The last-minute postponement of a scheduled vote on Portland’s municipal budget this week could have put the city in a more precarious financial situation.

That possibility was raised last week by the city’s Finance Department, which on Friday sent a memo to councilors that outlined mostly negative tax, cash flow and operational consequences of delaying a vote on the $221 million budget in hopes that the state funding picture would become clearer.

Portland Mayor Michael Brennan said Wednesday that the recommendation to delay the vote on the budget for the next fiscal year came from city's staff.

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“The negative implications become more severe each week the budget is not approved,” the May 15 memo states.

Many councilors were caught off guard Monday when the city’s communications director issued a statement saying that the council had “decided” to postpone the budget vote and hearing. The release, sent at 3:35 p.m., stated that “the council has decided to postpone given the number of uncertainties around impacts from the state’s budget.” The council meeting did not begin until 7 p.m.

When councilors arrived, some publicly accused Mayor Michael Brennan of orchestrating the postponement without their knowledge, and voted to proceed with the scheduled public hearing for the relatively small number of residents who had come to speak despite the announcement. Brennan voted against it.

The council rescheduled a full public hearing and council budget vote for June 1.

Brennan threw up his hands when he was asked by councilors how a statement was issued in their names before they had voted. He later explained that he had called several councilors to gauge support for the delay.

Brennan said Wednesday that the recommendation to delay the vote came from city staff. He referred a reporter to Michael Sauschuck, the city’s police chief, who became acting city manager May 8.

“It’s a dynamic and fluid discussion in Augusta,” Brennan said.

Sauschuck did not return several requests for comment.

Brennan said he had been contacted by “several” councilors before the meeting who wanted to delay the budget vote. He declined to say how many councilors or which ones. The mayor also downplayed the importance of the finance staff memo in the council’s deliberations. He declined to describe what other factors, besides the uncertainty of the state budget, played into the decision to postpone.

“There’s no way I’m ever going to tell you what councilors I talk to in terms of different issues with the city,” Brennan said.

He said he reached out to councilors to gauge their support, but Councilor Edward Suslovic said Tuesday that Brennan didn’t contact him until after the statement was issued. He pushed back against the notion that the delay was a staff recommendation.

“It’s clear the mayor was driving this change,” said Suslovic, who described Monday’s meeting as one of the worst he has participated in.

Suslovic insisted that sending out a news release roughly four hours before the meeting, announcing that the council had decided to delay the vote, did not force the council’s hand. But he also said he “begrudgingly” voted to postpone the budget vote since the city had already issued the release.

The city is embroiled in legal and budget battles with the LePage administration. It is fighting the governor’s effort – both in court and before the Legislature – to prohibit asylum seekers from receiving state General Assistance funds. The issue could cost the city a total of $5 million in the current and 2016 fiscal year budgets, assuming the city continues to pay for the aid.

The two sides also are at odds over funding for the city’s emergency homeless shelter. In February, the state informed the city it would cease a 30-year practice of paying for the shelter’s $2 million operating costs, prompting the outgoing acting city manager to recommend closing an overflow emergency shelter.

The outgoing manager also recommended no longer providing aid to asylum seekers until the issue was resolved either in court or by the Legislature.

Both recommendations are in the proposed budget for the fiscal year that begins July 1.

The council had discussed a possible postponement of the budget vote during a workshop meeting May 11, but most councilors seemed to agree with city staff that there was little to be gained by waiting.

That point was reinforced in the Finance Department memo, which was provided at the request of the Portland Press Herald.

The memo points out that the legal battle over GA to asylum seekers would likely be decided on appeal, well after the city budget is adopted. Staff also cautioned that there was only “a small chance” that the state budget would be finalized before June 15, well after the city’s newly scheduled vote June 1.

Postponement of the budget decision would carry more negative effects than positive ones, according to the staff memo.

Finance staff noted that changes to the city’s emergency shelter program are being made in response to an audit by the state Department of Health and Human Services. The state budget would not change the audit findings, staff said.

However, Brennan bolstered the case for delaying by noting a legislative panel’s endorsement Tuesday of a bill that would allocate $2 million in funding to Maine’s 40-plus homeless shelters. That proposal faces key tests in the full Legislature and it’s unclear whether Gov. Paul LePage would support it.

Putting off the budget decision also could delay the issuance of property tax bills to residents, which could delay tax payments, finance staff said.

“If city taxes are not levied in a timely fashion, the city could encounter cash flow issues,” the memo states. “Any significant delay in budget approvals would increase the likelihood of potential cash flow problems due to a lack of revenue being received in a timely fashion.”

According to the memo, a budget delay also would maintain a hiring freeze that has been in place since November; delay the closing of the current budget year ending June 30; and continue to erode employee morale. The dozen or so people who would be laid off as a result of the proposed budget will remain in limbo.

“An approved budget would give confidence to city staff that the City Council is willing to make some of the key changes which are required to keep the city moving in the right direction,” the memo states.

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