City Council - Regular Meeting

Recording in progress.

Oh, Jesus. See. If you don't if you don't knock it up, they don't even they don't even listen. Alright. Calling this meeting to order. This is the meeting of the school excuse me. Trying to take your job. Meeting of the city council. It is a special meeting of the city council. It is Tuesday, April 14. I am Lance Davis presiding. I use hehim pronouns. Please note that video and audio of this meeting is being recorded and may be shown live on local access government channels and on the city of Somerville website and will be available for future review. Clerk, please call the roll.

This is roll call. Councillor Ewenkampin? Here. Councillor Link? Councillor Scott?

Present.

Councillor Klingon?

Present.

Councillor Strezo? Present. Councillor Saeed? Councillor Wheeler? Here. Councilor Hart? Here. Councilor McLaughlin? Councilor Mbaugh?

Present.

Councilor Davis? Here. With eight councilors present, we have quorum.

Thank you. Councilor Link, I know is traveling outside of the country, so he and I chatted today and suggested he can watch this afterwards to catch up. Councilor McLaughlin is gonna be a little bit late and hopefully councilor Sate will be able to join us as well. Pursuant to rule 32, let it be known that this is this is the city council salutes this the flag of The United States and let us recall our oath to uphold the constitution and the laws of the commonwealth to the best of our abilities and understanding. This is a joint sorry,

joint meeting with the school committee, so the city council will now stand in

a brief recess while the the school committee meeting is called to order.

Pursuant to chapter two of the acts of 2025, this meeting of the school committee will be conducted via remote participation. We'll post an audio recording, audio video recording, transcript, or other comprehensive of these proceedings as soon as possible after the meeting on the City Of Somerville website and local cable access government channels. Separately call the school committee portion of this to order at 06:05PM. Superintendent, will you call the roll?

Through the chair, Laura Piton. Present. Michele Lipins. Present. Member Eldridge.

Present.

Member Green.

Here.

Doctor Stellman?

Present.

Member Baton? Here. Mayor Wilson?

Present.

President Davis?

Here.

Emily Ackman? Present. We have quorum.

Alright. Now calling the city council meeting back to order. And just for extra fun, get to call roll on that just to make sure no one's left their seat in a two minute time.

Roll call to reestablish quorum after recess. Councillor Ewenkampin?

Here.

Councillor Link is absent. Councilor Scott?

Oh, yeah.

Councilor Klingen?

Present.

Councilor Strezo? Present. Councilor Saeed? Councilor Wheeler? Here. Councilor Hart? Here. Councilor McLaughlin? Councilor Mbal? Aye. Councilor Davis? Here. Eight councilors present,

we have quorum.

Alright. Thank you. So there is one item on the agenda this evening. Madam clerk, would you please read that into the record?

Agenda item 8.1 in officers communication from the finance director pursuant to section two dash 47 of the code of ordinances and section six dash three of the city charter, reviewing the financial condition of the city with revenue and expenditure forecasts prior to the commencement of the f y twenty twenty seven budget process.

Alright. Director Bean, are you, leading us off here?

Testing? Can you hear me? We can hear you. Okay. Very good. Thank you very much, mister president, madam chair. I appreciate your

If you wouldn't mind, just just to start for the folks who are watching at home, introduce yourself and the folks you

have Of course.

I'm Ed Bean, finance director, city auditor. Joining me is also chief assessor Frank Golden and budget director Mike Mastroboni who will chime in as needed as we walk through the presentation. Assistant city clerk will be helping manipulate the presentation with the slides tonight. We have about 45 slides here and we'll cover a number of different topics. Charges to take a look at the financial condition, the macroeconomic factors that will affect the fiscal two zero two seven budget submittal.

I always wanna stress at this time that these are only estimates. These estimates are going to change. There are still unresolved matters. State aid is unresolved. Health insurance costs unresolved. We're in the open enrollment right now. Final debt service numbers, we will be borrowing in May. And the numbers tend to get a little bit better as we move along during the spring. So these are estimates that we have at this particular point in time. We don't know the parameters of the city budget at this time.

