After hearing from a state representative of the Department of revenue, as well as Mayor Thomas McGee and Michael Bertino, City’s Chief Financial Officer, the City Council approved a request from the mayor to borrow $4.5 million from the remainder of the city’s bailout budget.
Mayor Thomas McGee said without the money the city would not have a balanced budget, nor would it be able to set the tax rate or send out tax bills to property owners.
“We didn’t get here overnight,” McGee said. “I believe this will give us the best chance to move forward toward a stable, stronger budget in this cycle.”
The loan was given to the city through legislation, a home rule petition approved earlier this year by the council, state legislature, and signed off on by Gov. Charlie Baker. The loan helped balance the FY18 and FY19 budgets but officials are still concerned about the FY20 budget where it could still have a budget gap with $5 million. Even with this borrowing, the city is short $1.1 million.
City Council President Darren Cyr said officials initially talked about borrowing as much as $23 million to get out of FY18, FY19 and FY20, but most felt that $14 million would be enough.
Looking at areas of the city budget, Sean Cronin, the fiscal stability officer for the city, provided by the State Department of Revenue, noted several areas that should be looked at to save money and also make it possible for putting money in the stabilization fund and for capital improvements.
“Health insurance has to be looked at, the city has to look at options,” Cronin said. Healthcare costs are carrying a deficit of $400,000.
He also stated that the Department of Revenue has noted that the city has not met its “net school spending requirement” in years. Increasing school enrollments and the need for the city to invest in capital projects, contract agreements leave only about $1 million in free cash.