WORCESTER – In a presentation to the Worcester City Council Finance Committee on Tuesday, June 6, Worcester Chief Financial Officer Timothy McGourthy presented new financial projects for Polar Park for FY 2023, which ends June 30, and FY 2024.
During a presentation led by City Manager Eric Batista, McGourthy presented the section about the financial obligations of the city, and revenue projections.
McGourthy’s part of the presentation on the financials is below.
During questions by councilors after that presentation, reporting by This Week in Worcester was called into question.
The article in question can be found here. There was a recent update to the piece that was not content related. You can verify via the Wayback Machine version last updated May 24. The story was originally published on May 23.
In response to an inquiry by This Week in Worcester, the City Manager’s office provided the following information on May 15, at 3:42 PM:
- The District Improvement Financing (DIF) Reserve began the year with $2.7M in the account, representing prior-year revenues and working capital.
- During the course of FY23 (which ends on June 30, 2023), the DIF is estimated to generate approximately $3.1M from property & meals taxes, permit fees, team rent, Madison lease payments, parking revenues, and advertising.
- During the course of FY23 (which ends on June 30, 2023), the DIF is estimated to pay approximately $5.2M in debt service on bonds issued in support of the ballpark project.
- The result is a positive year end result of approximately $600K+, which will remain in the DIF reserve for FY24.
A follow-up email provided the city’s loan service obligation for FY 2024, at $6.2 million.
The information provided by the city to This Week in Worcester over three weeks ago, on May 15, is presented alongside figures presented by McGourthy during the City Council Finance Committee meeting on June 6.
The only difference in the figures are new projections by the city for revenue. That upward projection also changes the end-of-year balance in the Polar Park reserve.
Based on the figures provided at the time, This Week in Worcester used basic arithmetic for two simple calculations. The first calculation sought the difference between the FY 2024 expenses and the end of FY 2023 reserve.
The slide in McGourthy’s presentation for FY 2024 projects revenues of the same amount, $5.6 million.
In other words, this simple arithmetic showed that if the city spent all of its reserve from 2023, $600,000, it would need an additional $5.6 million to meet expenses in 2024 of $6.2 million.
The second calculation sought to determine the percentage increase of revenue from FY 2023 to FY 2024 required to cover expenses. The formula to calculate percentage increase is:
Percentage Increase = [ (Final Value – Starting Value) / |Starting Value| ] × 100
Final value = revenue required in FY 2024 = $5.6 million
Starting value = revenue generated in FY 2023 = $3.1 million
[ (5.6 – 3.1) / |3.1| ] × 100
[ 2.5 / 3.1 } x100
.80 x 100 = 80%
Based on the figures provided by the City Manager’s office on May 15, the DIFF revenue of FY 2023 must increase by 80% in 2024 to meet expenses. This is the same figure This Week in Worcester published in its May 23 piece.
Using the updated figures provided on June 6, if the entire reserve, projected at $954,487 at the end of FY 2023, was applied to expenses, the remaining revenue required to meet $6.2 million in expenses is $5,245,513.
From the required revenue to meet expenses in FY 2023, $3.4 million, to the required revenue to meet expenses in FY 2024, $5,245,513, is a 54% increase in revenue.
Those are mathematical facts.
This Week in Worcester stands by its reporting.