We're constantly working now to mitigate the situation and try to get to a a balanced budget here in the spring. There will be this is a general overview, so individual department heads during the budget process will talk about specifics, we're we're covering sort of the major topics in a in a summary fashion. Next slide, please, Nat Maddie.

And, if clerk record if the records reflect that councilor Link has joined us remotely from across the seas. Thank you for joining us, councilor Link.

So, I thought we would take a look at what's going on throughout the Commonwealth right now. This has been an extraordinary year. Next slide, please. Extraordinary year that we're seeing the headlines, almost daily, about the mounting fiscal pressures for municipalities. Most municipalities are navigating this perfect storm of fiscal pressures.

We've got skyrocketing operational costs colliding with the very rigid revenue limits of proposition two and a half. Health insurance, state mandated tuition for out of district special ed placements, big budget, drivers, pension assessments. All of these things are growing at a rate far exceeding inflation. We note that several communities are facing significant layoffs and staff reductions due to these budget shortfalls, notably Boston, eliminating 262 teacher positions. But it's also what's sobering is that some top ranked school systems like Winchester, Brookline, Lexington, they are cutting positions as well.

Next slide, please. What this has led to is an unprecedented number of proposition two and a half overrides throughout the Commonwealth this year. In this fiscal year alone, 54 municipalities placed 74 override questions on local ballots seeking more than 158,000,000 in additional tax revenue. A decade ago, the numbers were far smaller. In 02/1721 communities placed 26 override questions on the ballot statewide.

Municipalities are forced to go this route given the difficulties of funding municipal government under proposition two and a half. Of the overrides in the entirety, in the history, 254 of 305 Massachusetts cities have passed overrides. Somerville has never needed an override. We won't need one this year. We're not in the same position as some of these other communities. We've had two debt exclusions in Somerville. One passed, one failed. The one, of course, for to to build a new high school. And the second one in the eighties was to build the vocational wing onto the high school. That failed, but that was later funded with state legislation coming from from Beacon Hill.

Next slide.

I hope would reflect that councilor Syed has joined us, please.

Okay. This is an important piece of scholarship that I hope all officials will read and and and take a look at. And this is the report put out by the Mass Municipal Association. That is, of course, the key advocacy group that represents the state's 351 cities and towns. This described the financial crisis facing cities and towns brought on by inflation and limited revenue raising options.

The association followed with a series of recommendations that I'd like to just run by you right now because these are important lobbying points. Next slide, please. The first one is that state aid in Massachusetts is less generous than The United States average. Nationwide, cities and towns get about 31% of their revenue via state aid. Here in Massachusetts, it's 26%.

We're far behind other states, not even at the average. Problem here, of course, in Massachusetts also is we have limited taxing ability on the municipal level, and that is other states are able to infuse sales tax or commuter taxes or whatnot here in Massachusetts. That's not possible. The two major local aid accounts, unrestricted general government aid and chapter 70 educational aid. Next slide, please.

And the key account is unrestricted general government aid. This has fallen dramatically over the years. It's fallen 25% overall since fiscal two o o two, and you note the trough there during the great recession, and there were cuts in the early two thousand. Unrestricted general government aid has not kept place with inflation since the great recession since the great recession two thousand nine, 2010. But I think the next slide will show you something.

This is this this one always stuns me on this next one because I was here back when this was happening. State aid to Somerville remains below the fiscal two zero zero two levels in real dollars. State aid receipts to Summerville in fiscal two zero zero two was $6,161,800,000. 61,800,000. Twenty five years later, our state aid receipts total 55,800,000.

You can see, you know, in in terms of the history here, in the 02/2003, that happened during the administration of Bitt Romney when he was governor, who in my view punished a lot of the urban cities with reduction of state aid. And, you can see the big drop in 2010. The city lost $9,000,000 in state aid in one year, in fiscal year 2010. And you can see that there's a further decline in 02/2012 before it started to pick up again. But we are still far below where we were many, many years ago.

