NORTH ADAMS, Mass. — The City Council on Tuesday night approved a $1.18 million reduction in the city budget to be offset by use of the land-sale account.

The transfer will balance this year's budget but Mayor Richard Alcombright warned there were "serious decisions" to be made for next fiscal year because the city has a $1.2 million structural deficit that will be exacerbated by possible state cuts of up to 12 percent.

"It's going to mean ugly, painful cuts for next year," said the mayor. "In the best case scenario, we're hearing 5 percent cuts in state aid next year; reality is, a couple of candidates in the election this year were talking about 8 to 12 percent."

The city had requested special legislation earlier this year to allow it to take nearly $900,000 from the land-sale reserves (most from the sale of watershed lands in Vermont) to pay off the Medical Insurance Trust debt to balance the budget. North Adams has been struggling with a budget deficit caused by declining revenues and state aid; much of the city's free cash has been used over the past few years to staunch the bleeding from the loss of education and municipal aid.

"Three years ago you had close to $4 million in reserves and the last two fiscal years particularly, about $2.8 million of that was used to reduce the budget and to balance the budget," Alcombright told councilors. The mayor had asked to use the watershed money to limit dependence on the disappearing free cash. He said about $45,000 to $50,000 was left in the land-sale account. "The increase in taxes, water and sewer was necessary to balance the budget along with the use of the land-sale account."

Frequent commenter Robert Cardimino said he hadn't heard of the legislation and wanted to know why taxes were raised if the city had $1 million to spend. Alcombright countered that the council and the Finance Committee had discussed the use of the land-sale account numerous times and that it had been part of his Power Point presentation to citizens in May.

"All this was done months ago," he said. "All I'm asking for now is we go through the formality of moving this $1.2 million so we can set our tax rate in two weeks."

The mayor asked the Finance Committee to meet Monday, Nov. 22, at 5 p.m. at City Hall to review the tax rates being proposed. Committee Chairman Michael Bloom asked how the city looked going into the next fiscal year.

"There is no crutch to fall back on; there is no million dollars to pull out," he said.

Alcombright said it would be tough because the city had already raised fees and is taxing to its levy limit. In addition to state candidates, the Massachusetts Taxpayers Foundation and the Massachusetts Municipal Association were forecasting cuts of at least 8 to 10 percent across the board.

"A 10 percent cut on our general aid and school aid would be about $1.4 million," said Alcombright. "That coupled with a $1.2 million deficit ... do the math."

He suggested the Finance Committee begin meeting almost immediately after the tax rate is set to begin reviewing next year's budget. On the plus side, he expected the city to get back $400,000 to $500,000 this year from Blue Cross Blue Shield; if those numbers continue, it could mean the city reducing its debt obligation regarding the Medical Insurance Trust fund in two or three years, less than half the time allowed. 

The council passed the reduction unanimously by voice vote, although Councilor Marie Harpin questioned whether the mayor could confirm the home-rule petition allowing the account's use had been passed.

"I think when we do these home-rule petitions, that we should have something," said Councilor Marie Harpin. "We should really have something in front of us knowing it's approved."

"We've done other home-rule petitions and I've never seen the administration send it out to councilors to review," said Bloom. "I trust the mayor's word."

Council President Ronald Boucher asked if the mayor would provide copies of the final legislation from now on and Alcombright agreed.

In other business, the council postponed an ordinance change that increases the permit fee for waste haulers from $85 to $100 annually for each vehicle. Health Inspector Manuel Serrano told the council that the permit applies to any commercial hauler who transports waste through the city, whether they use the city landfill or not.

However, the language in the ordinance continued to contribute to confusion last meeting about the amendment because it referred to a "commercial business" to be permitted at $85 and additional vehicles as costing $45. Serrano said the Board of Health's intent was to charge $100 per vehicle and that most haulers used one truck; larger ventures, such as Allied Waste, permitted only those trucks that would enter the city. The ordinance will be taken up again in the first meeting in December with appropriate language changes.

The mayor said he will be interviewing six or seven candidates for city assessor; one is from Southern Vermont and the rest from Northern Berkshire. He also said most of the road and bridge work will be completed this fall, with the exception of the Hadley Overpass, where repairs below the deck will continue.