The Boston Redevelopment Authority is facing a more than $3 million budget shortfall next year, BRA director John Palmieri told a group of Boston city councilors Wednesday.
The BRA has reacted to the sharp economic downturn by instituting a hiring freeze, slashing travel budgets, and consolidating some vending and planning contracts, Palmieri said. Even so, the agency will finish the current fiscal year with a $343,000 shortfall on a $17 million budget. Next year, that deficit will balloon to $3.2 million.
"We’re facing a serious problem next year," Palmieri told the council’s Ways and Means committee.
A BRA spokeswoman said the agency tries to balance its budget, but can deficit-spend if necessary, meaning it’s not essential to close the budget gap in the short term.
In addition to the aforementioned cost-cutting measures, the organization is also cutting salaries and offering early retirement to some employees.
The BRA’s budget is built, largely, on revenues from real estate it owns and operates. However, the agency annually receives small doses of city capital funding. This year, the BRA is expected to get $170,000 from city coffers, which some City Councilors believe entitles them to more transparency from the organization.
This year, with two mayoral candidates at the BRA’s budget hearing, the inquiry was markedly polarizing. Both Sam Yoon and Michael Flaherty have declared their candidacies for mayor, and currently sit on the City Council.
Sam Yoon peppered Palmieri with questions about the BRA’s property holdings, community benefit funds, and the stalled Filene’s redevelopment project. The at-large councilor from Dorchester read from a series of newspaper clips about the project, insisting that Vornado Realty Trust sink equity into the Downtown Crossing crater.
"I’d like them to do it, too," Palmieri replied. But he said that he had little power to compel such an investment. "It’s in their best interests to do that. It’s a smart and savvy move. But they control the site. It’s their project."
"The mayor made it clear that he expects the developers to come back with a development program, or clean up the site," Palmieri added.
Yoon immediately released a press release touting his "harsh critique of [the] agency’s transparency."
