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Mayor cites ‘dire revenue picture’ in new budget 

  • Northampton Mayor David Narkewicz. GAZETTE FILE PHOTO

Staff Writer
Published: 5/21/2020 6:29:33 PM
Modified: 5/21/2020 6:29:22 PM

NORTHAMPTON — Mayor David Narkewicz has unveiled a $117 million budget for fiscal 2021, a spending plan that calls for cutting 20 full- and part-time positions as the city grapples with the financial strain brought on by the pandemic.

The annual budget represents a slight decrease (0.03%) compared to the current fiscal year’s budget, according to the proposal Narkewicz planned to present to the City Council Thursday night.

“We’re being extremely conservative, and we’re in many ways constricting the budgeting this year because we don’t know necessarily what the future is,” Narkewicz said.

The mayor cited uncertainties such as the timing of a local economic recovery, funding from the state, and whether there will be a resurgence of the new coronavirus in the fall. “There’s just so many unknowns,” he said.

A hard-hit economy and increased costs tied to the pandemic have left the city with lost revenue, including taxes from hotels, meals and adult-use marijuana, as well as revenue from building, plumbing and wiring permits. The city is projecting $1.85 million in lost revenue in April, May, and June. Over those three months, a lack of parking meter fees and enforcement fines, for example, will lead to an estimated loss of $731,000, Narkewicz told the City Council last month.

“This is a particularly challenging time because the May and June time period with commencement are some of the biggest months for our local hotel industry with the Five College graduations,” Narkewicz said.

On March 3, residents approved a permanent property tax increase so the city can raise an additional $2.5 million. Last month, Narkewicz announced that the increase would be delayed until July 2021, citing “severe economic stress facing Northampton residents.” But, Narkewicz wrote in his proposed budget that “this decision will put additional stress on an already dire revenue picture.”

“Many Northampton residents have been furloughed or laid off from jobs, and unemployment nationwide has reached levels not seen since the Great Depression” he wrote in his budget message. “The pandemic has plunged our economy into a recession that may take years to recover from.”

Narkewicz said the city is estimating between $300,000 and $500,000 in unanticipated costs related to the pandemic, such as opening a temporary emergency shelter at Northampton High School, staff overtime including in the Health Department, and technology costs for remote learning in the schools. The mayor said he hopes the Federal Emergency Management Agency (FEMA) will reimburse at least 75% of those costs, but the city may not see the money for a while.

“In our past experiences with these types of federal emergencies, it can take years for the reimbursement to come back to the city — there’s a lot of paperwork and bureaucracy,” he said.

It’s also not yet clear how much the city will receive in state aid, which makes up about 17% of its revenue, according to the proposed budget.

More city budget cuts could be down the road, Narkewicz warned. “We could see the need for deeper cuts either moving forward in fiscal year 2021 or even in future fiscal years,” he said.

The proposed budget includes cutting the equivalent of 17.25 full-time jobs, which amounts to 20 full- and part-time positions. Nine city employees were laid off earlier this month, and 11 open positions, including a human resources assistant, an IT support services coordinator, an assistant building commissioner, and several jobs at the Department of Public Works will not be filled. The job cuts are expected to net the city nearly $614,000 in expenditure reductions to balance the budget, according to the mayor’s spending plan.

A number of layoffs are at the Senior Center, such as a nutrition coordinator, a transportation coordinator, a van driver, and several part-time senior service assistants, according to the mayor.

“It’s unclear to me whether the Senior Center will reopen again this year,” he said. “Just given the fact of the pandemic and that seniors are most at risk for the virus.”

Though some senior center jobs were cut, “that doesn’t mean in the future that we wouldn’t bring those back as the economy recovers,” Narkewicz said.

Narkewicz’s own office also took a layoff, cutting the position of economic development coordinator.

No cuts are proposed for the Health Department, Fire Department, emergency dispatch, or the Police Department “as they are critical to the city’s ongoing response to the COVID-19 public health emergency,” Narkewicz wrote in his proposed budget.

The budget will draw nearly $1 million from the city’s fiscal stability fund — a pool of money created as a result of the $2.5 million override in 2013 that helps stabilize the city’s budget — leaving around $2 million in the fund.

“We’re concerned that this will get worse before it gets better,” Narkewicz said of the financial ramifications of the pandemic. “We have reserves but if we want them to last and help sustain us through this, it would be imprudent to use a large amount of them at this early, unknown stage.”

Greta Jochem can be reached at gjochem@gazettenet.com.




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