Mayor Melinda E. Barrett’s budget for the year starting July 1 grapples with large costs like several labor contract settlements and the $152 million Dr. Albert B. Consentino School building project.
The tight budget, which Haverhill city councilors still must approve, was drafted recognizing the impending end of federal American Rescue Plan Act money.
City Chief Financial Officer and Auditor Angel A. Perkins was quick to point out at Tuesday night’s council meeting the city is not using the aid for any recurring expenses, rather it has bought $24 million in federal bonds, and is earning over $1 million on the investments each year. However, as required, the city will spend the money on one-time capital improvements by 2026 and can no longer rely on the revenue each year. Council President Thomas J. Sullivan asked for a full explanation of its intended use at a scheduled budget hearing. The draft city budget is scheduled to be posted online Friday, May 17.
To compensate, Perkins said the amount the city raises through property taxes will increase by 8%, or $10 million. The city also expects to use up to $4 million of a reserve called “excess levy” to recover amounts it was allowed to previously tax, but didn’t.
“This is a big jump,” she said of the proposed increase.
Per one of the mayor’s policies, according to Perkins, the operating budget aims to meet recurring expenses with recurring revenues. The main exception is so-called “free cash.” Drawn from budget surpluses of previous years—when actual revenues come in higher and costs lower than projected—she said the city used $6.3 million this year, more than it should have. She estimated the city would stop relying on the pot of money within 10 years. The draft budget counts on $800,000 less than the current year.
Another of the mayor’s policies is to stop deferring costs, which creates the illusion of a healthy budget.
Perkins said, “Delaying building and equipment maintenance or postponing the costs of operations are two of the most common procedures used to artificially create the appearance of a balanced budget. These actions merely pass today’s costs onto future taxpayers and residents, and these costs usually grow as they are deferred.”
Councilors praised the commitment to stop “kicking the can,” as Perkins put it, as well as the transparency of this year’s budgeting process compared to those of previous years.
“It was very informative. It was collaborative. We could toss information back and forth. It wasn’t just always one way and that was it,” Councilor Colin F. LePage said.
Perkins agreed with the assessment, noting how heads of city departments gave comments on the final number presented to their team.
“We’ve taken a lot of steps to include, as you know, city council members, also members of the school department, as well as the mayor’s office, which is a complete change from the last two budgets I’ve done with the city,” she said.
The city pledged $800,000 to Haverhill Public Schools, which is grappling with cuts as it stares down an estimated $11.1 million deficit. As WHAV reported, School Committee members argue the state owes the district a cumulative $19.2 million for failing to account for rising counts in recent years, a claim communities across Massachusetts have made.
Budget hearings with city departments will be held May 22 and 28-30, and Perkins said she hopes to receive council approval June 4.