On Tuesday, July 19, a proposed supplemental budget for FY23 was submitted to the City Council – to review, visit: https://docs.google.com/spreadsheets/d/1Kh_18g8g1YRrdH5lLqqNbOhh_mrSW27M9Yj96kxy3Ds/edit?usp=sharing
The updated figures are based on current revenue and expense projections to-date including revenue figures from the senate preliminary budget proposal, which was voted on July 18, 2022; and an understanding of Holyoke’s municipal service needs. The budget does not propose a Proposition 2½ override or any reduction in services, and concludes a surplus.
The original proposed city budget submitted in June 2022, we exercised fiscal restraint to preserve gains so we can better mitigate potential shortfalls and continue to improve our management of capital needs. This proposed supplemental budget helps us to achieve these goals. A balanced budget was submitted with an excess capacity of $779,876. Not long afterwards, revenues were updated. The result: a surplus of $1,110,221.
In this supplemental budget, we are proposing an additional $787,908 to operate in FY23. This supplemental budget remains balanced and with updated revenues we are expecting a new surplus of roughly $1.1 million. Included in this surplus figure is ARPA revenue replacement that will be submitted for vote to the City Council at the next scheduled City Council meeting.
Because of the continuation of conservative estimates of receipts and new growth potential not yet realized, our excess capacity may be greater than anticipated. As you’re aware, the budget is a moving target with new revenue projections being realized every day while unanticipated changes to operations and services continue. We will know more of our revenue capacity and needs as we get closer to the end of the calendar year when we set the tax rate. I look forward to collaborating with the City Council and revisiting the budget at that time to make the necessary changes where feasible to maintain a reasonable tax rate.
Below I have outlined changes reflected in this supplemental for FY23:
- The largest increase is to close the budget shortfall of the city’s share for early retirement incentive. The additional $364,200 brings the total to $12,430,567.
- $48,000 increase of liability and damage insurance to close a budget shortfall.
- New position at Building Department for Sealer of Weights and Measures: $60,000.
- Increases due to newly negotiated union contracts, specifically with NAGE and DPW Laborers. (See MOUs.)
- 2% increase in non-union salaries.
- $16,000 increase to the General Superintendent line item to attract qualified interim candidates by offering a higher salary.
- Minor adjustments (increases and decreases) in salaries throughout.
- Eliminated funding for vacation and sick leave buyback where appropriate and able.
- Increased the Advertising line item for Personnel by $4,000 to total $5,000.
- $10,000 increase for postage at the Treasurer’s office: Total $30,000.
- $3,400 for overtime line item at OPED to be supported with a $1,600 transfer from longevity to total an overtime line item of $5,000.
- A new position at the Police Department: Grant Manager. This civilian position will take on grant responsibilities for the department and free up the officer who has been managing grants. This assumes the Council supports adding the position to the Appendix A of sec. 2-35 of the City Ordinances.
- $4,000 addition for the legal defense fund, which is an average of what has been spent before.
- Increase repair and maintenance of motor vehicles at the Fire Department by $5,000 to total $45,000.
- Increase Information Technologies at Fire Department by $6,000 to bring total to $32,000.
- Increase Medical at Fire Department by $6,000 to total $10,000.
- Increase in supplies for motor vehicles at Fire Department by $3,000 to total $35,000.
- Eliminated tree climber position. The union refused to negotiate a salary to attract qualified candidates for this position. Therefore, instead we are proposing to increase the Contract Forestry Services line item by $55,000 to total $60,000 so we can outsource and get some tree work done.
- Increase in Repair and Maintenance line items at Auto Equipment and Maintenance and Refuse Collection each by $35,000 to keep up with ongoing maintenance and also to catch with deferred maintenance.
- Increase professional health services line item at Board of Health by $5,000 to total $10,000.
- $5,000 for maintenance of Pouliot Pool.
- $3,400 for insurance line item at Wisteriahurst to insure the contents inside the building not covered under the city’s insurances.
There are still other union contracts we are negotiating and will require a funding strategy. Once I am clearer on what our financing position is and what the agreed upon terms are looking to be, I do look forward to presenting a strategy to the council before calendar year end to honor union commitments. We are actively working on a capital improvement plan and a three to five year forecast we should have ready by then to better navigate through these decisions.
In addition to what we are looking forward to accomplishing, I’m seeking support from the City Council to transfer the most recent deposit of $1 million into stabilization over to the newly established Capital Stabilization. Once our capital improvement plan is complete, I look forward to working with the City Council to fund important capital needs.
Lastly, the City Council supported in the budget an Assistant Chief Procurement Officer that was never added to Appendix A of sec. 2-35 of the City Ordinances. Adding to the ordinance will allow the Personnel Office and the Chief Procurement Officer to proceed forward with securing a qualified candidate to fill the position.
We will know more of our revenue capacity and needs as we get closer to the end of the calendar year when we set the tax rate. I look forward to revisiting the budget to make the necessary changes where feasible. This means we need to work together to watch trends in the budget and shift focus where we need to so that we are keeping up with our obligations while ensuring fiduciary responsibility to our citizens.
In closing, I want to share with the public the pleasure it has been working with each of the City Councilors! They have been extremely supportive and also helpful to meet the needs of constituents. However they decide to offer support in this supplemental, I will be sure to work within the limits of what’s made available.
Respectfully,
Joshua A. Garcia, Mayor