NORTH ADAMS -- The city closed out fiscal 2014 in better financial condition than anticipated, despite the need to shift $761,677 in funds to balance the prior year's budget.
The city retained $196,582 in reserves -- a number far below the state Department of Revenue (DOR) recommendation, but above the expected $95,000 -- Mayor Richard J. Alcombright said during a special City Council meeting on Tuesday.
However the increase in the reserve funds is still inadequate according to state standards. DOR officials typically recommend a municipality have between 3 and 5 percent of its annual budget in reserves. For North Adams, which has a $37.73 million budget in fiscal 2015, that means it should have more than $1 million in unrestricted funds in its coffers, according to City Administrator Michael Canales
The council unanimously voted to transfer a total of $761,677-- a mix of reserve account funds and surplus funds in departmental accounts -- prior to closing the books on fiscal 2014. Councilors Kate Merrigan and Keith Bona were absent from the meeting.
Among the largest transfers were $167,911 to the transfer station account and $83,220 to veterans services account. The fiscal 2015 budget included increases to both accounts intended to avoid similar overages in the current year, the mayor said.
"If we overestimated anywhere [in fiscal 2015], it was in veterans' benefits," he said, adding that the spending plan also budgets for more volume at the transfer station.
Of the $761,677 in funds transferred, a total of $332,144 in reserves were used, including $282,363 from the city's restricted land sale account. The use of the land sale account funds -- a move that was approved by the state Legislature last month -- depleted the account.
In addition, local receipts ended higher than anticipated, while the return of two injured firefighters to the department also helped save money, Alcombright said.
The brighter-than-expected fiscal 2014 numbers come on the heels of Gov. Deval Patrick signing a $750,000 emergency municipal aid package for the city last week. The one-time aid package could leave the city in better fiscal standing than officials expected.
"We're really quite happy with the way the year ended," Alcombright said.
However, the mayor pointed out that the majority of the city's remaining reserves -- such as its municipal tech fund, which has a balance of $114,799 -- are limited to restricted uses that require state approval.
The mayor also emphasized that it is still unclear if there are any use restrictions tied to the emergency aid. Alcombright said any restrictions or parameters will be made clear when he, along with Canales and Auditor David Fierro Jr., meet with DOR officials later this week. At prior meetings, the mayor has indicated that restoring a spot on the police force and directing funds to the school department are a top priority.