By THOMAS GRILLO
LYNN — Chief financial officer Peter Caron appeared before the City Council’s Budget Committee Tuesday night to explain how the city found itself $8 million in the hole.
“The fiscal year 2017 budget was about $4 million out of balance because expenditures exceeded projected revenues,” he said. “That budget did not reflect pay raises. So we started the fiscal year 2018 budget with a structural deficit in that expenditures exceeded revenues.”
The bottom line, he said, was that to fully fund all city positions with raises would be a 7 to 8.5 percent increase in payroll line items.
“We are not in a position to do that,” Caron said. “So, the mayor has asked all departments be level funded. We are encouraging managers to be creative and we’re looking for suggestions. Once we get those budgets, we’ll see how the department heads will address their shortfalls.”
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Ward 1 Councilor Wayne Lozzi wanted to know why Mayor Judith Flanagan Kennedy failed to anticipate the pay hikes and figure out how to pay for them.
Earlier this year, firefighters won a new four-year contract with a 9.5 percent raise, costing $2.5 million. Last summer, the police received $2.2 million over four years.
“These raises were anticipated,” Lozzi said. “When you settle a contract, it calls for pay raises in a certain time frame with retroactive pay.”
Lozzi asked what assurances the city has if department heads overspend and ask for supplemental cash later.
Caron said, “There is no additional money for supplement budgets.”
Thomas Grillo can be reached at [email protected].
