A new financial crisis... water&sewer deficits

For some unknown reason... the original post was deleted from blog spot. The council tonight will either approve the Mayor's plan to cut the school budget by 800k and do some creative book keeping to avoid a major problem. In my original post, I had said I suggested to the Mayor in a rate hike hearing a few years ago, that the revenue from the retail pot shops be used to offset water rate increases. But she ignored my suggestion. Tune in tonight to see how King and the others handle this, with or without the Mayor being involved.

Everyone should know that even if we use less water, we will NOT pay less to the MWRA. All the cities and Town that are supplied by the MWRA have to pay to keep the entire system running, no matter how little water we use.

https://patch.com/massachusetts/framingham/deficit-framingham-water-sewer-fund-requires-new-budget-vote?utm_term=article-slot-1&utm_source=newsletter-daily&utm_medium=email&utm_campaign=newsletter

 

FRAMINGHAM, MA — Mayor Yvonne Spicer sent shock waves across city government Friday when she announced a plan to fill a deficit a city fund that supports the water and sewer departments by taking money from the school department and using a chunk of the city's rainy day fund.

The city's Water and Sewer Enterprise Fund was $1.5 million in the red when the 2020 fiscal year ended in June. State officials will allow the city to pay that off over three years — starting with $500,000 in fiscal year 2021.

On top of that, Framingham is projecting a $2 million shortfall in the Water and Sewer Enterprise Fund for fiscal year 2021 due to a pandemic-related drop in revenue from commercial businesses.

With the $500,000 from fiscal 2020, Framingham will have to make a projected $2.5 million payment to cure the deficit before the fiscal year ends in June.

The City Council discussed the $1.5 million 2020 deficit over the summer. In July, Chief Financial Officer Mary Ellen Kelley told Councilors the city was waiting to see if a new coronavirus stimulus package might pass at the federal level, providing a way to pay off the deficit.

To fix the deficit, Spicer wants to reduce the Framingham Public Schools budget by $800,000, and reduce the approved budgets for the water and sewer departments by $100,000 each. Spicer also wants to take $1.5 million from the free cash balance, which stands at about $8 million total. Spicer's proposal would avoid a tax increase this fiscal year, she said.