Pittsfield Finance Review Reflects Impact of the Pandemic
PITTSFIELD, Mass. — The state of the city's current budget reflects a disadvantage in areas affected by the pandemic but also a significant influx of cannabis tax dollars.
Director of Finance Matthew Kerwood presented a review of the third quarter of fiscal 2021 to the Finance Committee on Thursday.
In the quarter that ended on March 31, the city collected 74.3 percent of its overall commitment on property taxes totaling $59,482,137 and 74.1 percent of personal property taxes at $8,690,148.
The city's General Stabilization account is at $4,478,112 and the Public Works Stabilization Account has a sum of $243,633. The Public Works Stabilization Fund was created in October 2019 and is where 25 percent of marijuana tax revenue is deposited.
The certified amount of free cash stands at $5.3 million because there were no appropriations from the free cash account in fiscal 2020, Kerwood explained.
The COVID-19 pandemic has affected the city's local receipt collections in the hospitality industries, as it has only received around 50 percent of estimated taxes for hotels/motels and meals in the third quarter. Hotel/motel tax collections came in at $397,975 and meals tax at $490,007.
"For hotel motels, the estimated is $710,500. As of March 31, we collected 56 percent, this is concerning, given the fact that it's the third quarter, and we're roughly only 50 percent of this estimated receipt, this is a direct result of the pandemic," Kerwood said. "For meals, $751,100 as of March 31, we collected 65.2 percent, this is concerning as well, a little less concerning but again, I think tonight, I know that we are going to be short, in our hotel/motel and meals most likely, which I figured out."
Though Pittsfield is lacking in collections from the hospitality industry, cannabis tax dollars in the third quarter surpassed the set goal by 238 percent, as the city only estimated a $196,925 collection and received $469,266.
"While we suffer in other areas of local receipts, this is not one of them," Kerwood said. "And we have done very well, in the collection of marijuana tax."
Kerwood reported on account expenses to watch, which include the emergency manning costs for the Fire Department and overtime costs for the Police Department.
The Pittsfield Fire Department was given an original appropriation of $375,000 that was adjusted to $815,000. As of March 31, it has used $727,444, which Kerwood attributed to the department having 20 vacancies.
"I had a conversation with the fire chief today on what's driving this, why are we here," Kerwood said. "They currently have 20 vacancies out on injured on duty, they recently just hired nine, so they're trying to cut back at that."
The Police Department's schedule overtime was originally set at $1,275,000 and was adjusted to $1,281,129. As of March 31, it has used $667,575 or around 52 percent. Kerwood said this number is "tracking really well."
Because of the pandemic, the budget has been "completely blown" for unemployment insurance expenses as the original budget was $150,000 and $644,578 was spent as of March 31.
A lot of that is based on fraudulent pandemic-related unemployment claims, Kerwood said, specifically on the school side. His office has been able to identify around $220,000 worth of fraud out of the amount that was expended.
"Early in the pandemic when schools were not open, bus drivers, cafeteria workers paraprofessionals had all filed for unemployment and July bills alone charged the school department for $196,000," he explained.
"I will be having to do a barrel transfer to try to address that shortfall in the budget, but there is good news reported on this and that is of the $644,000 that has been extended, we've received $220,000 in credit so we haven't had to pay some bills, we've been getting credits, and we will continue to get credits."
The state Department of Unemployment has also indicated that the city will get reimbursed for 50 percent of legitimate claims associated with COVID-19, Kerwood added.
"Clearly COVID created a huge opportunity to take advantage of not only the system in Massachusetts but across the country," Kerwood said, adding that an individual tried to use his information to file a false claim in the state of Kentucky. "This is not a Massachusetts problem."
Councilor at Large Earl Persip III queried Kerwood on whether he believes the marijuana revenue will be affected by the legalization of cannabis in the bordering states of Vermont and New York and the possibility of losing out-of-state customers.
"We'll have to see, I'm still gonna be conservative in my estimates and what I'm going to adjust them to is kind of where we're tending right now," Kerwood replied. "So if we stay within that area we are now, then my estimate will hold true and we'll still be able to meet that mark."
Commissioner of Public Utilities Ricardo Morales weighed in on the city's winter maintenance and overtime spendings, which were appropriated for $800,000 and cost the city $1,049,514 as of March 31.
He explained that the biggest costs are contractors, salt, sand, and overtime expenditures, which had to be used the previous night because of icy conditions that were caused by the freezing temperatures Berkshire County received.
The biggest decreases that the city experienced in terms of winter maintenance — even with the past winter being harsher than the previous year — were the indirect expenses such as fuel, equipment, repairs, and maintenance.
This was solely because of the acquisition of newer equipment, Morales added.
Tags: fiscal 2021, pittsfield_budget,
