At a virtual meeting of the Amherst Finance Committee on October 6th, Comptroller Sonia Aldrich presented the Fiscal Year 2020 (FY20) year-end report for the $85.2 million operating budget. Aldrich summarized that it was a very challenging year in many ways but the Town is, nonetheless, on good financial footing.
The year ended with a revenue deficit of close to a half million dollars, which is very close to what Aldrich had projected when COVID hit in early spring. The Town collected almost all of the $54.4 million in property taxes (from which the bulk of revenue derives), but other areas of revenue were hit hard by the pandemic, including fines and forfeits, motor vehicle excise tax, and the recreation department because of cancelled camps and sports programs.
Expenditures, however, were also down, with a number of departments “turning back” unspent funds that totaled $2.25 million. This resulted in a net operating surplus in the General Fund of almost $1.8 million, which is in line with previous years. It’s worth noting that this surplus does not translate to a similar increase in the Town’s Free Cash as it does not account for almost $3 million in transfers approved by the Town Council in FY20 for Other Post Employment Benefits (OPEB) and the Stabilization Fund.
Included in the “turn backs” were funds allocated for staff positions that were not filled, rebates from lower health insurance premiums, elementary schools’ operating savings (primarily due to lower transportation costs after schools closed), reduced assessments due to fewer charter school enrollments, and other factors.
The Town incurred significant COVID-related expenses, which it is expecting to have reimbursed under the Coronavirus Aid, Relief, and Economic Security (CARES) Act. One Councilor asked for an accounting of how CARES Act funds have been, and will be, spent. Finance Director Sean Mangano said that until June of this year, they were spent primarily on Personal Protective Equipment, cleaning supplies, and additional first responder costs. Mangano said he will discuss with the Town Manager how best to share the information with the Council and the public.
Cannabis revenues are not yet projected in the budget since they are still so new and haven’t yet shown a trend, but Aldrich reported $206,135 in cannabis revenue in FY20.
The “Enterprise Funds”— for sewer, water, solid waste and transportation — were all “hit hard,” according to Aldrich. The sewer fund had a deficit of almost $650,000 and the water fund had a deficit of almost $500,000. The shortages are attributed to two factors: reduction in water consumption over recent years as water conservation increased, and the shutdown of UMass during the COVID pandemic.
The transportation fund was down almost $250,000 due to the suspension of parking enforcement during the pandemic. (The sources of revenue for this fund are parking meter receipts and ticket revenues.) The solid waste fund, which Aldrich has characterized as “the problem child,” broke even this year, with a net growth of about $6,000.
Looking to FY21 and beyond, Mangano said he was concerned that local tax revenue (i.e., business property taxes) and other local receipts could be adversely affected if local colleges and universities remain mostly virtual after the new year.