City bond rating dropped as police union alleges violation

 

As the City of Poughkeepsie faces a potentially costly complaint by the city police union, it encountered another hurdle Monday in its uphill battle to get out of debt.

Moody’s Investment Services said in a news release it has downgraded the city’s bond service rating. Poughkeepsie’s $55 million in outstanding general obligation debt, negative fund balance and “narrow” cash flow have caused its bond rating to drop to Ba1 — the second to lowest rating in the investor’s scale.

Meanwhile, an improper practice charge filed by Poughkeepsie’s Police Benevolent Association alleges the City of Poughkeepsie’s former administration’s failure to budget for a potential agreement reached on the city police contract violated Civil Service Law.

The charge filed with the state Public Employment Relations Board in late January claims that former city Mayor John Tkazyik had signed a memorandum agreement based on state mediators’ review of the proposed contract in September last year — which was to cover city police employment from Jan. 1, 2012 through Dec. 31, 2016 — but failed to include the money necessary to cover the agreement in the budget he proposed in October. It continues that Tkazyik did not support the agreement for ratification by the city Common Council, alleging that this constitutes a refusal to bargain — a violation of the Civil Service Law.

Tkazyik declined to comment Monday due to pending litigation against the city. Tkazyik now works as deputy commissioner of General Services for Orange County by County Executive Steven Neuhaus.

Former city Administrator Milo Bunyi, who is noted as an active member of the city’s negotiating team, also was alleged to have failed to support the agreement, and documents claim his actions in opposition to the memorandum agreement violate Civil Service Law. Bunyi could not be reached for comment Monday.

A majority of City Common Council members ultimately abstained from voting on the contract late last year after City Administrator Milo Bunyi informed them that the tax levy would double if the contract was approved due to an estimated $1.5 million cost. The agreement outlined retroactive increases all payable in 2016 as well as some increases to clothing allowance and sick leave. The city police department has been without a contract for going on five years.

The charge states that before the council could vote on ratifying the agreement, Bunyi requested to meet council members in executive session, where he “urged the Common Council to reject the (memorandum of agreement) because the terms and conditions of employment contained within were too costly to the city in his opinion.” Tkazyik was present for “certain parts” of the meeting that day, but left without speaking about the agreement reached, documents state.

Solfaro said if the city is found in violation as the charge filed alleges the memorandum agreement may be imposed, however if the city and police union come to an agreement on the contract, the charge could be dissolved.

“At this time, there is no discussion regarding a broad-based settlement,” he said. “It doesn’t mean there can’t be.”

Poughkeepsie Mayor Rob Rolison said that if the state Public Employment Relations Board ruled in favor of the city police union, the city would be responsible for payment as stipulated by the contract.

“The monetary settlement for this based on the contract would be around $1 million, which we don’t have,” Rolison said, adding that the city hasn’t resumed talks with the police union. “I’m at a bit of a loss how they could reach an agreement on something that they didn’t budget for. You can’t agree to something and not do what you agreed to, especially since it’s somewhat binding.”

The next step will be a conference at the state Public Employment Relations Board in April in Albany.

As for Moody’s’ announcement, Rolison said that he is aware of the rating and the city is working with the New York State Financial Restructuring Board and New York State Comptroller as they make recommendations to help restore the city to fiscal stability.

“While Moody’s has downgraded our bond rating based on previous year’s performance, I remain optimistic that we can change this downward direction and improve our future bond rating,” Rolison said in an email. “While I wish this news could be different, I do appreciate Moody’s recognition of the city’s new leadership team as potential for positive change.”

Amanda Fries: afries@poughkeepsiejournal.com, 845-437-4824; Twitter: @mandy_fries

http://www.poughkeepsiejournal.com/story/news/2016/02/29/city-bond-rating-dropped-police-union-alleges-violation/81122846/