Public Safety Commissioner E. John Morocco explains why the public safety salaries are running above budget.
NORTH ADAMS, Mass. — The city is running a deficit in several of its line items — including police and fire — because of unexpected costs.
Four accounts are significantly over budget or close to being emptied. Police and fire have accounts that have expended more than 80 percent of their balances because of overtime; the snow and ice account is more than $84,000 in the red and the veterans account is expected to be $170,000 over.
The update was the first of what Mayor Richard Alcombright said will be regular budget control reports to the Finance Committee.
"We were budgeting for the exact dollar salary ... we kept the budget accurate and projected overtime but we didn't project for four [officers] to go to the academy and we didn't project for five firefighters on long-term disability," the mayor told the committee on Tuesday. "That's something to keep in mind as we begin budgeting for next year."
Public Safety Commissioner E. John Morocco said the department paid extra officer salaries for about 48 weeks to cover four officers at the academy plus two long-term disabilities on the force. Morocco said it was unusual for four officers to attend the academy in one year. It was caused by the number of retirements and departures and the fact the state scheduled the academies back to back. Another officer has retired as of March 1 and that means his replacement will attend the next academy.
Morocco did note that some revenues, such as the $15,000 reimbursed by the Solid Sound Festival last summer for overtime, do not show up against his budget but in the general receipts.
Nevertheless, "we're looking at a very sizable shortfall here but I think you're going to see there are a lot of smaller things that we — turnbacks — use," said the mayor. "There are some places we will not spend up to our budget."
The snow and ice account, the only account municipalities can overspend, will get some relief from federal reimbursements for the Jan. 12 snowstorm. The mayor said he expected to get $47,000 from the Federal Emergency Management Agency toward the $58,000 spent in man-hours, material and equipment to battle the massive Nor'easter.
The veterans services account is already $47,000 over and is expected to spend another $31,000 a month for the next four months. Seventy-five percent of those funds will be reimbursed by the federal government but not until the next fiscal year.
Alcombright said the uptick reflects the large number of veterans who have served in the Middle East and Afghanistan. "We're serving a lot of veterans through this district office," he said. "This money goes back into the community; it pays for rent, it buys groceries, it does all these things. It's a program that needs to be there."
The mayor said city is also keeping an eye on Department of Public Works salaries, which were elevated becuase of the amount of overtime to fight the near-constant snowstorms, and the health insurance account, which is currently projected to be about $100,000 over, "but we're hoping it will fall in line."
Also in deficit: the mayor's office because he didn't realize he had to budget $2,000 in dues to the National Mayor's Association. He promised to do it right next year.
Overall, the city is running about where it should be three-quarters of the way through the fiscal year, said Alcombright, with half its expected revenues received and most accounts having spent between 60 percent and 70 percent of their budgeted amounts. The fiscal year ends June 30.
Among the good signs are some $90,000 collected in back water fees; a projected increase in school tuition and about $50,000 more in transfer station revenues; more back excise taxes collected; savings of up to $50,000 from taking over the water filtration plant; and bundling of utility costs for all departments which could mean another $70,000 in savings.
The city is also preparing to sell off a number of properties later this summer, including two 64-acre lots off West Shaft Road. A solicitation for bids from auctioneers is being prepared for publication.
The sewer fee is expected to show a deficit its first year because a first-quarter payment couldn't instituted in time.
"It ain't pretty but I think it's doable," said the mayor. "We're going to continue to watch revenues very closely."
Alcombright also provided the committee and those in attendance with the city's responses to recommendations from the state management review and the audit done by Scanlon & Associates. Many of the issues were in the process of being developed or implemented; others, such as adopting current budget procedures as ordinances, were found to be too complex to adopt before the fiscal year begins. They will continue to be worked on.
He said the city was also following the Governmental Accounting and Standards Board, or GASB, rules by accounting for unfunded post-retirement benefits. The city is projected to have future liabilities of $92 million.
"If were to start funding it it would be $3 million a year," said Alcombright. "The accounting practice says you should be banking for this but it would bankrupt every city in the state."
The mayor will give his annual "State of the City" address at Tuesday's City Council meeting.