Next slide. What does that mean? Well, I liken the three funding sources, taxes, state aid, and local receipts to say the three legs of a stool. You know, if one leg gets weakened, the other two have to pick up the pressure here. So you can see way back in fiscal two zero two two two zero zero two, state aid constituted 38.2% of our revenue base.

Taxes, 42.68 percent. Here in 2026, that's dropped to 14.6 o percent. That meant property taxes had to pick up the slack over time. We are lucky in that we've been able to do that given our tremendous economic growth of of going over time. Next slide.

So, the other finding of the MMA is clearly proposition two and a half doesn't work for us. Between 2010 and 2022, real inflation adjusted spending on current operations in Massachusetts municipalities grew at just point 6% per year. That's slower than The US average for local spending growth. It's also slower than the growth in real spending in the state budget, which grew at a pace of 2.8% a year. Bottom line is that the overrides that are being sought, they're really stop stop gap measures.

They're not a long term solution. Next slide. So, what does the MMA recommend? Number one, we need to prioritize key accounts. We need to I'm sorry. I'm missing I'm missing my slide here. Let me My apologies. Let me grab that. We need to restore adequate and reliable state aid, and that's in the unrestricted general government funding. So the MMA is lobbying the legislation to provide 351,000,000 in new unrestricted general government funding, an increase of 26.5% above fiscal two zero two levels.

Secondly, we need flexibility on the proposition two and a half. So the MMA is not recommend recommending elimination of two and a half, but they are recommending that it be tied to say an economic indicator like the CPI and to permit multi year overrides, allowing voters to authorize an override that phases in over multiple years. Next slide. Prioritize key accounts, support the continued investment in chapter 70 school aid and reforms to minimum new aid levels for districts. At best, we're getting $75 per student, chapter 70, as minimum aid.

Fully fund the special education circuit breaker, charter mitigation funding. We have a charter school here that draws from chapter 70, and all school transportation accounts. The next one is something I've spoken about here in the last couple of years, the municipal empowerment act, which the governor has filed with the legislature. We're not seeing any action right now. I would hope there would be some action by by the end of the session.

But that that piece of legislation will allow us to raise the meals tax ceiling. Currently, we get three quarters of 1% of sales. The legislation would raise that to 1%. Increase the hotel motel lodging tax from six to 7%. Introduce a local option surcharge and motor vehicle excise bills.

All these three, we had calculated would raise us an additional $1,800,000 in revenue that we would surely, of course, need in the next fiscal year. And finally, something that we have long sought here in Somerville is a real estate transfer fee dedicated to local affordable housing trusts linking property market activity to housing affordability investments. These are the key lobbying efforts of of the MMA, which I think we all should be aware of and be supporting as best we we can. Next. Okay.

So, we're not in the same dire situation as other communities right now. We are not experiencing the same level of distress. We do have a budget gap, but I do believe we can contain that with limited disruption of our services as we move along into fiscal two zero two seven. And I you know, in Somerville, despite these two and a half limits, residents continue to ask for more services and the city has responded in kind historically as you can see. Budget has grown tremendously and this is really a result of the expansion of the of the commercial property tax base, tremendous and unprecedented economic development, prudent management over over time.

So, the general fund budget has grown from 211,000,000 in ten years ago, fiscal two two thousand sixteen, to 381.5 in fiscal twenty six, increase of 80.8%. And so, it's actually accelerated during the after the pandemic where where our budget growth was 7.78%, and the school budget has increased over the last ten years by 6.2%, but over the last five years by 7.88%, including that 10% increase in fiscal two zero two three to deal with the effects of the pandemic on on students of education. So this this year, we had to tighten our belts quite a bit here in fiscal two zero two six because our and we'll get into that. Our commercial property tax growth has declined. The budget increase of the general fund this year was only 5.54%, which is a lower a lower increase than we've seen in recent years.

Next. But all this activity over time is important. Investments in families, youth, and our schools are found throughout the budget. These programs and facilities are essential to our work and as a as a community. And our goal, of course, always is to try to maintain these services as best we can. Next. Section two, where we stand now in fiscal so just a brief recap before we get into the fiscal 02/00/2027. Next, please. So, we quick performance review. By the way, most of these stats are on my website, on the auditing finance department website.

