Everett,  June 29 2018

City Council approves $196,427,922 FY19 operating budget

By Brendan Clogston

 

The City Council passed Mayor Carlo DeMaria’s FY19 budget Monday night with only minor cuts, despite a few efforts to make deeper cuts.

After two weeks of budget hearings, the council’s budget committee recommended out to the full council a $196,427,922 FY19 operating budget, which included $60,171 in cuts from the mayor’s salaries line item, $100,000 from his marketing and business development line item, $15,000 from his afterschool program line item, $10,000 from the planning and development intern account, and $100,000 fixed costs. On Monday, the council cut an additional $25,000 from the mayor’s celebrations account, leaving the final operating budget at $196,402,922.

The council approved the revised budget, 8-2, with Ward 1 Councillor Fred Capone and Ward 2 Councillor Stephen Simonelli voting against it.

 

Major impacts

This year’s budget is expected to raise taxes by a staggering 11 percent, even after the council voted to use the final $12.5 million pre-opening payment from Encore Boston Harbor to reduce the tax rate. When asked to estimate the financial impact of not applying the Encore Boston Harbor money to the tax rate, Everett CFO/City Auditor Eric Demas guessed that under such a circumstance the rate would have gone up as much as 25 percent.

City officials have stated repeatedly that FY19 is a difficult financial year for the city for a number of reasons: rapidly raising home values yet unmatched by the growth in commercial values, the financial blows the School Department has received due to changes in the state aid formula, and the preparations being made for Encore Boston Harbor’s June 2019 opening.

“Some of the largest increases the city has seen over the last few years have been in public safety, all in getting prepared for opening day [of the casino],” said Demas. “You can’t hire 30 officers the day it opens, so there’s been a natural progression as we spend this money so that the city is fully prepared day one, when the operation opens.”

Councillor Capone stated that he was disappointed that the Encore payments were not having a more significant impact on the tax rate. “[Eleven percent] is a horrifying number. If we don’t approve the $12.5, it’s game over. When we were talking money coming in the casino, I was hopeful that instead of being a little bit of a boon, it was going to be a huge boon. Nothing has been done wrong; it has been utilized by the administration as a funding source. I was hopeful that instead of being used as a funding source, we would look at the budget, have it stand on its own, get the tax rate and then take that $12.5 million and make a larger benefit to the taxpayers. That was my hope.”

Mayor Carlo DeMaria reminded Capone that after opening day, Encore will be making $30 million payments to the city annually, a windfall that will have a major impact on the city’s finances. He also argued that the city’s use of the $12.5 million allowed them to meet a number of financial challenges.

“The $12.5 million is also filling gaps – like we lost the direct certification for our schoolchildren, that’s $6.5 million we’re giving the schools above net school spending,” said DeMaria. “If we have a problem with $12.5 million … we wouldn’t be hiring the police and fire that have been requested by this council; we wouldn’t be submitting $6.5 million to the schools. Those are the things we have the luxury of doing because we have the additional funds. … It’s a huge boon.”

 

Trying for deeper cuts

After successfully cutting the celebrations line item, Councillor Capone tried to make a deeper cut in the Mayor’s budget, defunding the new Office of Organizational Assessment, which is headed by Dr. Omar Easy.

“This is a new department,” said Capone. “The rationale that we were given was to improve efficiency. We have a human resource office, we have a chief of staff, we have department heads, all of whom are tasked with making sure their departments are efficient. In another year, when money was flowing free, I see the value of it. But given what we’re looking at, given the times we’re in, I think that [those funds] would be better served with a consultant.”

Mayor DeMaria vigorously opposed the cut, praising Dr. Easy as a major asset to the city. “The man who operates in this position has a PhD from Penn State University,” said DeMaria. “He gives so much back, not only to this department, but to the kids in this city. We go through this city – every single kid in this city knows who Dr. Omar Easy is. … He’s driven my department heads to make sure that they do their jobs on a timely basis. He makes no friends. He drives the agenda in staff meetings. He serves as the chair on School task force. … He’s the first one in the door in the morning, doing his job. He has a great relationship with the residents of the city. And you want to cut his position? For what? Cut something else.”

In defending Easy’s job, DeMaria also bristled at prior cuts made by the council to his office’s budget. “The biggest department in the city, and not one item was cut. The School Department,” said DeMaria. “You didn’t go through one line item or ask for one cut. And you take my budget – we’ve had a gentlemen’s agreement in this chamber for years that no one would touch the mayor’s budget and I wouldn’t touch your budget. I let you hire who you hire for what salaries you put in there. I don’t touch your budget, but you go through and you decimate the mayor’s budget. You cut $300,000 from my line items. You’re targeting employees in my department.”

Ward 5 Councillor Rosa DiFlorio suggested that any cuts as minor as the one suggested by Capone would not have an appreciable impact on the city’s taxes. “I don’t want to be nickle and diming – making the taxpayers think they’re going to be saving money when they’re not going to be saving anything,” said DiFlorio. “If this body is not going to find $11 million, I’m not going to sit here until three o’clock in the morning so the people can save three cents. … I don’t know how you’re going to cut $11 million without laying off half the city.”

DeMaria echoed DiFlorio’s comments, stating that a cut of a few hundred dollars “makes no difference” on the tax rate. “You want to make a big difference in the budget? Cut $10 million from the budget. That makes a serious difference. Cut a million dollars, you’ll save taxpayers 25 cents on their tax rate. You might save them $40, $50 for the year. I cut from my department heads $2.5 million already. I gave them no raises. Gave them nothing they wanted. I have one, Jim Soper, who’s going to apply for the job in Somerville because they’re paying $130,000 and he’s gonna get the job. So what do I do then? Let him go. We’re underpaying department heads as it is.”

Capone pushed back against this argument, stating that “one of most important functions we have as a legislative body is to watch the funds, so if we’re here until four in the morning, so be it.”

“We talk about a lot of things up here; we talk about taking care of the taxpayer; we talk about spending wisely, but then when we bring up a cut, everyone starts screaming bloody murder,” said Capone.

Capone’s initial attempt to cut the department line-by-line failed in a 5-5 vote, with Councillor Capone, Ward 6 Councillor Michael McLaughlin, Council President Peter Napolitano, Councillor-at-Large Wayne Matewsky, and Councillor-at-Large Michael Marchese voting to cut, and Councillor DiFlorio, Councillor-at-Large John Hanlon, Councillor-at-Large Richard Dell Isola, Ward 4 Councillor John Leo McKinnon and Councillor Simonelli voting against cutting. Believing any subsequent attempts to cut the remaining line items would be futile, Capone relented.

Capone’s was not the only unsuccessful attempt to cut. Councillor Marchese proposed a major $3.5 million cut from the school’s budget to shut down the preschool program. Marchese argued that the program was drawing children into the school system and straining the city’s resources, and suggested that the preschool program be rebuilt with a lottery system for future school years. His motion did not receive a second.

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