Mayor Richard Alcombright is expected to address opportunities for growth as well as the city's precarious financial condition.
On Monday, the mayor will join business and city leaders in announcing a new partnership between the city's business, education and cultural sectors. The economic development initiative, dubbed "The Partnership for North Adams," is being touted as a way to "propose and advance innovative community development projects and public/private partnerships."
Alcombright made the pursuit of economic opportunities, particularly hopes of drawing light industry back to the city, a centerpiece of his campaign. Those efforts have been stymied in part by the economic collapse that left the state and its communities reeling and the city's hard-hit finances.
Since his election last year, the mayor has had to raise taxes and institute a sewer fee to help cover budget shortfalls. He's expected to discuss on Tuesday night the looming budget gap of $1.2 million for the coming fiscal year - a shortfall that could grow to $3 million depending on the state's ability to fund municipal aid.
The Finance Committee will get a look a first draft of the 2012 budget on Monday afternoon.
The City Council will also take up bonding of the city's financial officers and several other matters.
The resignation of Rep. Gailanne Cariddi, D-North Adams, will be accepted by her colleagues. Her resignation will end 20 years of service on the council as she takes up her new duties as state representative for the 1st Berkshire District. Cariddi was sworn in that State House last week.
The City Council will be asked to approve a tax classification shift that sets rates of $14 per $1,000 for residences and $31.49 per $1,000 for commerical businesses.
The rates will be determined by the "shift" between commercial and residential tax classifications approved by the council on Tuesday. The recommendation is a residential factor of 77.8041 percent.
In a communication to the council, Mayor Richard Alcombright say that in setting the shift, "you will be approving an increase in the tax rates for both the residential and commerical taxpayers."
The issue, he reminds them, has been discussed at length and the new rates are necessary for the city to provide expected services in light of continued reductions in state aid.
"As we set this rate tonight, we are assuring our community that we will be able to provide services that they have all come to expect," he contines.
The Finance Committee will meet Monday at 5 p.m. at City Hall at the mayor's request to review the calculations and ask questions. However, it is unlikely the council will vote against the recommendations; the council approved the fiscal 2011 budget with expectation of an increase in property taxes.
The residential rate will jump a $1.46, or 11 percent. Compared to previous years, the residential tax rate will still be lower than in both 2003 ($14.69) and 2002 ($14.33). A home valued at $150,000 would be assessed $2,100.
The commercial rate will also jump 11 percent, making it the highest in the past decade. Prior to this, the highest year for the commercial tax was 2006 at $28.98.
If a singe tax rate were chosen, the tax rate for all property would be $17.99 per $1,000.
In documents provided to the council, the amount of residential and commercial property value has decreased since fiscal 2010 by nearly $13 million, 85 percent of which was residential. Commercial value dropped nearly $1 million; the rest was industrial and personal property at another million.
In his communication, the mayor stressed the difficulties the city will have in the coming fiscal year. "I am predicting a $2 [million to] $3 million dollar budget shortfall in FY 2012. This will certainly result in very difficult decisions with respect to pontential losses in programming and services throughout the city."
Also on the agenda for Tuesday's council meeting is a (hopefully clarified) ordinance for licensing waste haulers; Judy Grinnell with an update on the Hoosic River Revival and a communication from Councilor Gailanne Cariddi on the request by local historian Paul Marino on honoring a former resident of the city, Lue Gim Gong.
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.
:: Preliminary Election: Deadline to register is Wednesday, Sept. 7. (Office open from 8 to 8.)
:: General Election: Deadline to register is Tuesday, Oct. 18
Registration can be completed at the city clerk's office at City Hall.
Absentee ballots are now available at the city clerk's office for the Sept. 27 preliminary city election. Voters may come in between the hours of 8 and 4:30 weekdays. Written reguests for mailed ballots can be sent to City Clerk's Office, 10 Main St., North Adams, MA 01247. Deadline for absentee ballots is Monday, Sept. 26, at noon.
The preliminary election will be held Tuesday, Sept. 27, to narrow the field of three mayoral candidates to two. The general election to select nine city councilors and a mayor will be held Tuesday, Nov. 8.