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Date: 7/25/2023
EASTHAMPTON — During a special meeting on July 17, the Easthampton City Council approved two financial transfers to wrap up fiscal year 2023.
The two requests were for $13,885 to cover an end of the fiscal year budget accounts deficit. This transfer would come out of the reserve fund to the mayor clerical account, the legal account, the building inspector clerical account and the building inspector alternate account. Most of the appropriation would be going to the legal account in the amount of $9,090.
The second transfer request was for $256,340 to cover and end of fiscal year deficit in the building operations and streetlights budget. This transfer would come from police salaries, police overtime, police crossing guard, dispatch salary, the DPW fuel account, highway salary, highway overtime, fire salary and veterans benefits and would be going into the building operations heat and power, building operations maintenance, building operations house supplies, building operations repairs and streetlight energy accounts.
Councilor Daniel Rist explained why the council was approving these financial transfers after FY23 had come to an end.
“We’re in the first 15 business days so today is the last day we can do this. This is to make our budgets whole, so that’s why we can do this tonight and need to do it in one meeting, or the budgets are in deficit, and they are not supposed to be,” he said.
City Auditor Hetal Patel explained that the large transfer for the deficit in the Building Ops and Street Lights budget was a result of solar credits coming in late in the planning for FY23.
“The plan was to go to City Council to ask for an appropriation as these particular departments were going to be negative. We were also getting check credit and by Mass. General Law it needs to go to the general fund, and it needs to go to free cash before we can use that money,” she said.
Patel explained that the check previously came as a credit, which is why its use is delayed. She also described the process the city took to come to the decision to transfer the money from other departments.
“We were looking to using the existing money instead of taking money from free cash to set forth the budget. We were successful to use that money. What we did was we talked to the community, we talked to external auditors, it took a little more time than expected,” she said.
Councilor Brad Riley said he was concerned about last minute transfers following some that were made at the end of the last fiscal year.
“I feel last year we had people from our departments submitting things at the very last minute when they didn’t need to, they could have done it earlier. I just want to make sure because I know how incredibly difficult your job is and any opportunity to ensure that our auditors and treasurers, and people that work for the city aren’t having to crunch things at the last minute, that’s what my goal is,” he said.
Patel said that the last-minute nature of the transfer could not be avoided for this year.
Rist added that the council needed to approve the transfers, so the burden did not fall on the taxpayers.
“The main reason we need to do this is the tax recap, because if we do not cover our deficits, it affects the taxpayers directly on this year’s taxes because we have a deficit. That’s just the way the [Department of Revenue] and Mass. General Law works. $256,000 is a hit to the taxpayers and how it’s all calculated,” he said.
Rist also explained that the money being allotted was a transfer and not a new expenditure.
“This is not a new appropriation, transfers come from budgeted money that was voted last year and approved in their budget and then the department heads and the auditor move the money to cover the deficits at the end of the year,” he said. “So, it’s not new funds that we’re reappropriating from free cash and stabilization accounts, it’s money we’ve already said yes to.”
While smaller deficits are sometimes able to be made up within a department’s budget, Patel explained the deficit was too much for the department to take on its own.
“This department was over a huge amount and because they couldn’t support their own department, that’s why I had to take money from another department,” she said.
When asked by Councilor JP Kwiecinski about planning for next year to avoid another last-minute transfer, Patel said she was planning ahead of time.
“If it’s going to happen in [FY24] I already told the mayor and department heads that as soon as free cash is certified for FY24 the first thing that needs to go to City Council is an appropriation for solar credits,” she said.
Kwiecinski estimated that based on that timeline, any necessary transfer for the solar credits would be done in November or December for FY24.
The council unanimously approved both financial transfers.
The Easthampton City Council’s next regular meeting is scheduled for Aug. 2.