NORTH ADAMS, Mass. — Mayor Richard Alcombright is proposing a budget package to the City Council that will raise fees and reduce positions to help close a more than $600,000 gap for next fiscal year.
The fiscal 2015 budget is $37,740,793, up 3.4 percent, or $1,246,909, over this year. But with no free cash and minimal reserves, the city is facing drastic cuts.
Alcombright said on Thursday that should the package pass, the city would not replace two openings in the police and Department of Public Works. The school budget was not yet completed but he anticipated staffing cuts in the school department as well.
"We're very, very hopeful we can stay away from further layoffs but depending on the numbers that come in ... ," he said. "We've had these conversations with the union, no one's very happy but they've been understanding of the problem we have."
Alcombright said he plans on putting forward a Proposition 2 1/2 override later this year to raise the city's ability to levy taxes to fund future budgets.
But for now, he said he's focused on getting 2015's budget in order.
The mayor is proposing to increase water rates by 10 percent, from $3.50 to $3.85 per cubic feet, and increase sewer fees from 42 percent of the water bill to 50 percent. The average annual bill increase for households is expected to range from $35 to $66 for a family of four. Water rates have not been raised since 2010.
Parking tickets could jump from $5 to $10 or $15, and demand fees would increase from $5 to $15, putting the city's fees on par with other municipalities.
Just raising fees is expected to generate some $426,500. The balance of the deficit would be offset by cutting staff and departments.
"This revenue package is ultimately necessary to support the proposed budget and allows the city to maintain critical services," the mayor wrote in the proposal to the City Council. "Without this, significant additional cuts will need to be made."
North Adams has been in a significant deficit position since the economic collapse, exacerbated by reductions in state aid. It's been relying on reserves to cover the gaps but that option is nearly dry.
State aid has still has not recovered, although the city is estimated to get about $100,000 more this year in unrestricted state aid, for a total of $18,499,557 for the city and school. In fiscal 2002, North Adams received $19.5 million in state aid.
Alcombright said the reoccurring structural deficit is unsustainable: the city can close the gap this year but the deficit for 2016 is already estimated at a half-million, and that will go up about $700,000 to $800,000 in the following year.
Finance Committee Meetings Wednesday, May 28, 7:30 • Overview of draft, historic comparisons Thursday, May 29, 6:30 • General government & public safety Wednesday, June 4, 7:30 • Public services, library, other Thursday, June 5, 6:30 • School budgets Wednesday, June 11 • Wrap-up
School Budget Public Hearing Tuesday, June 3, 6 p.m.
37 Main St., Suite 200
Much of the budget increases are because of rising costs and contractual obligations. Veterans services have jumped by half over two years, to $815,343; 75 percent of that is not reimbursed until the following year.
The city's also seeing increases in medical insurance costs, including a jump in family plans of about $84,000 caused by the closure of North Adams Regional Hospital. Short-term debt is also up $48,000 from the Colegrove Park school project. The annual debt load on the school will be offset in a couple years as the Drury and Brayton projects fall off.
Reductions have been made in a number of other departments, including about $60,000 out of public works.
"The other part of the reduction is the retirement system," said the mayor. "They've been very, very receptive to finding ways for us to restructure the schedule to pay a lesser portion this year so there's a $50,000 or so savings there."
The initial $800,000 deficit has been "winnowed" down as state aid figures and other revenues and savings became more clear.
Alcombright said he and his finance team had meet with state Sen. Benjamin Downing and Rep. Gailanne Cariddi on Beacon Hill, along with representatives from Ways & Means, the House speaker's office and Administration & Finance, in hopes of finding grants or other supplemental aid because of the hospital's closure and its effect on hundreds of jobs in the area.
"They've been very helpful, they've been looking for ways to help us," he said, but the city still has levy capacity, and "until we've exhausted all else," there's not much they can do.
"We know three years ago we had numbers proving this was where we would be," Alcombright said, referring to the failed override in 2011. "We wouldn't be having this discussion today if the override passed.
He will meet with the Finance Committee four times before presenting the budget to the City Council on June 10. Should the council not approve the budget, the mayor said that will give him time to present a "Plan B" before the end of the fiscal year on June 30.
"We're hoping that this revenue package will accepted and maintain what we have," he said, but it would be a short-term fix. "If we do nothing and I have to cut $625,000, that's 12-14 jobs in the city."
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