We can always see where we stand in terms of our appropriations throughout the fiscal year once the the meetings once the months are closed. So, basically, we are through 77% of the fiscal year, and we have expended 74.58% of the general fund appropriation. We're in no danger of over overexpending the appropriation either city or school. It appears looking at last year at this time, both city and school are spending at a faster clip, so the amount of money that will be unexpended at year end will be less and which means probably a lower free cash certification from the state. Next.

I didn't include a I'll mention revenue. I didn't include a revenue slide. We revenue is on target right now in here in fiscal two zero two six. We'll probably exceed our revenue budget by by less than 1%. The revenue items that are not coming in at budget, we'll get into this more 02/00/2027 meals tax, building permits, and investment income are not gonna meet the budget, but we will still probably have a revenue surplus at year end.

Snow and ice deficit. So, we should be able to contain any problems in the general fund budget with transfers, which will be presented to the council before the end of the fiscal year. Of course, our big issue, as as we all know, we've had a difficult year with snow removal. Based on current projections, the deficit's about $3,500,000. That might be a little bit lower when we close out or encumbrances.

So, our part our part our expenditures are 5,200,000 roughly. Appropriations, 1.7. This is the only account where you can legally run deficit in municipal government, but we always wanna get that cleaned up by June 30. Otherwise, it goes into next year's tax rate. We can't have that happen.

So, we the DPW is not looking at any lag monies in their budget plus free cash. So we will appropriate free cash and DPW lag monies to eradicate this $3,510,000 deficit. Next one, please. Unemployment compensation. That would be the only other category that I think might require supplementation from free cash.

And this is not uncommon when we change administrations and people leave or whatnot. So we we expecting a deficit according to the budget director here of $288,000, which we will deal with through free cash. So moving on to fiscal twenty seven. Next. Okay.

So here are my revenue projections at this point in time. The goal is to get these numbers up before budget time. Property taxes. The assessor is estimating that new growth will decline from the 7,800,000 this year to 5,000,000 next year. We'll get into that in a bit.

And we will tax, of course, to the prop two and a half levy limits. So, that will bring in $11,900,000 overall, including the money the tax money needed for the debt exclusion on the high school. The state revenue in here is the governor's proposal. I am optimistic that that will go up as the legislature, the house, and the senate start to look at these revenue accounts. They generally generally goes up.

Fines and forfeits, they're down because parking enforcement people are obeying the law in terms of traffic violations in the parking department. I think the the installation of the cameras in the bus stops, you know, people people are not people are not violating the law now, so that's a good thing. But parking fines are gonna be going down by from a budget perspective of 400,000, but that's the $3.75. We are intending to increase fees where we can. We'll get into that in a bit.

So, the sanitation fees, we are upping the commercial trash fee in DPW because it's not meeting costs. So, that will bring in another 200,000. Electric ity usage, these are the charging stations. They will be expanded in fiscal two zero two seven. That will raise us a little bit more revenue.

Other financing sources, we use parking meter receipts to net down the tax rate. Given the installation of parklets and some of the construction going on on streets, media the trip the parking director tells me that parking meter receipts are probably gonna drop by about $200,000. Investment income is gonna be down because interest rates are are going down. So interest rates were at sort of a bid 4%, maybe four and a quarter. The the treasurer is projecting that they will be in the high twos or low threes.

So this is the revenue projection right now. We can raise an additional $12,700,000 in fiscal year 2007. The next slide is a graphical slide basically showing the proportion of of revenues. As you can see, property taxes is our overwhelming funding source, and again, it is limited by proposition two and a half. Next.

So, I'll run you through the calculation of the tax levy and how we project property tax revenue. So, you start with the this year's property tax levy, two seventy two six sixty one sixty six. Now, I just wanna stress unused levy. This is not by design. When we set the tax rate, we the assessor and I are required to use the DOR gateway system.

