NORTH ADAMS, Mass. — Mayor Thomas Bernard presented a draft fiscal 2020 spending plan of $44.3 million on Wednesday that he described as "maintenance budget."
The total to be raised by taxation is $17,768,621, up $247,569 or 1.41 percent over this year.
Of that, the expense budget of $40.9 million includes a $152,850 increase in expenses over this year, or about .37 percent, a full-time position at the airport to be offset by revenues there, and all contract wage increases including 1 percent for non-union staff.
The total budget of $44,319,602 includes cherry sheet offsets, state assessments and estimated tax abatements, up less than 1 percent over fiscal 2019.
There is no anticipated use of reserves or increases in water or sewer rates to balance the spending plan. The city will see nearly $1 million fall off in debt as a number of projects are paid off, including Brayton and Drury High schools.
The North Adams Public Schools, which take up about 43 percent of the budget, will be level-service funded at $17.8 million.
"Even though we have the retirement of debt, we're really looking at another another maintenance budget," said the mayor. "We're not looking at any significant capital investment, we are going to do our best to capitalize on new revenue opportunities, including things like the cannabis, understanding that we're projecting an extremely conservative number right now, because we don't know what that will look like given the overall marketplace for cannabis statewide.
"And then as as mentioned, we're talking about a review of structural items starting in FY20. That would include the classification compensation plans, as well as our overall fee structures."
Wednesday's Finance Committee meeting is the first of several planned reviews of the budget prior to its anticipated presentation to the full City Council at the end of May.
This first meeting the committee went over unclassified, capital, interest and debt, and revenues line items as presented by the mayor, Administrative Officer Michael Canales and Auditor David Fierro.
The major increase in unclassified expenses — line items that don't fit in other categories — is medical insurance. That expense is up $232,472 or about 5 percent.
The administration is projecting a small increase in revenue by staying on the conservative side. With the state budget process still moving along, the city's financial team is sticking with the numbers in the governor's budget released in January.
"We're watching those numbers as they continue to develop, we're being as conservative as we can upon local receipt estimates," the mayor said.
The revenues for fees are set at the current rates although those are expected to be changed when the Finance Committee takes them up later this spring.
Projected tax revenue from cannabis is penciled in at $15,000, which the committee questioned. Bernard said the company proposing a dispensary is still going through the state permitting process.
"If you look at the numbers that Northampton saw, they were phenomenally higher than that," acknowledged the mayor. "But we're also at a point now that the benefits are probably ... saturation as the market has expanded. ...
"Again, a conservative number to acknowledge we expect something, but what that would be remains to be seen."
The city also plans to sell 40,000 in solar credits out of a bank of 150,000. It is required to purchase all the credits from the solar array on the capped landfill and then uses those against it electric bills; when the array overproduces, the excess credits can be saved or sold.
One thing that's been added to the revenue budget is the aviation gas sales and leasing at Harriman & West Airport. The city is projecting about $96,000 in revenue that would offset the proposed maintenance position for the airport.
Canales explained that the city purchased aviation fuel and then sells it at a 75 cent markup determined by the Airport Commission. The Shamrock Hangar that had been in private hands is now owned by the city and the four spaces in there are now leased.
Bernard said the city would also be pursuing an operator for the planned cafe in the new administration building that would also bring in revenue.
"We've talked over the last year and a bit about this million dollars or so in debt that was going to fall off of the books this year," the mayor said. "And you're seeing that reflected in the fiscal 2020 budget, which is one of the factors that is contributing to the ... currently modest budget increase. We're not seeing a lot of opportunity for additional capital investment but it is allowing us to fund the budget without significant increase."
Committee Chairwoman Marie T. Harpin had concerns that only about $46,000 was being added to the capital budget, bringing it up to $821,000.
"Some of the things I'm concerned about are some of the structure in the city and some of it really might be something that might bite us, if we don't plan for it," she said. "You see walls that are kind of almost falling and roads in disrepair."
Committee member Rebbecca Cohen agreed that some of these items might be falling by they wayside as other projects move ahead of them. She did, however, compliment on the administration for implementing a program that allows abuttors to buy city land straightforwardly.
"So I hope that there's more opportunities like that, that we can turn around some zero dollar land for, to make some money," she said.
Bernard said once this budget is set, the conversation looking ahead to fiscal 2021 will be to talk about the constraints as the city approach its levy ceiling.
"One of the things we're going to look at is the impact of retirements and replacements on the budget," he said. "And we'll continue to pursue growth opportunities. Again, these are these are sort of big, big level strategic priorities. But I think it's important as we talk about this year's budget to set the stage for where we see the city going over the next few years."
The Finance Committee has scheduled meetings for Wednesday, May 1, to discuss public safety and public service; Wednesday, May 8, for school budgets; Wednesday, May 15, for general government and the classification and compensation plan; and Wednesday, May 22, for general review and recommendation vote. All meetings are at 6:30 p.m. in council chambers.
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During the coronavirus pandemic, our health concerns – for ourselves and our loved ones – have been at the top of our minds. But financial worries have been there, too, both for people whose employment has been affected and for investors anxious about the volatile financial markets.
And one aspect of every individual's total financial picture has become quite clear – the importance of an emergency fund.
In normal times, it's a good idea for you to keep three to six months' worth of living expenses in a liquid, low-risk account. Having an emergency fund available can help you cope with those large, unexpected costs, such as a major car repair or a costly medical bill.
Furthermore, if you have an adequate emergency fund, you won't have to dip into your long-term investments to pay for short-term needs. These investment vehicles, such as your IRA and 401(k), are designed for your retirement, so the more you can leave them intact, the more assets you are likely to have when you retire. And because they are intended for your retirement, they typically come with disincentives, including taxes and penalties, if you do tap into them early. (However, as part of the economic stimulus legislation known as the CARES Act, individuals can now take up to $100,000 from their 401(k) plans and IRAs without paying the 10 percent penalty that typically applies to investors younger than 59 1/2. If you take this type of withdrawal, you have up to three years to pay the taxes and, if you want, replace the funds, beyond the usual caps on annual contributions.)
Of course, life is expensive, so it's not always easy to put away money in a fund that you aren't going to use for your normal cash flow. That’s why it's so important to establish a budget and stick to it. When developing such a budget, you may find ways to cut down on your spending, freeing up money that could be used to build your emergency fund.
There are different ways to establish a budget, but they all typically involve identifying your income and expenses and separating your needs and wants. You can find various online budgeting tools to help you get started, but, ultimately, it's up to you to make your budget work. Nonetheless, you may be pleasantly surprised at how painless it is to follow a budget. For example, if you have budgeted a certain amount for food each month, you will need to avoid going to the grocery store several times a week, just to pick up "a few things" – because it doesn't really take that many visits for those few things to add up to hundreds of dollars. You will be much better off limiting your trips to the grocery, making a list of the items you need and adhering to these lists. After doing this for a few months, see how much you have saved – it may be much more than you would expect. Besides using these savings to strengthen your emergency fund, you could also deploy them toward longer-term investments designed to help you reach other objectives, such as retirement.
Saving money is always a good idea, and when you use your savings to build an emergency fund, you can help yourself prepare for the unexpected and make progress toward your long-term goals.
The governor noted that people had been demonstrating outside the State House last week over their frustration with the slow pace of the reopening, and that several protests had been going on peacefully all day Sunday.
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