Boston Ends FY16 with a $1.9M Surplus

Revenues $25.9M over budget, spending exceeded appropriations by $24.0M

The City of Boston ended FY16 with a $1.9M General Fund operating surplus, smaller than the $7.4M surplus in FY15.  The surplus is due to the fact that actual receipts exceeded budgeted revenues by $25.9M, which was greater than the $24.0M that actual spending exceeded final appropriations.  The General Fund surplus represents 0.07% of city spending totaling $2.88B.

FY16 General Fund Summary
Figures in Millions
Budget Actual Variance
Revenues $2,857.1 $2,883.0 $25.9
Expenditures $2,857.1 $2,881.1 ($24.0)
Surplus         $1.9

The $24M in spending over appropriations is driven by public safety overtime and legal claims.  Police and Fire Department overtime costs contributed to a combined departmental deficit of $19.5M.  In the FY17 budget, the City increased the Police and Fire overtime budgets and expects both to manage spending within their budgets which would be a savings over FY16 actuals.  Additionally, court judgments and legal claims paid by the City exceeded its budget by $7.0M in FY16.  A mild winter kept snow removal costs within budget in FY16.

FY16 Select Spending Accounts

Figures in millions

Budget Actual Variance
Police $332.5 $348.9 ($16.3)
Fire $213.7 $216.9 ($3.2)
Judgments & Claims $3.5 $10.5 ($7.0)
Snow Removal $14.8 $14.8 $0.0

The City’s prudent practice of conservatively estimating its revenues once again produced a revenue surplus at year end.  Actual receipts of $2.883B in FY16 were $25.9M over budget estimates.  The excise revenue surplus of $44.5M included motor vehicle, room occupancy, meals, aircraft fuel, and other small accounts. Building permit receipts were $19.3M or 58.4% over budget.  State aid was $2.5M less than expected due mainly to the state only funding the charter tuition reimbursement at 56.9% of its full obligation.

FY16 Select Revenue Accounts

Figures in millions

Budget Actual Variance
Property Tax $1,923.4 $1,925.0 $1.6
State Aid $424.0 $421.6 ($2.5)
Excise Receipts $179.4 $223.8 $44.5
PILOTs* $91.7 $99.3 $7.7
Building Permits $33.0 $52.3 $19.3
Free Cash $40.0 $0.0 ($40.0)
Parking Meter Fund $20.5 $0.0 ($20.5)
*includes PILOT program, Massport PILOT and 121A payments

For the fifth year in a row, the revenue surplus allowed the City to forego using revenues initially budgeted for operations.  The City did not use $40M in free cash, $20.5M from the Parking Meter Fund and $1M in Cemetery Trust Funds.  From approved appropriations for other purposes, the City was also able to transfer $12M to the Boston Retirement System at year-end to help mitigate its investment loss in 2015.

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