I think

we spent about half a morning trying to manipulate the number to get us to the levy limit that we couldn't under DOR regulations. So, there's a hundred ninety eight eight zero six of unused levy. That will equal adding those two ups equals the two zero two six levy limit. So, we take that we take the the fiscal two zero two six levy limit and multiply that by two and a half percent, plus the 5,000,000 estimated new growth that the assessor's estimating will equal our $2.00 $2.07 levy limit. Levy limit on, you know, that will that will which we can fund the general fund operations with up to that amount.

We add on the the fiscal two zero two seven debt exclusion, and so our 2027 projected levy is $2.91 $3.42. So, we can raise potential 11,900,000 for the entire including debt exclusion in fiscal two zero two seven. That's how the calculation works. We're limited to that. Next slide, please.

And, you know, the assessor's gonna chime in here to talk a little bit about this, but our biggest financial issue right now is the decline in the commercial property tax revenue coming in. This shows the history. Our peak was in 2004 with 17,700,000 in in new growth was realized. These are by the big developments. That then dropped to 14.1 fiscal $2.00 $2.05.

And then we saw a very steep decline this year in 02/00/2026 to 07/2008. So, this creates a real strain on our budget going forward, and the accessory is projecting $5,000,000 new growth in 02/00/2027. We frankly don't think that the economy is going to turn around soon, so we're gonna pencil in 5,000,000 for the next three years. Now, $5,000,000 most communities would envy getting $5,000,000 in new growth. So it's a dramatic drop for us, but it's still a very, very good number.

So, what's happening here is development has stalled. Inflation, construction costs, high interest rates, that's made financing for new development projects more expensive, causing many planned commercial projects to be delayed or canceled. The assessor and I and mister Galigati and his team spent some time last week just walking through the city, you know, with on on on on the GIS system and and, you know, it's it was sobering that we're not we're not seeing a lot of activity taking place. You probably read this, you know, situation in Boston with this declining commercial property values because of the vacant office buildings. For us, it's gonna be the lab office buildings.

Next slide. And, I'm gonna ask the assessor to maybe comment on on the new growth situation. He's got this one.

President Davis, through you. As we know, we've had 10 life science buildings built in the city. Five are stabilized. We're looking at a vacancy currently of 1,900,000 in square feet. I'd like to point out that one eighty eight assembly, we've secured a TIF at this property with TransMedics, a company that in a short period of time will occupy this building in two phases.

So, you'll be removing roughly 500,000 square feet from that 1.9 vacancy, which is exciting. However, that growth will be captured over a ten year period starting starting in year three. So, it's encouraging. We'll get our growth, but it'll be slow. The hope is that the other four buildings will follow suit whether or not they're tips.

But, if we could get some life science interest in the city, that'd be phenomenal for all of us. But, at the moment, there's just a lot of conversations going on with the other four buildings in terms of tenants. So, this is what's causing a lot of the growth declining. When you have five buildings of this size that are vacant, it's the values drop because the vacancy, the cap rates, the interest in the market is saturated. There's 15,000,000 square feet of vacant life science in the Greater Boston area.

The appetite at the moment is about 2,000,000 square feet a year. We predict that it's gonna depreciate again. Hopefully, not as much as it has in the last two years. There's very little growth to capture until one eighty eight assembly gets going. It looks like it's gonna be fiscal year twenty seven permits. Last I heard, we were hoping for '26, but they're trying to get organized to do this as quickly as possible. And, we we feel it's coming very shortly that you'll see some permits get pulled over there.

So, mister president, that's important. Speaking with mister Galigami and his team today, they're gonna attempt to meet with the company executives at TransMedics. The building permits are important to us in terms of our fiscal two zero two seven budget. So, we gotta get a clear sense when they're gonna get pulled and what the schedule's gonna be. So, that will be a major factor in if we can get some updated information soon, then we can adjust the numbers that are in front of you for for building permits and revenue.

There was an agreement to waive some of the building permit revenue. I don't you know, I I estimated even with the waiver that we get a million 8 in building permit revenue from TransMedics. So that's gonna be a key discussion and that that will be a key factor as we move forward here in the spring in terms of the the budget. Next slide, please. So, I just ran through the year increases for property tax revenue with taking out the debt exclusion here.

