Mayor’s $103.9M spending plan involves no major cuts, layoffs
NORTHAMPTON — The city is entering next fiscal year on more solid financial footing than the shaky ground it stood on a year ago, a fact that will mean no significant cuts to services or layoffs for the first time in years.
That’s in stark contrast to last year when city officials grappled with a budget crisis that would have led to the elimination of 15 positions and a drop in city services had voters not approved a $2.5 million Proposition 2½ override last June.
This year also marks a milestone for the city — the budget in fiscal 2015, which starts July 1, will climb over the $100 million mark for the first time.
Mayor David J. Narkewicz unveiled his fiscal 2015 budget to the City Council Thursday night. The $103.9 million proposed budget includes a nearly $85.8 million general fund, which represents a 2.2 percent increase over the current year’s budget. Nearly 64 percent of the revenues are drawn from local property taxes.
In addition to the general fund, the budget also includes $18.1 million allocated from the city’s four enterprise funds — water, sewer, solid waste and stormwater and flood control. The enterprise that’s being introduced for the first time this year. The latter fund is being introduced for the first time next fiscal year and will mean a new fee for property owners. Its implementation will also result in significant changes in several departmental budgets, particularily the Department of Public Works.
The budget now moves forward for council review and budget hearings, including a public hearing scheduled for its next meeting on June 5 at 7:05 p.m. The council is expected to vote on the budget at that meeting and again at its June 19 meeting.
Narkewicz said the city has made significant progress in stabilizing and strengthening its fiscal position since voters approved the override. A large portion of the money from that override was set aside in a special fund to maintain level services over a four-year period. The plan called for the city to build up this new fund over the first three years and then use it to balance the city budget in fiscal 2017 before facing another budget shortfall in fiscal 2018.
The mayor said Thursday, however, that updated projections after the first year of the plan show that the money would last an additional two years beyond original estimates. That means the budget shortfall is currently pegged for fiscal 2020. Narkewicz said this positive development is a result of several factors, including lower expenditures in the current and future years.
“Once again — full disclosure — in FY2020 we will deplete the Fiscal Stability Stabilization Fund and will face a budget shortfall,” Narkewicz wrote in his budget message to the council.
On the upside, he said the projected budget gap that year would be smaller than originally forecast and by then the city will have paid off three of four debt exclusion override capital projects for the fire station, Northampton High School and JFK Middle School.
As he has in previous years, Narkewicz highlighted the state’s outdated and unfair state aid formulas. Net state aid for fiscal 2015 is projected to increase $22,258, or 0.23 percent. This falls short of the city’s most conservative state aid estimates and stands in contrast to state revenues that are projected to increase nearly 5 percent next fiscal year, Narkewicz said.
He said state aid to Northampton has dropped to 19 percent of its overall revenues, a 6 percent drop since fiscal 2009 and an 11 percent drop since fiscal 2002 when state aid made up 30 percent of the budget.
“This continuing erosion in state aid coupled with increase in state charges to Northampton for charter school and school-choice students is one of the largest single factors affecting our revenue picture,” Narkewicz wrote.
He vowed to continue to press state government for a larger piece of the revenue pie and to give municipalities more authority to raise local revenue.
In his budget message, Narkewicz highlights the five largest areas of increase in next year’s budget. They include:
∎ The Northampton public schools, which will see an increase of $856,300 and for the first time in several years will not have to cut staff or services. The schools will also be able to fund positions to meet new state mandates while addressing reading and math challenges and technology needs at the elementary level.
Additionally, Smith Vocational and Agricultural High School will get an increase of $724,000 next year, driven primarily by an increase in out-of-district tuition. This will allow for an expansion of vocational programs, staff and athletics.
∎ The Fire/Rescue Department budget is up nearly $363,000 next fiscal year as a result of retroactive salary increases dating back to fiscal 2011 and an increase in fiscal 2015. The city and the firefighters union agreed to a six-year contract last summer after a lengthy dispute.
Narkewicz said the Fire Department will have four fewer positions next fiscal year now that a federal grant has expired. The grant paid the salaries of the firefighters for two years and required the city to pay one year. Those positions have been reduced through attrition and retirements and will not mean layoffs, the mayor said.
∎ The budget for the Retirement Board will go up by about $166,600 to meet insurance obligations for current and future retirees and allow the city to fully fund its pension system by 2036. The budget also calls for a new trust fund of $100,000 to plan for long-term funding of retiree benefits other than pensions, which primarily means health insurance.
∎ The DPW’s Parks and Recreation budget is growing by about $150,500 to pay for additional staff and equipment needed to maintain the Florence Fields, a new athletic complex slated to open next fiscal year, and to implement organic turf management at the fields on a pilot basis.
∎ Charter school tuition for Northampton students who attend area charter schools is projected to increase by about $115,000, or 5.2 percent. The city is estimated to spend $2.3 million in such tuition next year, though some of that money will be offset by a state charter school reimbursement of nearly $393,000.
The budget is available on the city’s website at www.northamptonma.gov.