Mayor Ann Thane sat before the Amsterdam Common Council Wednesday night to explain her designated lines in the proposed 2014-15 city budget.
Instead of debating her line items, 3rd Ward Alderman Ronald J. Barone Sr. argued with Thane about a proposed 3 percent increase in water rates.
"We're doing it wrong," Barone said. "I'm on this council now and I think it's wrong."
The city has used water fees to balance its general fund. City Controller Matthew Agresta says it's necessary to transfer money from the water fund to the general fund to alleviate the burden placed on the general fund.
Barone said when he served on the now-defunct Montgomery County Board of Supervisors , they used the fund balance to balance the budget.
"We had a $21.1 million fund balance," Barone said. "And we depleted it."
Agresta said that was a "terrible move."
Thane said it's important not to touch the fund balance because it affects credit and it will run dry if it is depended upon. She said relying on the fund balance to balance the budget is "foolish."
The 3 percent increase amounts to about $10 more a year per residential unit, Agresta said.
Last fiscal year, the city collected $2.8 million from residential, or flat water units, but this year, the mayor has budgeted for a total revenue from that source of $3 million.
From metered users, or commercial units, the city collected $1 million last year, and $1.2 million is budgeted this year.
The town of Amsterdam did not previously have a line item in the budget, but the city is expecting to collect $630,000 this upcoming year.
Last year, the city collected $480,000 from the town of Florida and expects to collect $530,000 this year.
Fourth Ward Alderwoman Diane Hatzenbuhler said she has received notices from the Gentle Touch Auto Wash on East Main Street and a local laundromat regarding their concern about the increased water rates.
Hatzenbuhler said the council reserves the right to pass a resolution reducing specific water rates, and that may be something to consider.
"You'll be opening Pandora's box," Thane said, advising against that decision.
Agresta shook his head, agreeing with Thane.
"Once we get to the point where we do know where the fund balance is," Agresta said, "every year that that number goes down, it's worse and worse for us."
Thane said they have stayed under the self-imposed 3 percent tax cap and she believes it's a sound budget.
"We utilize the one resource we have, and spread it over a great amount of people, instead of having only city residents pay in property taxes," Thane said.
The town of Florida and the town of Amsterdam pay water fees to the city of Amsterdam.
"What I'm seeing is expansion," Thane said. "I'm looking at the facts and you, [Barone,] are telling fairy tales."