So, you can see the drop 23.7 in fiscal twenty four, additional property tax revenue we could raise, coming down to 12 on the general fund outside of the tax of the debt exclusion. When you when you when you factor the debt exclusion, it's 11, but we can use 12 for our general fund operations. So, that's a that's a that's a big decline. Next please. So, I mentioned building permit revenue.

This has been a core revenue source. It is an economically sensitive revenue, and again, the decline in development means a decline in building permit revenues. Big developments generated the bulk of the money. The highest amount, 02/00/2022, was 25,100,000. It dropped to 18.7.

In 02/00/2023, 11.1. And, in 02/00/2025, '5 point '4. Now, one question gets raised occasionally, you don't you always build a budget based on recurring revenues, sustainable revenues. Building permit revenue is variable, so we certainly wouldn't have budgeted all of the 02/2001 as part of our budget. If we did, then we'd have massive cutbacks in the succeeding fiscal year.

So, we've tried to budget the billing permit revenue at 8.5 and then drop it to 5.5. Excess revenue flows to free cash. This is the then, we appropriate that to stabilization funds for a lot of our capital projects that are upcoming. Now, in terms of this fiscal year, we dropped the budget to 5.1. What ISD is telling me is that we see a decline in the small building permits, that's developments of a 100 k or less, and of course, we don't have big projects.

So, we're gonna be about 500,000 short this year the two zero two six budget and building permit revenues. But, next year, actually, will be higher. We're gonna budget 5,800,000, so that's roughly a $700,000 increase because several mid sized developments are expected to file building permits. $2.99 Broad way, 108 prospect, $5.00 1 mystic, 24 Webster, 37 Allen, according to the ISD department. So, we will be able to raise more building permit revenue next year than we do this year, so we're factoring that in.

I mentioned TransMedics. So, the number 5.8 does not include any building permit revenue from TransMedics. So if we get we get some clarity on that, and as long as they pull building permits before, let's say, November, when we set the tax rate, we can include that in our budget projections. So that's very, very important. Next.

Excise tax revenue. This has been a valuable part of our revenue base, about $13,000,000 a year. Excise taxes, meals tax, hotel motel, motor vehicle excise, retail marijuana. So, just briefly, the hotel motel excise continues to grow. The hotel motels are charged 6% of sales from municipalities.

That also includes the short term rentals, the BNB situation takes place. It's about 35% of the of the revenue base. I'm expecting this source to exceed budget in this fiscal year by about $57,000. Looking at the economic indicators in the Boston Cambridge area, Metro Boston area, expect Expecting a 3.5% revenue per room increase, so factoring that in. Plus, the good news is that we've heard of a of the new hotel opening up on Beacon Street that's coming online.

That's 35 Quay. So, we're gonna add all of that in. So, I'm expecting to raise that excise motel motel by $268,000 increase in budget 3,500,000. Retail marijuana is also growing. We don't get we don't get specifics from DOI. DOI doesn't tell us exactly what entities where this revenue is coming from. They claim it's taxpayer confidentiality. But, we had a projection of 440,000. My projection is 440,000 will come in this year. We budgeted $3.93, so we're gonna exceed budget there.

We're gonna increase that by 3%, so we're looking at about 453,000 per well, that's an increase. $453,007.52 will be the budget for retail marijuana. Those two are are doing very well. Unfortunately, the meals tax is flat. I mean, had tremendous growth in meals tax over the years.

The last two, three years, we do not see growth. The growth from 02/00/2023 to 02/00/2024 was point 73%, and from 02/00/2024 to two zero two five, point 01%. I don't know. Perhaps, you know, with the economy, maybe people are not eating out as much. I don't really know, but you will try to we're gonna have to level fund that one in terms of revenue projections in the next fiscal year.

Motor vehicle excise is a huge number. This one is very hard to project because the motor vehicle excise commitments come out in the spring. We just sent one out in April. There's gonna be one in May. Question is, will will new car sales deteriorate because of the cost of new cars and the interest rates. That's a that's a part of it. So, I'm going to raise that one by 02/1999 on budget, and I will come up with better numbers before the budget on that one. So, those are the excise tax revenues. Next next one, please. Alright.

