Easthampton to use built-up reserves to help cover $57.1M budget next year

 Easthampton Municipal Building

Easthampton Municipal Building GAZETTE FILE PHOTO

By ALEXA LEWIS

Staff Writer   

Published: 05-07-2024 6:08 PM

Modified: 05-07-2024 6:30 PM


EASTHAMPTON — As several other Hampshire County communities have spent the spring budget season grappling with how to overcome significant funding gaps brought on the expiration of support from pandemic funding, the city of Easthampton is sitting on reserves that it saved during the COVID era for a “rainy day.”

Mayor Nicole LaChapelle’s city budget proposal for fiscal year 2025, which she presented to the City Council on April 17, comes in at about $57.2 million, 9.28% or $4.8 million more than the current year. The city is able to absorb this increase because it has built up stabilization accounts to “historical levels,” the mayor said in her budget message to the council.

In fiscal year 2023, the general stabilization fund and capital stabilization fund were larger than at any other time in the city’s history, at $5.9 million and $4.3 million, respectively. The amounts saved in these funds over fiscal year 2024 are pending certification, but are even larger.

The money in reserves, coupled with expected growth in other areas, gives the city “funding solutions,” she said. About $1.8 million of the $4.8 million budget increase will come from these stabilization funds, and the rest will come from the city’s anticipated growth over the next year.

“As federal COVID recovery fund awards started, I pursued aggressive funding of our    stabilization accounts, preparing for the year federal dollars would end, creating a gap between expenses and revenues,” LaChapelle wrote. “Fiscal Year 2025 is that year. With combining financial forecasting and intentional saving, the city has a prepared solution to this budget gap.”

The current 2024 budget primarily focused efforts toward hedging  against inflation, but grants received over the past year have freed up money for the city’s general fund and capital expenses in fiscal year 2025.

“I must point out that the city’s fiscal pliability comes only with historical City Council support for robust allocations to reserve accounts and through review of requested appropriations for unsure city expenses,” said LaChapelle.

She also stated that the city’s robust reserves “represent funding for major city capital projects and local grant matches for significant state and federal infrastructure awards.”

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In addition to these reserves, the fiscal 2025 budget assumes increased local receipts due to previously planned increases in parking fines as well as inspection and permit fees. LaChapelle also expressed an emphasis on continuing and expanding grant efforts for post-COVID development.

“Current economic, social, and political factors weigh heavily on our residents’ quality of life,” said LaChapelle. “Fiscal Year 2025 is not the year to pull back services we committed to all residents during post-COVID recovery. In the face of continued (some may say increasing) uncertainty, my proposed budget keeps promises to support our city and residents.”

Education budget

As in most years, education expenses make up the largest share of the proposed 2025 budget. The school district’s budget is proposed to increase by 9.78% to $20.68 million. If approved, that amount would be 36.2% of the overall budget.

Easthampton Public School District leaders expressed in budget negotiations that they were focusing on maintaining existing positions rather than funding new ones next year. Significant increases in the education budget will cover an increased need for out-of-district and vocational student tuition; an expected increase in electricity costs, specialized transportation, and salaries; and the expiration of COVID relief funding.

School officials describe the budget as “needs-based” and “one that seeks to align personnel and services as students continue to recover from pandemic-related learning loss and trauma.”

No layoffs, cap spending

Like last year, LaChapelle gave department heads two directives this budget season: Don’t cut positions or wages, unless it is best for their departments, and keep the increase in expenses to 4% over the current year.

Details of the proposed budget are broken down into 10 categories: general government, public safety, education, public works, human services, culture and recreation, debt, unclassified, Community Preservation Act and enterprise.

Of these categories, all but human services and the CPA fund are slated for increased funding over fiscal year 2024.

Human services, which includes the Health Department, Council on Aging, and Veterans Services, is proposed to be cut by 9.64%. This is because none of these three departments spent all of the money budgeted for them in the current fiscal year, and the fiscal 2025 budget was adjusted for that fact. Funding for the CPA fund will be cut 3.13% due to slightly lower expected costs by the Community Preservation Act Committee.

Among the remaining categories, general government is proposed to receive the largest percentage increase, up 24.6% to nearly $3.6 million. This increase is due to contractual raises and collective bargaining agreements that resulted in increased employee insurance benefits and “increased robust financial and wellness employee programs.” Included in this category are the City Council, mayor and city attorney, licensing, assessor, auditor, treasurer and central purchasing, technology, collector, human resources, city clerk, elections and registrations, planning, and building operations.

Public safety will receive $8.5 million in proposed funding, which is an increase of 14.7% from the current year. This section of the budget includes police, dispatch, fire and ambulance, and building and inspection services.

Public works, which includes the Department of Public Works, Cemetery, and Tree Warden, is proposed to receive $2.3 million, an increase of 8.36%. Culture and recreation, which includes the Easthampton Public Library and Parks and Recreation, is proposed to receive a 7.2% increase at $772,700.

The unclassified section includes contributory retirement, workers compensation, Medicare, employee benefits, liability insurance, reserve funding, and unemployment, and is proposed to experience a 4.99% funding increase at $11.44 million.

The enterprise section concerns the city’s water, sewer, and wastewater treatment plant utilities which are overseen, maintained, and operated by the DPW, and is proposed to receive a 7.65% increase at $3.16 million.

Sections of the fiscal year 2025 budget are currently being reviewed by the Easthampton City Council Finance Committee. The budget will return to the larger council for a vote on June 1.

Alexa Lewis can be reached at alewis@gazettenet.com or on Instagram and Twitter at @alexamlewis.