48 hours said Rose's opinion needed review. "I want a second opinion."

City staff asked Rose whether the mayor needed council approval to transfer money and make additional appropriations.

In a six-page legal opinion, Rose gave a three-fold answer. The mayor can transfer money within a city department without council approval. He can, with council approval, transfer money between city departments.

And, in an opinion that drew criticism from some on the city council, Rose said the charter does not compel the mayor to seek council approval before making "additional appropriations" from the general fund surplus.

That means he has the unilateral authority to take money from the city's already dwindling savings account and use it how he sees fit.

Minority Leader Larry Deutsch said he thinks such an opinion verges on absolutism.

"It's not a dictatorship, and the reason that we're here is to provide the checks and balances, not just advice," said Deutsch, of the Working Families Party.

Ritter says the biggest reason to have a well-funded "fund balance" is to maintain a good bond rating. Less money in the piggy bank could mean worse bond ratings; worse bond ratings mean higher borrowing costs, Ritter said.

"In theory, the mayor could take all of the money out of there, right?" Ritter said in an interview. "And that would balance the budget. And we'd have no reserve fund."

Ritter said that even if Rose's legal opinion holds, he'd consider a change in the city charter to outlaw this type of mayoral move.

(Cityline apologizes -- technical difficulties prevented the posting of Rose's memo.)