Amherst panel backs new fund for reparations for Black residents

  • Amherst Town Hall Gazette file photo

Staff Writer
Published: 6/15/2021 12:12:07 PM

AMHERST — A reparations stabilization fund to hold money Amherst officials could use for making restitution to Black residents for past harms is a step closer to reality.

The Finance Committee is recommending to the Town Council that a special fund for reparations be created, initially by using $210,000 in free cash that is not needed to support fiscal 2022 municipal services spending.

How the fund is created is the idea of Finance Director Sean Mangano and Comptroller Sonia Aldrich, who wrote in a memo to the Finance Committee, also signed by Town Manager Paul Bockelman, that such an account could be managed like an endowment, with contributions invested at the direction of a professional investment consultant.

“We think this could be a viable option for funding reparations in the future,” Mangano told the Finance Committee at its June 10 meeting,

The initial seeding would be done when free cash generated from an operating budget surplus is more than 5%. Mangano said this free cash is usually transferred to a stabilization reserve fund.

Town Council has considered creating the reparations fund using tax money generated from marijuana sales in fiscal 2020. That $206,135 could be used for reparations, but those revenues are already supporting other spending in the budget, so they wouldn’t be available to initiate the fund later this year.

Since town officials want to build the account over time, and make sure that it’s sustainable, Mangano said there could be active management of the endowment with a certain percentage, such as 4%, set aside to spend each year, otherwise known as an annual drawdown.

The goal would be to establish something that can last in perpetuity and be as impactful as possible, Mangano said.

District 3 Councilor Dorothy Pam said the proposal seems like a good idea in concept, even with uncertainty about what kind of income would be generated over the next decade.

“I like the idea that this is a form of stability and might not be subject to the whim of who’s on the council, and who’s not on the council,” Pam said.

Mangano said officials may have to consider what reserves are each year, and if they are high they could go toward the reparations fund. But in lean times free cash might not be available.

District 2 Councilor Pat De Angelis asked if the public or others could make donations to the account. Mangano suggested this might be possible.

The Town Council could establish the new fund as soon as its meeting on Monday, June 21.

At least initially, the African Heritage Reparations Coalition would provide advice on how the funds would be spent, Mangano said.

Reparations for Amherst co-founder Michele Miller wondered if there will be a body to make recommendations on reparations on an annual basis once the temporary coalition has done its initial work.

Finance Committee Chairman Andy Steinberg said an appropriate process will have to be in place to advise the council on how to use the money, noting that any proposal for reparations should be scrutinized carefully to make sure it is legal.

Amherst is modeling its reparations after Evanston, Illinois, which this year has qualifying households in receive up to $25,000 for down payments or home repairs.

Scott Merzbach can be reached at smerzbach@gazettenet.com.


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