Councilors Marie T. Harpin, Benjamin Lamb and Chairman Wayne Wilkinson listen to explanations of budget line items on Wednesday.
NORTH ADAMS, Mass. — The Finance Committee began its review this week of a proposed $44 million spending plan for fiscal 2019.
The committee will look through the draft budget over four meetings, the first of which was held on Wednesday night in City Council chambers. That session looked at general government, revenues, unclassified, debt and capital costs.
Over the next three meetings, the committee will look at public services and public safety; McCann Technical School; and North Adams Public Schools. The members of the committee are Chairman Wayne Wilkinson, Benjamin Lamb and Marie T. Harpin. Also in attendance were Councilors President Keith Bona and Jason LaForest.
This is Mayor Thomas Bernard's first budget in office and he described it as a level-funded maintenance budget that is right now $114,376 out of balance to the red.
"Fiscal '19 is going to be a challenging budget year because this is going to be a maintenance budget, this isn't a strategic or investment budget," he said. "It does set the stage for fiscal 2020 when significant debt will be falling off and the city can look at investment in a different way."
The total budget is $44,034,196 and is up 1.6 percent, or $806,979, over this year. Almost $17.5 million of that is the school budget, which has not yet been approved by the School Committee. Revenues are forecast at $43,919,820, leaving the $114,000 gap.
Bernard said he and his financial team that includes Administrative Officer Michael Canales and Auditor David Fierro would be looking at models for closing the gap. The figures may also change based on more current numbers as the state continues its budget process.
"We're basing this number on the governor's preliminary budget numbers, the revenues are based on that," the mayor said, noting the House budget had just been released but that the Senate and final conference budget have yet to be approved. "We're going with the best information we have. The other thing that is a known is our labor costs. The previous administration settled contracts for three years so those costs are built into the budget with the exception of non-union staff."
Along with the contract costs, the budget draft also has a number of solid figures in areas that could have been higher.
"One of the things we were fortunate about with this budget is we will be looking at favorable assessments and entitlements so our Hoosac Water Quality District, the McCann budget and our insurance costs all came in at the lower or level estimates," Bernard said.
Fierro said estimated receipts are based on actual 2017 figures and bumping up the percentage according to historical data. "It's usually proved out to be pretty true," he said.
Sewer, however, was set with a higher rate of increase as a way to begin capturing the total cost of the HWQD, which processes the city's septic waste. The district's assessment for fiscal 2019 is $1,191,536, up $16,000, and the city is estimating receipts for sewer usage at $1,185,011.
Canales said this figure was still under discussion and could be pulled back to the actual 2017 expenditures and also believes the tuition receipts might be too conservative and could be bumped up.
"Probably the best news that we had coming in was that our medical insurance came in at a 3.69 percent increase and looking at back at the last 12-month average, our average -- the number of people using insurance -- went slightly down," Canales said. Overall, the amount budgeted has actually dropped slightly from this year.
That's a significant change from the past that often saw insurance hikes in the high single or double-digits. The city is insured through the Massachusetts Interlocal Insurance Association, pooling its resources with more than 400 municipalities and public entities.
"That's really remarkable for any institution and we know that there are other entities looking at double digits," said the mayor. "To be able to come back and report this is incredibly good news in the context of our fiscal management and in our context of the budget."
Other major changes for fiscal 2019 were in the salary lines for the Office of Community Development, which saw an increase for a full-time and a part-time salary but was offset in part by a 31 percent decrease in the line item for purchasing department salaries. The changes were because Larysa Bernstein has taken over as director of community development and the former director, Michael Nuvallie, has been put in charge of special projects and taken over the purchasing department.
Canales said both he and Nuvallie had taken the training to be certified in purchasing so the city would have a backup. "We think it's working really well so far," he said.
There is also an increase in the Office of Tourism and Cultural Development to reflect Suzy Helme moving from part time to full time. Bernard said she was basically working full time, including working closely with the Office of Community Development on grants, but not being compensated.
Mayor Bernard and Auditor David Fierro make a presentation.
Another salary change is the zeroing out of the city solicitor at $46,000 and the same amount budgeted for legal expenses. City Solicitor John DeRosa stepped down from the post and it was filled effective April by KP Law (formerly known as Kopelman & Paige) with offices in Northampton.
Bernard said his choice of the firm was based on the fact it has been "tested and fully vetted" by the numerous municipalities it services in Massachusetts. The practice has attorneys with specialization in different types of law related to municipal concerns and has contracts and boilerplate language available for most situations, he said. He offered to have a representative come in for a presentation if the councilors so desired.
The administration also plans on filling the assistant management information systems assistant post.
Wilkinson questioned the need for $50,000 to be put in the reserve account if contracted salary increases have already been accounted for. The account has been used historically to cover benefits for contracts that had not been concluded by the beginning of the fiscal year.
That money would cover nearly half the projected gap for fiscal 2019, he said.
Bernard said one option would be to budget for half the amount so there would be funds set aside in case there were salary increases for non-union employees. "We pegged that at $25,000 if we did a one percent increase," he said.
The reserve account is not part of the "reserves," a set of accounts for saving money, which now stands at $2.4 million.
The committee also looked over the capital expenses, which are up about $50,000 over this year to $791,000. Road paving -- largely asphalt for filling potholes and repairs -- is up by $12,000 from $30,000 this year to reflect actual expenditures in 2017. The cost and the need to transport the asphalt from South County was cause for the increase. On the other hand, electrical costs have remained down because of the municipal solar array. Canales said the city was able to sell off credits because it overperformed last year.
The committee will next meet on Wednesday, April 18, at 6 p.m. in council chambers to review public service and public safety. Wilkinson said these meetings will continue to be reviews and that the Finance Committee will do a final wrap up before voting to recommend.
"We will probably wait to vote on any particular items until ... probably the last one, because we don't know all the numbers," he said. "We could approve something this evening that could change with the state funding."
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