Agenda Text
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Requesting the adoption of a 3-Year Snow and Ice Removal Deficit Amortization Schedule.
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Official Text
To the Honorable Board:
A supplemental state budget provision (St.2015,c.10, Sec. 58) authorizes cities and towns to amortize their FY2015 snow and ice removal account deficits over the next three fiscal years, in equal installments or more rapidly. The text of the provision follows:
''SECTION 58. Notwithstanding section 23 of chapter 59 of the General Laws, section 31D of chapter 44 of the General Laws or any other general or special law to the contrary, a city or town may amortize over fiscal years 2016 to 2018, inclusive, in equal installments or more rapidly, the amount of its fiscal year 2015 snow and ice removal deficit. The local appropriating authority as defined in section 21C of said chapter 59 shall adopt a deficit amortization schedule in accordance with the preceding sentence before setting the municipality’s fiscal year 2016 tax rate. The commissioner of revenue may issue guidelines or instructions for reporting the amortization of deficits authorized by this section."
The Snow and Ice Removal account deficit stands at $2,880,169 at June 30th, 2015. The City is seeking reimbursement in the amount of $1,468,868 from FEMA for eligible expenses accrued. As of this date, FEMA has not rendered a decision on the City's application. Assuming FEMA reimburses for all eligible expenses, the deficit to amortize over three years would be $1,411,30. This would require appropriations of $470,434 in FY2016, FY2017, and FY2018.
The full extent of the deficit will not be known until FEMA renders a decision on the reimbursement of eligible expenses. FEMA may approve all or only a part of the expenses submitted. Given this uncertainty, it is wise for the City to adopt the three year amortization schedule. This will give us some flexibility. The deficit may be paid off at a faster rate and the bond rating agencies would prefer that we do so. This is an option we will explore when the full extent of the deficit is know.
The formal amortization schedule and required Department of Revenue Form is attached to this communication. A formal vote of adoption must be made prior to the setting of the FY2016 Tax Rate.
Respectfully,
Joseph A. Curtatone, Mayor