PITTSFIELD, Mass. — The city will overspend on public safety overtime and snow and ice this year fiscal year.
The accounts have been on the watch list for Director of Finance Matthew Kerwood and by halfway through the year, the budgets for police and fire overtime are just about spent and snow and ice removal is overspent. Kerwood says the city will have to transfer money from other budget lines to cover those deficits.
"We will have to figure out where those additional funds will come from," Kerwood told the city's Finance Committee on Thursday.
The overtime budgets are easier to manage. The police force has struggled to find enough officers to fill out the ranks that are budgeted for in a given year, which contributes to the need for overtime. That leaves a number of vacancies with salaries that can be transferred to cover the extra overtime. The Fire Department is in a similar place with a large number of retirees this year.
Those overtime deficits are nothing new for either department. Budget transfers are regularly made to cover the additional expenses. Overtime for fire is budgeted at $400,000 and as of Thursday evening, $399,350 of that had been spent. The police budget is $900,000 and so far $886,305 has been spent.
Snow and Ice removal is one budget that communities throughout the commonwealth intentionally underbudget for because it is one of the few allowed for deficit spending. Once a community overbudgets, it loses the ability to deficit spend in future years. To preserve that option, most communities underbudget for snow and ice removal.
In Pittsfield, the city budgets for $700,000 and has spent $907,271 to date -- or 129 percent of the budget. In recent years, the city has transferred money from various underspent or reserve accounts at the end of the fiscal year to cover that deficit.
Ward 4 City Councilor Christopher Connell has been pushing to raise the level of funding for each of those line items. Historically those lines haven't been funded properly while other accounts end up making up the difference at the end of the year. He said the moving of money in and out of budget lines makes it difficult to get a handle on the actual needed each year.
"It makes the budget process very difficult because when I look at what has been expended so far in certain line items and projecting what we would spend in the next month and a half, there is excess," Connell said.
Connell said he understands the idea behind underfunding snow and ice but said he'd like to see that be increased a bit to lessen the amount of money being moved at the end of the year.
Additionally, the account for benefits conversion in the unclassified budget is overspent. Kerwood said there have been a number of unanticipated retirements, particularly in Police and Fire departments, that have raised that cost. He said the city budgeted for $400,000 and has already spent $571,725.
Kerwood added that unemployment insurance is trending well with just 25 percent of the budget being spent to date and health insurance is trending slightly under budget.
Those half-dozen accounts have been highlighted numerous times over the year when Kerwood provided quarterly presentations to the Finance Committee. However, those are areas are also a concern while overall the budget is trending well.
Kerwood said revenues are trending above estimates. He said the third quarter bills for property tax have gone out and $54,840,859 have been collected of the $76,390,2013 billed for the entire year. That is a 71 percent collection rate. Personal property is at 72 percent collected with $9,990,874 to be billed throughout the year and $7,223,161 collected so far.
Hotel-motel taxes at the mid-year point were already 64 percent collected and meals taxes were at 56 percent collected at the mid-year point. Motor vehicle excise is at only 17 percent collected but that's because the large billing hasn't gone out yet. In March the city sends out the majority of the excise bills.
"The largest motor vehicle commitment goes out in March so we will see an uptick in revenue associated with that once that commitment goes out," Kerwood said.
The city has a windfall of revenues from the tax title auction held in October. The city expected interest from tax titles to come in at $120,000 but throughout the process of auctioning the titles, many set up payment plans or paid off back taxes plus interest. The city has collected $400,616 to date in tax title interest -- 233 percent of what was budgeted.
"This will drop down in 2020 so this is not a sustainable thing," Kerwood said.
The city has so far seen $93,868 in earnings on investments, which is 78 percent of the $120,000 budgeted. Kerwood has revamped the city's investment policy over the last four months and even the auditor has praised those efforts.
In total, 45 percent of all local receipts have been collected at about the halfway point in the year and that is without the motor vehicle excise bills being released.
In the overall scheme, the city has spent $83,207,053 by the end of the second quarter, which includes $10.4 million in holdovers from last year's budget. So far the city has taken in $74,947,107 in revenues at the end of the second quarters.
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