Haverhill had a surplus of about $9.5 million, as certified at the end of October by the Massachusetts Department of Revenue.
Mayor Melinda E. Barrett’s office said the amount, known as “free cash,” represents a 37% increase, or $2.5 million, compared to last year’s certification. The administration said the surplus comes from a combination of “revenues exceeding budget targets and operating expenses falling below budget.” It added the surplus increase is part of a multi-year strategy “aimed at reducing the city’s reliance on one-time funds to cover ongoing expenses.”
“This approach is necessary to ensure the city’s finances remain strong and sustainable,” Barrett said in a statement. In the current budget, the administration said it used 14.4% less in one-time money, with the goal of using no more than 20% of such funds in accordance with policy.
The surplus was announced a day after city councilors set property tax rates.
Barrett’s office said, “S&P Global recommends that a community’s general fund unreserved balance be between 5% and 15% of operating expenditures. This latest certification places the city at 4.8%, just under S&P’s benchmark but a notable increase from the previous fiscal year’s rate of 4.1%.”
In another financial report, Chief Financial Officer Angel Perkins said the city will pay an average interest rate of 3.53% to borrow more than $51 million to pay for various long-term projects, including construction of the new Dr. Albert B. Consentino School. The borrowing is financed by a 20-year general obligation bond.
Perkins said the city received competitive bids from bond underwriters at the end of last month with Mesirow Financial emerging as the winning bidder. Perkins estimates that the city will save over $23 million in interest costs compared to projections from just a year ago.
Before the sale, S&P Global Ratings, a credit rating agency, affirmed the city’s “AA” long-term underlying rating. The agency cited the city’s stable local economy, balanced operations, robust budgeting practices and long-term planning as positive factors contributing to the rating.