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duty of a public officer charged with the disbursement of millions of dollars of the public money was to search the printed reports of the City Government for accounts that would show the cost from year to year of equipping and maintaining the various departments of municipal service, I was amazed to discover that practically there were none. I have in consequence been obliged to devote an inordinate amount of time to the work of securing this information, and of arranging it in convenient form for use. The time thus spent, amounting often to several hours a day for weeks at a stretch, has of course left so much less for the direction of the executive business of the city; but a correct and perspicuous system of accessible accounts is the only safe foundation for a successful administration of that business; and if my successors in office and all other inquiring citizens shall hereafter be able to investigate the financial operations of the city and its various departments with reasonable rapidity, I shall feel amply compensated for the time and labor bestowed upon this branch of the public business.


SECTION 4. Changes Effected. Some of the results of these labors can be seen by comparing the annual department reports for 1893-4 - particularly those of the Auditor, Architect, Board of Assessors, Board of Park Commissioners, and Street Department with the corresponding documents for 1890; and by reference to the Appendix, which contains the tables that have been found the most useful in practice. These include eleven tables relating to the city debt and sinking-funds; ten relating to current revenues, expenses, and taxes; twenty-one relating to the water-works and other municipal investments; and eight relating to other matters. Still others will be found scatte red throughthe text of this message.1


Some of these tables have been submitted to the City Council in special messages; some were ordered to be printed in the department reports; some are now for the first time published.

1 See Table of Contents, pp. 5 to 7.


The change in the fiscal year, effected in 1891,1 and the order of December 5, 1891,2 providing that the reports of all departments should be made for the fiscal year, have tended to simplify the book-keeping of the city, and to promote a correct understanding of our municipal finances.

A new system of book-keeping has been introduced into the Architect and Street Departments, so that it will be possible in these, the chief construction departments of the City Government, to compare the cost of future work with that executed during the past four years.3

SECTION 5. Estimates of Income. The method of estimating the income of the city available for the general expenditures of the year has been changed. This income consists of:

(a) Unappropriated cash in the treasury at the beginning of the year, being the surplus of receipts over expenditures for the previous year.

(b) Receipts from taxes for the current year.

(c) Receipts from unpaid taxes of prior years. (d) Receipts from liquor licenses.

(e) The city's part of the tax on corporations collected by the Commonwealth.

(ƒ) The miscellaneous receipts of the various depart


For some years prior to 1893 it had been the custom to estimate so much revenue from liquor licenses, so much


1 From 1822 to 1825, inclusive, the fiscal year ran from June 1 to May 31; from 1826 to 1891, inclusive, the fiscal year began May 1 and ended April 30; the fiscal year 1891-2 began May 1, 1891, and ended Jan. 31, 1892; and since then the fiscal year has begun February 1 and ends January 31. See ordinance approved March 21, 1891. This reform, so essential to that concentration of responsibility which the present charter secks to secure, was for years blocked by the opposition of the heads of departments, notwithstanding its advocacy by every living ex-Mayor, as well as by the press, and in spite of the fact that Boston was the only city in the State in which the fiscal and political or municipal years were not coincident or nearly so. (See the reports of the Citizens' Association for 1888, 1889, 1890, and 1891, and various debates in the City Council, particularly that of July 1, 1889.)

2 See also Rev. Ord. of 1892, chap. 3, sect. 22.

3 Prior to 1891 the books and accounts of the Street Department were kept in such a manner that it was impossible to ascertain the comparative cost of, the different items of work. See the Reports of the Citizens' Association for 1889 and 1890.



from the corporation tax, so much from the departments, so much cash, so much from back taxes, and the entire amoun! of the tax levy for the year. Now, as taxes are never paid in full during the year of levy, this way of figuring out the annual receipts of the city would obviously result in a deficit, unless the other items of income were purposely underestimated. This I found to be the case the danger of appropriating too much money being averted by a systematic underestimation of the income from licenses, corporations, departments, etc. Why this fiction should have been resorted to I never could find out, and concluded that it was time that the revenues of a great city should be officially estimated according to the facts of the case, and not upon the theory that we could safely appropriate for the expenditures of the current year not only the uncollected taxes of prior years, but all the taxes of the current year. The calculation could be changed so as to conform to facts in one of two ways: either by deducting an arbitrary percentage from the taxes of the current year to cover the amount that would not come in before its expiration; or by leaving out of the calculation the receipts from the unpaid taxes of prior years, on the theory that the amount of these would be about the same from year to year; the other sources of income being, in either case, given at approximately the real figures. The latter course was selected for adoption, and for the last two years the several items of the city income have been estimated on the basis of what they were likely to be, the certain deficit in the item of taxes for the current year due to the non-payment of part of them until after the close of the fiscal year being assumed to be offset by receipts, not included in the estimate, from taxes of previous years unpaid at the beginning of the current year.1

