OPERATING AND CAPITAL BUDGET FOR FISCAL YEAR 2023 AND AUTHORIZATION FOR THE DIRECTOR TO TRANSFER INTERCOMPANY AGENCY FUNDS, FORGIVE INTERAGENCY DEBT, AND STAFF TRANSACTIONS –
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OPERATING AND CAPITAL BUDGET FOR FISCAL YEAR 2023 AND AUTHORIZATION FOR THE DIRECTOR TO TRANSFER INTERCOMPANY AGENCY FUNDS, FORGIVE INTERAGENCY DEBT, AND STAFF TRANSACTIONS – Google Docs
MEMORANDUM JUNE 16, 2022
TO: BOSTON REDEVELOPMENT AUTHORITY
D/B/A BOSTON PLANNING & DEVELOPMENT AGENCY (“BPDA”)
AND JAMES ARTHUR JEMISON II, DIRECTOR
FROM: MICHELLE GOLDBERG, DIRECTOR OF FINANCE
DILLON DARCY, BUDGET MANAGER
LINDA QIAN, CONTROLLER
SUBJECT: OPERATING AND CAPITAL BUDGET FOR FISCAL YEAR 2023 AND AUTHORIZATION FOR THE DIRECTOR TO TRANSFER INTERCOMPANY AGENCY FUNDS, FORGIVE INTERAGENCY DEBT, AND STAFF TRANSACTIONS
_____________________________________________________________________________________
SUMMARY: Request approval of the Boston Redevelopment Authority Fiscal Year
2023 Operating Budget in the expense amount of $32,242,676 and related approvals and authorizations. Also request approval for Fiscal Year 2023 Capital expenditures amount of $13,405,000.
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OVERVIEW
The Boston Redevelopment Authority (“BRA”) Operating Budget includes the revenue and expenses attributable to a variety of functions, including the operation of the Charlestown Navy Yard (“CNY”), The China Trade Building, and core department operations in planning and development review work. This Operating Budget is a twelve-month management tool that commences on July 1, 2022 and allocates resources to achieve program initiatives. This budget reflects both Boston Planning & Development Agency (“BPDA”) and the Mayor’s goals and priorities.
Building on changes in the prior year, the FY23 budget process continues incremental progress toward several key goals: (1) Transforming the budget into an ongoing fiscal management tool that brings greater understanding and more accountability; (2) Increasing the level of transparency by providing more detail concerning revenues, expenses, and the overall financial health of the BPDA; (3) Focusing on future finances through renewed efforts around capital planning and multi-year cash flow projections. These changes are a continued effort to manage the finances of the BPDA in a way that ensures an effective and efficient planning and economic development process for the community.
FY23 marks the fourth year that the BPDA will have a restricted fund category that acts as a set-aside mechanism for funding construction projects. This will help the BPDA embark on its effort to address the over $400M in capital needs for future asset improvements. The current authorized balance for BRA projects is $8M.
The Operating Budget for BRA is presented in the attached presentation provided to the Board of Directors and is a summary of revenues and expenses.
BUDGET SUMMARY
Total FY23 operating revenue is budgeted at $26,529,598 and total FY23 expenses are budgeted at $32,242,676. The major components of Operating Budget Revenues and Expenses are as follows:
Revenues
Revenue is budgeted at $26.53M. This represents revenue generated from Rental, Lease & Parking Income, Equity Participation, Sale of Real Estate, Grant Income, and Interest & Other Income.
- Rental, Lease & Parking revenue is budgeted at $14.60M and predominantly represents revenue derived from the China Trade Building, property in the CNY and Parking Facilities.
- Sale of Real Estate is budgeted at $3.3M and represents payments received from the sale or transfer of BRA-owned property.
- Equity Participation is budgeted at $1.5M and represents payments due to the BRA for the sale of property built on BRA land.
- Grant Income is budgeted at $6.5M and includes both the intercompany grants, City of Boston funding and other outside sources for specific items including Pension expenses, and the demolition and remediation of Building 108.
- Other Income is budgeted at $.63M and includes installment sale interest income, small fees, as well as loans and housing administration reimbursement from the city and returns on investments.
Expenses
Total Operating Expenses are budgeted at $32.24M. This represents expenses in the following categories: Personnel, Employee Benefits, Administrative Expenses, Contractual Service, and Property Management.
- Personnel costs are budgeted at $8.54M to support full-time staff. This category also includes amounts for annual increases, staff promotions and adjustments, as well as other temporary staff needs.
- Employee Benefits are budgeted at $3.36M and include Retirement Pension Costs of $2.01M, health insurance costs of $.97M and other benefit costs totaling .38M.
- Administrative Expenses are budgeted at $1.47M and represent the cost of day-to-day operations, including technology acquisition and upgrades, employee education, printing, telecommunications, leased copy equipment and maintenance support, office supplies, postage, travel, marketing and advertising.
- Contractual Services are budgeted at $7.05M and provides funding for Administration and Finance, Legal, Planning and Real Estate department services. Services include outside legal fees, audit expenses, appraisal services and planning studies.
- Property Management/Debt Service costs are budgeted at $11.82M and represent utility, insurance, transportation, land and building maintenance, security costs as well as depreciation expense. This category includes a large construction project which is considered an operating expense. The FY23 Budget for this project is 5.8M.
CAPITAL BUDGET ITEMS – The following items are included in the FY23 Capital Budget vote. These projects can be funded by four sources, BPDA operating funds, BPDA Capital Reserve Funds, City of Boston grants for capital spending, and eligible restricted funds. Please see the included table for details.
