NORTHAMPTON — Mayor Gina-Louise Sciarra announced the creation of a new climate action department, following on the heels of the city’s climate stabilization fund, at a joint meeting Tuesday with the City Council and the School Committee.

At the virtual meeting held over Zoom, the mayor previewed the budget for the coming year and gave a presentation on the financial health of the city.

The joint meeting is held every year near the end of January and offers the mayor a platform for addressing the state of the city’s budget and expenses, laying out the financial condition of Northampton going into the 2024 fiscal year.

Sciarra showcased a slide show of more than 40 pages detailing the financial state of the city, the distribution of the city’s revenue sources and where that revenue was spent.

According to the mayor’s presentation, taxes made up 70% of the city’s revenue for its general funds, with 63% of those taxes coming from real estate. State revenue made up the second-highest source with 15%, with charges for services making up 11% of revenue. Other sources included interfund operating, licenses, permitting, fines and federal revenue.

Education made up the biggest source of the city’s budgeted expenses, receiving 41% of all expenditures, or around $45 million. Other large outlays went to city employee benefits at 20% ($22 million), public safety at 13% ($14 million) and general government at 6% ($6 million).

The mayor also went over the state of the city’s financial reserves, used for one-time expenses or emergencies. The city recently created a new reserve, the Climate Change Mitigation Stabilization Fund, which currently has $3 million in reserves.

“The purpose of this fund is to plan for cost implementation of our climate resilience and regeneration plans, including design and strategic planning,” said Sciarra. “Projects to decarbonize our buildings, especially the schools, to get to net zero are extremely expensive, so we want to make sure we’re earmarking funds for these goals.”

While on the topic of climate, Sciarra also announced that she has given an administrative order creating a new Department of Climate Action and Project Administration. The order must be approved by the city council in order to be officially created.

“This department, with careful plan use of the climate change mitigation stabilization funds, will guide the city’s efforts to realize the goals outlined in the Sustainable Northampton Comprehensive Plan,” she said, referencing the city’s outlined goals for achieving an environmentally friendly future.

Sciarra also shared that the city enjoys AAA bond rating by Standard & Poor’s, a higher rating than many other surrounding municipalities such as Amherst, Easthampton and Holyoke. The high bond rating allows the city to borrow at lower interest rates than other nearby areas.

“This provides the city flexibility in times of crisis, allows us to maintain a robust capital improvement plan, and maintain and upgrade our infrastructure,” Sciarra said.

One area where Northampton saw declining revenues this year was in the cannabis excise tax, with revenue currently at $454,000 for 2023, compared to $1.1 million the previous year and $1.3 million the year before that. The city recently imposed a cap on cannabis dispensaries, limiting the possibilities for new revenue to come in via the excise tax.

“We are seeing a continued decrease in cannabis excise as the market has become more diffused in the commonwealth,” said Sciarra. “I expect that we will continue to see a decrease in this revenue source.”

Alexander MacDougall can be reached at amacdougall@gazettenet.com.

]]>