Brockton officials say FY25 closed in surplus; DOR tax-recap, $1.6M BRA shortfall and pension decisions flagged

Brockton Mayor Robert Sullivan, Chief Financial Officer Dr. Troy Clarkson and interim City Auditor Juan Gonzalez told the City Council Finance Committee that fiscal year 2025 closed in surplus and that the city is on track to meet Department of Revenue deadlines — while flagging a $1.6 million obligation related to the Block Redevelopment Authority (BRA) that may require council action.

The presentation and discussion matter because the tax recap and free-cash certification that follow the fiscal-year close set the tax rate and the amount of one-time funds available for the FY27 budget. Dr. Clarkson said the city’s new budget-reporting tool provides department-level spending data and allows faster, regular updates to the council and public.

Sullivan opened the update by directly addressing public assertions about the city’s finances: “There’s bold faced lies saying that we’re in a deficit. We are not in a deficit in any shape or manner whatsoever,” he said. Clarkson and Gonzalez described progress on the Department of Revenue (DOR) tax-recap process and a timeline that targets the DOR balance sheet and tax-cap deadline in late November and free-cash certification in December.

Gonzalez told the committee that DOR staff have asked for the balance sheet and related filings by November 30 so free cash can be certified in December. He also identified the immediate budget risk: drawdowns tied to the Block Redevelopment Authority that lack sufficient documentation and could reduce available free cash by about $1,600,000. “Right now, the only concern that I would have is that in December, when we get our free cash certification, we would probably have to go to council to cover use free cash to cover the deficit that was left over from the block to redevelopment authority mess that we are dealt,” Gonzalez said.

Committee members and staff described the city’s budgeting tools and timeline. Dr. Clarkson said the reports show the city is 30.68% through the fiscal year and that overall spending currently reads about 32.32% — a variance he attributed in part to front-loaded debt payments that skew early-year comparisons. He said the detailed, department-level reports are being provided regularly and will be a recurring agenda item.

The committee also discussed two recurring structural budget items. First, health insurance costs: Clarkson said the FY26 budget included a 14.5% increase in health-insurance rates after the city’s self-funded trust faced higher-than-expected claims (including impacts from GLP-1 drugs). He said the trust fund had sufficient reserves and that the rate increase appears to be covering costs so far. Second, pension funding: the city previously authorized $360 million in pension-related borrowing and issued $300 million; the administration is evaluating whether to issue the remaining roughly $60 million and is coordinating with the retirement board and state officials on assumptions that affect annual budgeted pension charges.

Committee members asked for follow-up on the BRA shortfall and were told the city has engaged external auditors (CLA) to examine the BRA finances, missing documentation, and potential liabilities. Sullivan and staff said the BRA issues reflect drawdowns that were not later documented for reimbursements; HUD and local staff are involved in remediation.

What happens next: Gonzalez said the DOR tax-recap work will proceed through November, the council will be asked to act if use of free cash is required to resolve the BRA liability, and the finance office will continue monthly updates and quarterly deep dives for the committee. The committee voted to recommend the resolve to the full council, with the motion carried at the meeting (vote counts not specified in the transcript).