North Adams Officials Prepare for Budget Cuts

By Tammy DanielsiBerkshires Staff
Print Story | Email Story
Administrative Officer Michael Canales and Treasurer David Fierro Jr. run through a PowerPoint of the city's finances.

NORTH ADAMS, Mass. — The city is projected to end this year with only $95,000 in reserves and is predicting cuts of nearly $1 million going into fiscal 2015.

"This year, we're not going to have the reserves to cover $800,000, so we're going to come in with $800,000 of cuts," Mayor Richard Alcombright told the Finance Committee on Wednesday.

Alcombright and his financial team — Administrative Officer Michael Canales and Treasurer David Fierro Jr. — laid out the numbers for the committee and the several other city councilors and residents who attended.

The news wasn't much different from the mayor's message last week that revenues simply weren't pacing at the same level as expenditures, and reserves drawn down since the failure of a Proposition 2 1/2 override three years ago were nearly depleted.

State aid has dropped more than $3 million while the city's budget has increased nearly 4 percent over five years.

"It's scary ... we're in a sense almost terrified," Alcombright said. "I think we're going to bring forward what we need to bring forward."

The solution for closing out this fiscal year will be to dip into reserves (several accounts can only be used for specific items), including the nearly $300,000 in the land sale account. Use of the land sale account will require an act of the Legislature and state Sen. Benjamin B. Downing has already been contacted to help shepherd it through.

The city has to cover $445,508 in overtime and veterans expenses, projected out the final three months. The reserves total $540,311 — including the $243.84 left in the stabilization account.

"We're probably $95,000 in the black but it's a precarious place to be," the mayor said.

"We just can't get over the hurdle of the significant drop in state funding ... We can't create revenue as fast as we've lost it."

The scenario for fiscal 2015 is the worst case, based on the governor's budget that flatlines local aid. The mayor said he understands the governor wants the books to look good but the state has more than $1.7 billion in the so-called "rainy day" fund and its revenues projected as increasing 4.9 percent. Last week, legislative leaders agreed to up local aid by $125 million, or about 2.7 percent more for towns and cities.

That would jump the city's increased state aid from $29,000 to $109,000, along with $39,000 more in education aid. But the mayor pointed out the foundation budget for the schools is up $240,000 — nearly double the expected state funding increase.

The city had been making progress the last couple years in reducing its structural deficit but a combination of rising costs — including $120,000 more in pensions and $320,000 in insurance — and level-funded aid are taking a toll.

"It's about one step forward, seven back," he said. "The state aid number has gone down as the tax number has gone up."

State aid has dropped from just over half the budget to 46 percent; local receipts make up 17 percent and taxes 37 percent.

Several in the audience asked if spending could be cut or more squeezed from delinquent taxpayers. The mayor said departments had been consolidated, positions left vacant and supplies reduced or eliminated.

Finance Committee Chairwoman Nancy Bullett and member Wayne Wilkinson were given an illustrated presentation on the city's finances.

Canales said some expenses had to be made, such as when a water pump broke recently; not replacing it could mean the half the city would be out of water.

The city has also sold off municipal lots and those taken for back taxes and raised some cash. But taking other properties had costs associated with Land Court and often had to be torn down, leaving little of value to sell.

"If they were better lots the banks would be foreclosing on them," said Canales. He and the mayor said they were speaking with companies that buy up tax liens and mortgages to see if that would be possible.

PILOT funds, or payment in lieu of taxes, was also broached, although city officials noted there were really only three major nonprofits — North Adams Regional Hospital, Massachusetts Museum of Contemporary Art and Massachusetts College of Liberal Arts.

All three do pay water and sewer; some of the buildings on the hospital campus are taxed as are the commercial spaces at the museum. The college, a state-owned entity, cannot be taxed but possibly holdings by its foundation could be in a PILOT program. The hospital's own finances are in fragile condition and it's not clear how much Mass MoCA could handle.

"We've done the math and in the very best case ... we stand to pick up $60,000 to $80,000," said the mayor. "And that's with the hospital in play... but we're looking into it."

Still, Alcombright said the city has the seventh lowest tax bill in the commonwealth, and the six below it are towns with minimal services.

"Raising taxes has been my job, not my desire," said the mayor. "I hope people understand where the need comes from."

Tags: budget cuts,   budget shortfall,   city budget,   fiscal 2015,   state aid,   

3 Comments welcomes critical, respectful dialogue; please keep comments focused on the issues and not on personalities. Profanity, obscenity, racist language and harassment are not allowed. iBerkshires reserves the right to ban commenters or remove commenting on any article at any time. Concerns may be sent to Text Ads

MCLA Summer

Each year, MCLA designs summer course offerings for both traditional and non-traditional students

Adams Community Bank

Adams Community Bank is committed to your Financial Success. Click to view our website. 413-743-0001

Meadow Farm Equipment

Power Equipment, Lawn Mowers & Trimmers, Chain Saws, Sow Plows & Blowers, Generators, & more. Lee MA

Support Local News

We show up at hurricanes, budget meetings, high school games, accidents, fires and community events. We show up at celebrations and tragedies and everything in between. We show up so our readers can learn about pivotal events that affect their communities and their lives.

How important is local news to you? You can support independent, unbiased journalism and help iBerkshires grow for as a little as the cost of a cup of coffee a week.

Recent Stories