Mayor Narkewicz Issues Spending and Hiring Alert to City Department Heads
With some city revenues falling short and free cash at an histsorically low level, the mayor tells department heads to tighten their belts. Until further notice,there will be no spending over $250 and no new hiring without an OK from Room One.
By DAVID REID
NORTHAMPTON – Mayor David Narkewicz today sent a “spending advisory” memo to all city department heads warning them about the city’s dire financial situation, halfway through Fiscal 2012, with revenues dwindling and expenses rising.
While he stopped short of instituting either a spending or hiring freeze, Narkewicz – sworn into office only 23 days ago – stated that he will review all future job postings, and that all significant spending is curtailed without prior approval.
In the two-page memo issued this afternoon, the mayor said projected revenues “in several key accounts” are coming in below expected levels. At the same time, he said, several accounts that are historically underfunded in the annual budget and require infusions from free cash during the fiscal year – such as veterans benefits, snow and ice removal, Fire Department overtime, legal services and unemployment – will eat up almost the entire free cash account before June 30, the end of the current fiscal year.
“It is apparent that free cash will be needed to balance the budget,” he said.
The city’s current (Fiscal Year 2012) operating budget is pegged at $77.3 million.
With free cash recently certified at just over $1 million for the year and expected transfers totaling $975,000 (not to mention unanticipated emergencies), Narkewicz said, department heads must squeeze the most out of their budgets over the next five months. And spending, he said, will be micro-monitored out of the office of the mayor and finance director.
As a result, “all purchases above $250 will require prior approval from my office before funds are committed,” not counting the paying of utility bills, capital projects and contractual agreements, Narkewicz wrote in the memo.
“While a hiring freeze has not been implemented, I will be reviewing every vacancy prior to posting of the position,” he said.
“I ask you to consider the necessity of every expenditure before it is made,” Narkewicz continued. “My goal is to increase departmental turn-backs at [Fiscal 2012] year-end to provide additional reserves for FY13.”
(To see the entire memo, along with the latest projections for state aid, click here.)
Narkewicz also reminded department ehads that the budget-building process for Fiscal 2013 will start all over again early next month.
City Finance Director’s Latest Report to City Councilors
According to City Finance Director Susan Wright, projected revenues (upon which the budget was based) are down for the building department (including building permits, electrical and plumbing fee receipts); also parking ticket receipts are flat, although parking meter receipts are up. She said the city’s hike in both parking meter hourly fees and parking ticket fines (up from $10 to $15) are factors in those line items.
According to a detailed financial report Wright prepared for the Jan. 19 City Council meeting, the current budget’s free cash account – designed to fund unbudgeted and unanticipated expenses throughout the fiscal year – is the second lowest in the past 12 years. In Fiscal 2006, free cash was certified at $4.2 million, four times that of the current year.
(To see Wright’s written report on the first six months of current year’s operating budget, click here; to view numerous charts and tables she included, including free cash and overtime expenditures by department, click here .)
© 2011 Northampton Media
David Reid can be reached at email@example.com