Northampton to dip into override reserve fund for first time

  • Northampton Mayor David Narkewicz presented the city’s fiscal 2019 budget to the City Council Thursday night. GAZETTE FILE PHOTO

@BeraDunau
Published: 5/18/2018 12:19:57 AM

NORTHAMPTON — The city needs to dip into a special fund created in the wake of an override that passed in 2013 to plug a projected shortfall of nearly $278,000 in next fiscal year’s budget.

“That day has now come,” Mayor David Narkewicz told the City Council Thursday when he unveiled the nearly $112 million fiscal 2019 plan.

Even though this is the first time the city will need to access the special override fund to maintain services, Narkewicz said the move comes with a silver lining. He said that revenue from the sale of recreational marijuana in the city, which is expected to begin this summer, may help generate enough money to push another override request even farther into the future.

The mayor also expressed hope that the “fair share amendment” ballot question, which would institute a new tax on millionaires in the commonwealth, would help the city’s bottom line.

The $111,976,953 proposed budget, which includes a $96 million general fund, represents a 2.3 percent increase over the current year’s budget.

In addition to the general fund, the budget also includes $15.9 million allocated from the city’s four enterprise funds — water, sewer, solid waste and stormwater and flood control.

The $2.5 million 2013 override was designed to fund schools and city services while setting the remainder aside into a fund for stabilizing the city’s budget. The fund now sits at more than $2.9 million. While the plan was originally set to be good through fiscal 2017, it is now projected to last through fiscal 2020.

“We have adhered closely to the plan as promised,” said Narkewicz.

The mayor said that the city is set to receive revenue from the sale of recreational marijuana, both from accepting the local option for a 3 percent sales tax on recreational marijuana and from revenue derived from host agreements with marijuana businesses.

“It at least offers a promising new source of local funding,” Narkewicz said.

Another source of hope expressed by the mayor was on the fair share amendment, which if passed this November would levy an additional 4 percent tax in Massachusetts on all income above $1 million.

“I strongly support this measure,” said Narkewicz, who said that the additional funds from such a tax could help to fund items such as charter school reimbursement, roads and schools.

Charter sending tuition represents a significant increase in the budget that provoked the ire of the mayor. Sending tuition is expected to increase by $285,194 to $2,692,089, an 11.8 percent jump.

Narkewicz criticized the philosophy underpinning the sending tuition, saying that the money’s loss is not offset by having fewer students in the school system. He also noted that the state’s reimbursement formula has not been fully funded.

“Northampton has been shorted $873,753,” said Narkewicz, noting the cumulative impact of the underfunding over the last five years.

The $29.7 million budget for the Northampton public schools includes an increase of $865,169, the single largest expenditure increase in the proposed budget.

Additionally, Smith Vocational and Agricultural High School will get an increase of $506,212 next year, driven primarily by an increase in out-of-district tuition.

The $277,850 being accessed from the Fiscal Stability Stabilization Fund is significantly less than the more than $800,000 the mayor had projected at the beginning of the fiscal 2019 budgeting process in January. This stems from there not being a more than half a million dollar increase in health insurance costs for the city.

“Our initial fiscal projections estimated a 5 percent increase,” explained the mayor.

Instead, the mayor said the city saw no increase in its health insurance line item.

Narkewicz also said that some of the progress the city has made in stabilizing its finances is due to the city having moved into the Group Insurance Commission, and that this should be weighed as the city considers whether to continue its membership.

A public hearing to consider the upcoming budget will take place on June 6 at JFK Middle School, beginning at 5:30 p.m. It will then be continued on June 7 at 7 p.m., in City Council Chambers. The council will preside over the hearing, which is open to the public.

The budget is available for inspection online, at the City Clerk’s Office, at the Forbes Library and at the Lilly Library.




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