Pittsfield Councilors Question Budget Transfers
The city's Finance Committee ultimately supported the director's request for a transfer, despite Councilors Mazzeo and Connell raising numerous questions.
The request is for $945,000 from various accounts — plus the use of some $300,000 in free cash — to close a gap in the snow and ice budget. The director of finance is also looking to transfer a total of $400,000 from 11 different budget lines to cover a deficit for police overtime budget.
Those two lines have been historically underfunded and the council, knowing full well that the numbers aren't enough, continues to vote in favor of a number short of what is expected during the budget season.
"It has become one big shell game and it has to stop. We need to be more realistic with these numbers," Ward 4 Councilor Christopher Connell said.
The debate on Wednesday among the Finance Committee primarily hinged on snow and ice — the police overtime deficit hadn't been put before the council yet but came up on Wednesday.
According to Director of Finance Matthew Kerwood, in the last five years, the snow and ice costs have ranged from as low as $942,000 to as high as $2 million. But, the city has only recently increased its budget for that to $700,000 — still well short of the needs. This year there is a $1.2 million gap between what was spent and what was budgeted.
To cover that difference, Kerwood is asking the council to shift $800,000 from the health insurance line, $145,000 from general insurance, and then use $319,450 in free cash to bring that line even.
Kerwood said he agrees with Connell's point in trying to match up the budget lines as much as possible. He said both police overtime and snow and ice have been underfunded for "decades of operation." But, that has become more than just a trend more recently but a necessity to keep the budget under the levy ceiling.
Snow and ice, however, is a much trickier budget line to manage. Because of the uncertainty around a winter, the state does allow deficit spending for snow and ice. That difference can be made up through the following budget year if needed. All of the other department bottom lines must net out or still have a balance - a balance which falls into free cash.
But, if a city raises its budget for snow and ice it cannot reduce it without losing that ability to deficit spend. The city's routine has been to cover the deficit through transfers so it hasn't necessarily needed the ability to deficit spend, but it is a tool that could be helpful should there be a particularly bad winter.
"If we raise it, we can't lower it," Kerwood said.
Connell, however, said the city could always budget closer to the actual amount and then if there is left over, transfer that out to other departments and not necessarily decrease the budget the following years. He said that would essentially be the opposite of how it has been happening — now the budget runs over and to close out the books transfers are made from numerous departments.
"I think it is better to do it that way rather than trying to play a game every year, finding money here and there," Ward 2 Councilor Kevin Morandi agreed.
Councilor at Large Earl Persip added that with a large number of transfers — both transfers from the council and mayoral transfers — "it is hard to follow along sometimes. I think we need to clean up some accounts."
That sentiment was echoed by Councilor at Large Melissa Mazzeo, who had poked around at the transfers but felt she hadn't known enough information about further requests expected to come before they Tuesday to be able to make a recommendation. There are also deficits in Finance and Administration and with the Retired Senior Volunteer Program.
Throughout the budget debate, Mazzeo and Connell had felt there were a number of other lines which had been overfunded compared to the actual spending in previous years. Repeatedly it was reported that those lines could support deficits in such things as snow and ice or police overtime.
Much of the difference in opinion stems from the way Kerwood budgets. When it comes to the more volatile budget lines, Kerwood likes to budget for the higher possibilities. Should those high-end numbers not be hit, then that opens the flexibility to cover any deficits. Anything that budgeted is not spent then rolls into free cash, which can be used to build reserves or capital expenses.
Connell and Mazzeo, however, don't want the administration to have that type of flexibility. They feel it would be more transparent and cleaner to attempt to pull each individual lines as close as possible to historic spending trends.
Transferring between budget lines is a common practice at the end of the year to balance budgets. But, Connell and Mazzeo feels the city has been doing more transfers to balance the books than they'd like.
Tags: fiscal 2018, pittsfield_budget, snow & ice,
