HAVERHILL — Additional costs imposed by the state are going to impact the city's budget this fiscal year, but city councillors say they plan on adding more police officers anyway.
In a recent memo sent to members of the City Council and School Committee, Mayor James Fiorentini said that the city will only end up receiving a modest $1.3 million increase in aid from the state under Gov. Charlie Baker's proposed $40.9 billion state budget released last month, just over 2 percent from the state budget for the 2018 fiscal year.
Under the governor's proposal, Haverhill will receive just over $10.1 million in unrestricted local aid. The city will receive $54.3 million in money through Chapter 70, the state's education aid fund.
"The governor’s proposed budget is the starting point in the state budget," wrote Fiorentini to the council. "It is common for state aid and assessment amounts to change from this point, but the governor’s budget is usually the floor. The changes made by the Legislature do not generally move the amounts dramatically."
Haverhill will receive $2.3 million more from the state, but the city will also have to pay an additional $1.1 million back to the state for various fees, the largest coming in the form of a tuition the city pays when students attend charter schools. The $1.1 million that raises the total amount Haverhill owes the state to $4.4 million.
This will leave the city with only a modest $1.3 million increase in state aid. Now, Fiorentini is pleading with city department heads and councilors to keep their spending requests modest as he prepares his budget proposal.
Council President John Michitson said Monday he plans on asking the mayor to set up a meeting with Cinder McNerney, the city's longtime financial adviser, to establish where the city stands financially and where it's headed in the future. He also wants to bring in the city's Beacon Hill delegation at the appropriate time to get a sense about what the city's legislators really think they can get from the budget process.
Last summer, Fiorentini and the City Council hammered out an 11th-hour compromise on a 2018 budget of $186 million, under which the city added five new police officers.
It had been a hope of the council that the city would be able to continue adding officers to the police department in the fiscal 2019 budget and beyond. While the governor's budget is only the beginning of the Legislature's budgeting process, the likelihood that the city will be able to find the funds to continue adding more officers is not good.
Councilors Thomas Sullivan and Michael McGonagle said Monday that the city should continue to focus on adding more officers to the department's current complement, which hovers around 90 officers.
While Sullivan lamented that this year's budget will be "extremely tight," he is hopeful the department can add at least two or three officers in the budget for the 2019 fiscal year.
"We absolutely must continue to increase the number of officers," Sullivan said. "It has to continue to be a priority."
He added that the mayor and the council must work closer together on budgets going forward.
"We can't keep relying on the state government and federal government," he noted.
While the council has butted heads with Fiorentini over the budget over the last few years, they've also had harsh words for the mayor regarding his timing for giving the council his budget proposal, usually some time in the spring.
With the recent memo regarding the state budget, McGonagle is taking it as a positive sign that the mayor is willing to begin the budgeting process early this year.
"The sooner we get together and go through the budget with the same information, the better prepared we'll be," said McGonagle, who chairs the council's Public Safety Committee. "Through attrition, the police department loses officers every year, be it retirements, injuries, and transfers.
"We need to remain consistent and continue to add to the force," McGonagle continued. "The governor's budget is just the start and the House and Senate still have to give theirs. Hopefully, they'll be a little more generous."
New revenue sources
Fiorentini said Baker's budget does not include any money for the city's ongoing debt from the 2000 sale of the Hale Hospital, which former State Rep. Brian Dempsey had chipped $2.4 million toward in all but one year as chairman of the House Ways and Means Committee. Dempsey left the Legislature to accept a lobbyist's job last July.
Fiorentini said the burden of paying off the city's Hale debt this year will fall to the city's miscellaneous revenue, an account which is comprised of motor vehicle excise taxes, fees, permits, parking penalties and fines.
Since that revenue is expected to fall by $1 million, Fiorentini said, the Hale debt payment will have to come from the city's tax levy and free cash.
"It is not possible to have large spending increases when the total revenue increase is 2.2 percent," said Fiorentini, adding that the city increased its education and non-education budgets by 7.1 percent and 6.1 percent last year, respectively.
The city's insurance liabilities for municipal employees is up $1.6 million, roughly 7 percent, and the mayor said the city's insurance expenses are around $23 million.
With expenses coming from all angles, Sullivan believes the city has to welcome a more diverse range of businesses to help pay its bills. He used the city's host community agreement with Alternative Therapies, a Newburyport-based medical marijuana dispensary looking to move a facility to the city, as an example of the sort of agreement the city should embrace going forward.
The deal is expected to bring between $200,000 and $350,000 a year to the city.
"There's a funding source we've never had before," said Sullivan. "I know a lot of people may not want to see it come to the city, but the reality is, it will provide badly needed revenue, particularly for public safety, public health and education."
Regarding the need to diversify the city's economy, Michitson is continuing to beat the same drum he's been hitting since becoming council president — that creating a comprehensive economic development plan will bring strong, sustainable industries to the city.
While Haverhill schools accounted for over half of the city's budget last year, McGonagle believes the city should continue to keep public safety as the top priority in a lean budget year.
"If you don't have safety for your citizens — your young, your old — people will not come here and buy homes," he said.
Michitson maintains that education should remain a strong focus of the city's budgeting process, if not the top focus. He believes that reducing money spent on education will have adverse effects down the road.
"A lot of our social problems are impacted on how we educate our kids," said Michitson.
Follow Peter Francis on Twitter @PeterMFrancis