New Projects Seeking Authorization $ 13,405,000
The following capital expenditures are new for FY21:
- Pier 5 – Assessment
- China Trade Bike Room & Storage
- China Trade Fire Pump & Controller Improvements
- Little Mystic Harborwalk Improvements
- CNY Pier 4 Structural Pile Repairs
INTERAGENCY FUNDING
In an attempt to maintain organizational continuity and financial stability, the Boston Redevelopment Authority (“BRA”) and the Economic Development and Industrial Corporation of Boston (“EDIC”) historically have engaged in inter-agency fund transfers, grants and loans (and loan forgiveness). These procedures have been consistent with the operating principles of each agency that draw limited distinction between the overlapping BRA, EDIC, Boston Local Development Corporation (“BLDC”) and Boston Industrial Development Finance Authority (“BIDFA”) missions. Indeed, these transfers and loans have contributed to the smooth operation of all four organizations and to further key agency initiatives. As such, the BRA and EDIC Boards have approved these actions on multiple occasions.
At this time, as part of the approval process for the FY23 Budget, there is an opportunity to afford greater flexibility and efficiency for the management of both BRA and EDIC budgets. Continued transparency is assured through the yearly audit process and the annual budget approval process before both the BRA and EDIC Boards. Therefore, staff requests that the Director be authorized to transfer funds, and also to forgive Interagency Debt to or from the BRA or to or from the EDIC, BLDC or BIDFA at times and under such terms as the Director deems appropriate.
PERSONNEL; EMPLOYEE TERMINATION PROCEDURES
In regard to potential termination decisions of existing Boston Redevelopment Authority (“BRA”) employees that have “permanent employee” status, “veteran” status or any other status, it is recommended that the authority to terminate such employees be delegated to the Director, to function as the appointing authority in accordance with applicable law for the fiscal year ending June 30, 2023.
Civil service law (M.G.L. c. 31, §§1-77) establishes a comprehensive system governing the terms and conditions of employment for civil service employees. This comprehensive system established by M.G.L. c. 31 does not generally apply to BRA employees.
However, with M.G.L. c. 121B, §52, the Massachusetts Legislature made the decision to afford employees of redevelopment authorities who meet certain criteria the same procedural and substantive due process rights that are afforded to tenured civil service employees pursuant to M.G.L. c. 31, §§41-45. Generally, these sections of the civil service law require that appointing authorities provide their tenured civil service employees with a hearing prior to taking any significant job action, including termination, that the appointing authority only take a job action if it has “just cause” to do so; and that such employees may appeal the job action for review by the Civil Service Commission and Superior Court.
M.G.L. c. 121B, §52 provides, in relevant part, with emphasis added, as follows:
“A veteran, as defined in section one of chapter thirty-one, who holds an office or position in the service of a redevelopment authority, and has held such office or position for not less than three years, shall not be involuntarily separated from such office or position except subject to and in accordance with the provisions of sections forty-one to forty-five, inclusive of said chapter thirty-one of the same extent as if said office or position were classified under said chapter. . .
No person permanently employed by a redevelopment authority, shall, after having actually performed the duties of his office or position for a period of six months, be discharged, removed, suspended, laid off, transferred from the latest office or employment held by him without his consent, lowered in rank or compensation, nor shall his office or position be abolished, except for just cause and in the manner provided by sections forty-one to forty-five, inclusive, of chapter thirty-one.”
The Director should be authorized to function as the appointing authority to ensure that procedural and substantive due process rights are implemented, including notice, hearing and all other rights in accordance with applicable law.
Appropriate votes follow:
VOTED: It is requested that the Board approve the Boston Redevelopment Authority’s Operating Budget expenses for Fiscal Year 2023 in the amount of $32,242,676; and $13,405,000 of Capital Budget expenditures; and
FURTHER
VOTED: That the Director be, and hereby is, authorized to take actions and execute documents and agreements relating to the transfer of funds, forgiving inter-agency debt, and leasing property and assets to or from the Economic Development and Industrial Corporation of Boston (“EDIC”) to the Boston Redevelopment Authority (“BRA”) or, to or from the BRA to the EDIC; and that the Director be and hereby is, authorized to take actions and execute documents and agreements relating to the transfer of funds and forgiving inter-agency debt by and between or among the EDIC, BRA, the Boston Local Development Corporation (“BLDC”), and, or, the Boston Industrial Development Finance Authority (“BIDFA”) to the extent permitted or authorized by the BLDC or BIDFA respectively, at a time and under such terms as the Director deems appropriate; and
FURTHER
VOTED: That in connection with any inter-agency lease of property and, or assets between EDIC and the BRA, the Director be, and hereby is, authorized to enter into any sub-lease for space, sub-lease amendments or extensions and any and all related documents that the Director deems appropriate and necessary in connection with such inter-agency lease of property and, or assets.
FURTHER
VOTED: That the Director be, and hereby is, authorized to take actions and execute documents and agreements relating to the transfer in and expenditure or transfer of funds out of the Capital Reserve Fund.
FURTHER
VOTED: That the Director be, and hereby is, delegated all necessary powers in accordance with applicable law or otherwise, without limitation, as the appointing authority, with regard to the termination of BRA employees for fiscal year ending June 30, 2023; and
FURTHER
VOTED: That the Director be, and hereby is, authorized, in connection with employee terminations, to execute and deliver any and all notices, correspondence, documents, or agreements, to or with employees and others, all containing such terms and conditions as the Director determines to be in the best interest of the BRA.