City expenses are outpacing revenues with the limitations of Proposition 2 1/2 and record high inflation. Simply maintaining level services has become a challenge if not unrealistic with current revenues. In the FY24 budget almost half of our city departments took a reduction or less than a 2% increase in their overall budget. We are taking aggressive action to mitigate the impacts of this financial pressure from all angles.
What have we accomplished?
Maintained our AA bond rating with S&P Global Ratings in the midst of the pandemic and a volatile market, which was reaffirmed in 2021 and 2023. Bond ratings impact our interest rate and ability to borrow funds for capital projects.
Initiated borrowing for the Shay Memorial project early while interest rates were low and projections showed increases coming. If we had waited and been impacted by today’s interest rates this could have cost taxpayers nearly $6M more than it will now.
Passed a tax incentive designed to keep Munters, our largest employer, in Amesbury. This was a joint effort with the City Council to keep the jobs they have now and the ones they will create through a relocation and expansion in our community while adding substantially to our tax base.
Leveraging economic development strategies like the Smart Growth (40R) development zoning for the East End Smart Growth Overlay District that provide better development options for the neighborhood with the benefit of financial incentives to the City, impacting our bottom line.
Utilized one time funds on one time capital expenses to lessen the burden on taxpayers and focus on deferred maintenance, like the Middle School roof.
Completed a Comprehensive Review of Municipal Fees with the Collins Center and have started updating fees that were found to be extremely outdated, in some instances our fees had not been updated in over 30 years. These fees are not just applied to local homeowners, they include fees charged by the Clerk's Office, Fire Administration, Treasurer/Collector, and Harbormaster, and have the potential to add nearly $200,000 to our annual budget.
Advocated for additional funding for our schools through formula (Ch 70) funding and alternatives (earmarks) with state legislators and officials through visiting the State House, in person, and virtual meetings.
Secured almost $10M in grants to offset the taxpayer burden for capital expenses.
Hired the first Human Resources professional in City history and have implemented best practices and new policies to control administration of benefits and accruals. Personnel expenses and benefits comprise approximately 68% of our budget and having professionals and controls in place is critical to protecting taxpayer dollars.
Established the OPEB Trust Fund and started funding this otherwise unfunded liability. Simply starting the fund provided a financial incentive and compliance with state law.
Upgraded and implemented new technologies to improve transparency, including ClearGov. You should know where your tax dollars are going and this platform lets you input the amount you pay to see the breakdown of where that money is used in our City budget.
Overhauled the City's budget book and annual report to provide added transparency about the process, taxes, and spending.
The City needs to expand its tax base. To do so we will continue to leverage economic development tools like the 40R we’re using for the East End Smart Growth Overlay District and focus on reuse and infill development. You’ll see buildings start to change shape and size to better fit the neighborhood and boost property values.
Munters is expecting to be fully operational in late 2024. They will be adding 70 new jobs over 3 years to the ~300 they currently have. One third of those are current Amesbury residents. The City is expecting tax revenue to increase by $141,000 in just the first two years, $5M over the life of their TIF agreement. After which, taxes on the improved property will continue to contribute significant revenue to the City.
Our team is engaging in revenue forecasting in a way that hasn’t been done before. With millions of dollars in approved projects and anticipated new growth and the simultaneous exponential growth in inflation and expenses we are watching things closely and preparing for budgets that get more challenging every year.
We will continue to aggressively seek grant funding where and when appropriate. Proper management and reconciliation for full reimbursement is required and as our grant revenue increases we will need to determine how best to handle this. We do not have a grants manager or writer on staff, all grants received are written by the corresponding departments.
As a School Committee we are closely watching enrollment and finances for our public schools. We have made it a goal this year to activate a committee for assessing short- and long-term strategies for the success of our district under forecasted budget pressures. This includes the use of our space and our enrollment strategies and partnerships.