The second installment of the 1/12th budget will be submitted to the City Council on Aug. 1 as the City continues its month-to-month budgeting plan in the wake of uncertainly over state aid.
City officials premiered the new budgeting plan in July at the beginning of the fiscal year, and also introduced some layoffs and reduced hours for employees – trying to keep to a minimum cuts to services. That budget will remain the same in the second installment, CFO Eric Demas said this week.
“There’s no real tremendous changes from the July spending plan,” said Demas. “We’re submitting the same budget with some minor tweaks in conjunction with the union. We’ll submit it on Aug. 1 and we’ll submit a continuing appropriation on Sept. 1. In the same time period, we’ll be submitting a traditional budget so the City Council can review it and go through the traditional process in September and have a traditional budget in place for Oct. 1.”
The big issue is that there are few answers coming from the state about what Local Aid will be like for the current fiscal year – an amount which makes up a majority of the City’s budget. Some municipalities have passed regular budgets with the assumption of cuts to Local Aid, while Everett has taken it month by month to see what happens at the state and federal levels.
“Right now, we’re foreseeing about an $8 million shortfall in our budget,” said Mayor Carlo DeMaria at Monday’s City Council meeting. “My goal is not to raise taxes, but to keep taxes level. Taxpayers will not be seeing any increases in taxes this year…We’re hoping we’ll have more information in August to determine who will come back and who won’t.”
As an aside, the mayor also said City Hall has been more efficient during the pandemic, and perhaps had too many workers prior to COVID.
“We’ve been working more efficiently,” he said. “We saw through the pandemic a lot of people can work remotely or on reduced hours. We’re working efficiently. The walk-up window is one stop shopping and very efficient. It works out that we may have a few too many employees. My goal is to not fill positions by attrition.”
Additionally, budget gaps have been filled by voluntary retirements, such as Frank Nuzzo and Al Borgonzi. The mayor said more can be expected.
Demas said the Financial Office is currently looking at revenues that were received in the 4th Quarter, which was disrupted entirely by COVID-19 restrictions. He said they had a good deal of activity in the last few days of June, and are still processing tax bill payments.
That will give them a better idea of how much was collected, and how much has gone unpaid.
“At first glance, we had a tremendous amount of activity the last week of June,” he said. “We’re in the process of finishing that out. I have a very strong understanding of where we are, but I don’t want to do anything until I know the numbers are 100 percent accurate.”
He said there were a lot of mortgage companies that sent in payments on the last two days of June, and he indicated they squeezed three months of work into one week.
He said he did expect to set the tax rate this year at the traditional time in late fall, which he said was very important for consistency.
Meanwhile, all eyes are on the State House and any announcements that might come about Local Aid numbers – whether they will be cut, level funded, or miraculously, increased. Much of that has to do with the federal government and the current HEALS Act – otherwise known as Phase 4 of the COVID-19 federal stimulus.
“The state doesn’t look like it will be able to provide numbers to us by the end of August – maybe September,” he said. “Maybe it will be sooner and we hope so. We don’t want to continue this any longer than we have to.”
Encore payment getting streamlined with the state
Last week, it was announced that Encore Boston Harbor paid two quarters of its host fee to the state rather than directly to Everett, putting a kink in what was understood in the agreement.
CFO Eric Demas said he has had great success over the past week working with the state to help them understand that Everett needed and expected the money so they could close out last fiscal year.
The amount was more than $10 million.
“They do understand that this is a deviation from the norm,” he said. “We haven’t discussed it with Encore yet, but we’ll adjust moving forward to make sure whatever method they use, we’re all on the same page.”