12-06-21 memo from susan wright - budgetary transfers

7/31/2019 12-06-21 Memo From Susan Wright - Budgetary Transfers

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CITY OF NORTHAMPTON

SUSAN WRIGHT

FINANCE DIRECTOR

Office of the Mayor210 Main Street Room 12

Northampton, MA 01060-3199

(413) 587-1255 Fax: (413) 587-1275

[email protected]

MEMORANDUM

TO: City Council

FROM: Susan Wright, Finance Director

DATE: June 15, 2012

RE: Report to City Council for June 21, 2012

1. Borrowing Order Rescissions: As a matter of housekeeping, three orders for borrowing

authorizations will be presented to council for rescission. Copies of the original order are

attached to this report. They rescissions are as follows:

a) September 2, 2010 - $757,576 Bean Allard CPA Project: The original order for the

$910,000 Bean Allard project was voted in March 4, 2010. In September, another order, which

broadened the scope of the original order, was passed but it was never intended to increase

the total amount for the Bean Allard project. Ultimately, when the Bean Allard project was

bonded in February 2012, the $910,000 that was bonded was done so under the March 4, 2010order. Therefore Council can rescind the September 2, 2010 order.

b) July 7, 2011 - $850,000 Mineral Hills Project: The project ultimately was funded via

a state LAND grant, CPA project funding and fundraising. Therefore, the borrowing

authorization can be rescinded.

c) July 7, 2011 - $781,250 Florence Fields: This authorization was no longer needed

once the Council voted a new authorization on December 15, 2011 for $1,957,000 for the

Florence Fields project. The December 15, 2011 authorization was further reduced to a

$1,200,000 authorization with the receipt of a PARC grant for $757,000.

2. Budgetary Transfers for FY12:

a) The first set of transfers is to cover deficits in some FY12 budget line items with

surpluses in other FY12 budget line items. The request to move $11,000 from Parking

Maintenance permanent salaries to Parking Enforcement permanent salaries is due to

additional Parking Enforcement staff being brought on to increase shift strength during critical


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times such as Saturdays and to provide coverage during staff vacation and sick time. The

surplus in the Parking Maintenance salaries line item was due to the retirement of the Parking

Director. The request to move $33,000 from Interest on Notes to Repayment of Temporary

Loans was due to a rearrangement of expenditures in different categories during the bonding in

February. The request to move $35,000 from Workers Compensation and $15,000 from Police

and Fire Accident to Medicare is due to additional unbudgeted Medicare costs being coveredwith surpluses in insurance accounts due to credits from the insurance company.

b) The second set of transfers is to cover deficits in some FY12 budget line items with

the Undesignated Fund Balance (Free Cash). The current balance in free cash is $734,490 and

after these transfers, the balance will be $537,695.

$500 to Mayors Office PS due to 26 pay periods being budgeted, not 26.1

$675 to Assessors Office PS due to 26 pay periods being budgeted, not 26.1

$2,500 to Treasurers Office PS coverage during FMLA leave

$85 to License Commission PS due to 26 pay periods being budgeted, not 26.1

$2,200 to Building Inspectors PS majority due to 26 pay periods being budgeted, not 26.1

$6,300 to Building Inspectors part-time PS additional hours for part-time staff needed during

emergencies and to provide necessary coverage

$170 to Emergency Management PS due to 26 pay periods being budgeted, not 26.1

$14,000 Snow and Ice PS Overtime for snow removal

$120 Arts Lottery PS due to 26 pay periods being budgeted, not 26.1

$350 Other Employee Benefits Social Security over budget by that amount

$7,000 Other Employee Benefits Sick Leave Buyback exceeds original budget more

separations than anticipated

$35,722 Forbes Library PS reversal of earlier budget reduction due to ESCO funding see

explanation below$3,473 Lilly Library PS reversal of earlier budget reduction due to ESCO funding see

explanation below

$8,000 Veterans Benefits benefits for veterans will total an estimated $628,000 for FY12

$30,000 Police Fuel higher fuel prices have impacted this department and left a shortfall

$6,000 Treasurer Legal more tax title activity this year - $274,000 in tax title revenue has

come in this year, which is $100,000 more than last year

$700 Legal Judgments this is for mailbox and other claims

$50,000 Legal Counsel estimated costs for remainder of the year

$25,000 Snow and Ice Vehicular Supplies repairs to vehicles

$4,000 Central Services Street Lights over budget

The two transfers to the libraries - $35,722 to Forbes Library and $3,473 to Lilly Library are to

return the funds that were transferred out in December when we set the tax rate. The original

plan for the ESCO financing depended on departmental budgets turning back the estimated

savings from the ESCO projects. When the city set the tax rate in FY12, the Department of

Revenue did not accept the financing mechanism the city devised and therefore required that

City Council reduce appropriations to various departments rather than relying on turn backs


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from departments. This created a new problem for our libraries. In order to maintain

certification and eligibility for state grants, both libraries must meet the Municipal

Appropriation Requirement set by the Board of Library Commissioners, otherwise known as the

MAR. Reducing the appropriation to the libraries in order to set the tax rate affects the MAR

for FY12 and if left at the reduced amount, could result in decertification of the libraries in

FY13. Therefore, we must return the reduced appropriation in FY12. This means the librariesdid not contribute to the ESCO debt service in FY12. In discussions with the State Board of

Library Commissioners, it has been clarified that debt service does not count in calculating the

MAR and therefore this will continue to an issue in years going forward.

c) Additional Transfers to close FY12: There will be additional orders and transfers for

the July 12, 2012 meeting to close out Fiscal 2012 that will require two readings that evening.

The auditor and I have done our best to identify as many transfers as we can up to this date.

12-06-21 memo from susan wright - budgetary transfers

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