A certain margin of safety must still, of course, be allowed, to guard against any unexpected shrinkage in taxes and

1 Compare the estimates of revenue contained in the message on the annual estimates for 1890-1 (Doc. 49 of 1890), and for 1891-2 (Doc. 27 of 1891), with the estimates for 1894-5. (Inaugural Address, 1894, Appendix A.




other receipts, and to cover the expenditures of those departments which are not under the control of the


SECTION 6. The Monthly Exhibits. The monthly reports of the City Auditor have been amplified by the addition of a debt statement, of a list of loans authorized but not issued, and of a calculation of the borrowing capacity of the city, as well as amended in other particulars; and a special statement is now published showing the payments during the last month of the fiscal year (January).

The Collector's monthly statements of receipts formerly contained only the receipts of the month; those now issued include the receipts for the month, and also the receipts for the entire fiscal year to the date of the report.

The Treasurer's monthly statements contain a statement of the amount of cash in the treasury derived from loans, income and trust funds respectively, whereas formerly the receipts from all sources were lumped together, and were used (apparently) without distinction to pay drafts of all kinds.

SECTION 7. Other Changes. Numerous other minor changes in our municipal accounts and reports have been introduced, with the object of facilitating inquiry. I feel confident that the changes and additions as a whole have removed the first difficulty in the way of a successful administration of our municipal finances, the difficulty of getting at the facts. It would be presumptuous, however, to assume that the opportunities for improvement have been exhausted. On the contrary, much remains to be accomplished,2 in the

1 County, schools, and, to some extent, police.

2 For instance: according to the calculation of " ways and means statement at the end of the Auditor's Annual Report, the amount of the tax levy is reached by deducting the estimated income of the city, from other sources than taxes, from the appropriations voted by the City Council. This is, of course, This is, of course, the way in which a city with unlimited powers of taxation proceeds; it was the way in which the tax levy for this city was calculated prior to 1885; it would be the way since the tax-limit law of that year if the city appropriated less than the amount allowed; but inasmuch as the practice has been to appropriate every dollar that the law allows, the theory on which this calculation of the " ways and means is ostensibly based is an absurdity.


The real way in which the appropriation and tax orders are now made up is first

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way of simplifying and systematizing the financial records of the city; and as the business grows, new methods of accounting will from time to time be found necessary.1


to find out what the nine-dollar law allows the city to raise by taxes, and then to add to it the amounts for county expenditures and debt requirements exempted from the operation of the law; the result is the tax warrant for city and county purposes. The appropriation order is then reached by adding to the total tax warrant the amount of the estimated income of the city from other sources. See Appendix, Table 6.

In other words, the actual process is almost the exact reverse of that shown in the statement of "ways and means," which in the future should be reformed so as to fit the facts of the case. It has always been correctly shown in the Auditor's statement accompanying the annual estimates.

This criticism of the system of municipal accounts and reports existing prior to 1892 might be carried much further, but no one who ever made a serious effort to get exact figures at the City Hall will dispute its accuracy. Those who have not had occasion to make such investigation, and who may be inclined to think the strictures in the text too severe, may be referred to the following extracts from the annual reports of the "Citizens' Association:"

From the report for 1889 :

"The advisability of changing the fiscal year of the city so as to make it correspond with the municipal year was carefully considered by the committees of this Association last year, as will appear by reference to the last annual report."

"Your committee addressed a communication to the City Council early in the year, setting forth the advantages of the proposed change, and requesting that the few amendments should be made in the ordinances which are required to effect the change. The matter was referred to the Committee on Ordinances, who gave a number of hearings."

"The City Treasurer and City Auditor appeared before the committee to oppose the change, but your committee could not see that the grounds of their opposition had any substantial basis.”

From the report for 1890:

The confusion caused by the multiplicity of our independent departments, the difference between the municipal and financial year, and the unsatisfactory method in which the books and reports of the several street departments are made up, all cause such hopeless confusion that it is entirely impossible for any one to know how our city work is really carried on, or how much it is costing, so that anything like careful and intelligent scrutiny and criticism on the part of citizens is quite out of the question. It is needless to argue that this is all wrong.


From the report for 1891:

"One of the serious troubles with our municipal system, as was pointed out in our last report (see pages 35-41), has been the faulty book-keeping and accounting in the executive departments. The reports were confused and unintelligible, giving very little information that was of any importance, and no two were arranged on the same plan. It was impossible to find out in any satisfactory manner what work had been

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