So now we get to state aid, which is the governor's proposal. Again, you know, what we we face at budget time is the the legislation doesn't work on our budget schedule. So the the house apparently will release their budget later this month, the senate in May. And generally, get better numbers. So the governor's proposal proposal and I just wanna make a distinction here for, you know, for for for new public officials.

This is a these are the cherry sheet revenues that fund our core services, schools, public works, police. There's a distinction between this and any of the categorical grants we get from the state that do not flow to the general fund. So the main local aid account on restricted general government aid, was increased by 2.5% over the fiscal year 02/00/2026 number. The state revenue growth, by the way, is 2.9%, but this is 2.5%. So, that's an increase $782,309.

The governor proposed a minimum age figure for chapter 70 to 75 per pupil. So, as you can see, that comes up to 381,000. You remember last last year that the legislature intervened and it was a $150 per pupil. I'm hoping that will happen again. I think that's more probable than not so that we'll be able we'll be able to get a little more money in. And, of course, these are blunted by the charter's tuition reimbursement, which has been reduced by $510,730 dollars. That's a very variable number. That number may very well change when the house and the senate weigh in. So, increased receipts of $7.39 $1.00 2. Next, please.

And, of course, we attraged assessments. You can see the assessments here. The big assessments are gonna be the MBTA and the charter school tuition. So, what you do And then, next next slide please. You net them out, receipts minus assessments. So, that increases state aid by 2.3% or 09/5743. Okay. So we anxiously await what the house and the senate will do in the hope that we can get a little bit more money from the state. Alright. Next, please.

So let's look ahead to fiscal two zero two seven. Next. Well, needless to say, public schools continue to be our number one investment. That has been the case historically in terms of budget increases and money. I know that I I knew mayor Jake Wilson considers public schools to be the number one investment, and we're gonna continue to fund and and and and and replicate our successes going forward. Next slide, please. And, this just shows you the proportion. The schools are 30%. Public safety, number two. Public works, number three.

Just gives you an idea of the budget composition here that in terms of the level funded budgets here in fiscal two zero two seven. And into some specifics. One slide that we use in these presentations is just to remind folks that fixed costs have an overwhelming percentage of the municipal budget. Salaries, 53% of the budget. Health insurance, 9.7%.

The city funds 80% of premiums, and that's for current employees and retirees. 4.8¢ 4.8¢ of the budget for pensions. Adding them all up comes to 67.5% of the budget. These are recurring costs and they magnify year by year, and if they get out of control, then it gives us very little discretionary income for any of our projects. Next one, please.

Key components of the base budget. When we refer to the base budget, means fixed cost is a proportion of the overall budget. There are essential services, operational costs, maintenance to keep our city infrastructure, parks, and public spaces in top shape, and investing in them to mitigate long term costs. The base budget will increase, fixed costs increase, and we need to keep a close eye on that this because we are under the prop two and a half levy limit. And, if we don't have legislative relief here, we're going to be in a situation coming forward if in terms of how we're going to fund our essential services and the services that we have built up over the last last ten years or so.

And that's my point in the next slide. Higher base exposed system

Director, if you just pause one moment if the clerk could recognize counter councilor McLaughlin has joined us. Go ahead. Thank

you. Higher base exposed system myriad pressures, prop two and a half. Long term costs on the base of adding new positions, you need to be careful about, at this point, adding a lot of new positions on the budget, inflationary pressures on contract values, and ensuring capacity for unexpected situations. So so a major cost driver, think, this year is health insurance. We've spoken about this last couple of years.

The city moved to the group insurance commission back in 2012 to be saved with $7,500,000 that year by doing so. And, most of those increases from the GIC have been modest, they're probably between 35% a year, but the last few years, premium premiums have skyrocketed. Of course, one major reason which you've all seen is the increased costs resulting from the GLP one weight loss drugs and increased utilization of them. Again, it's significantly driven up claims. High provider prices, high cost of hospital and provider services with specialty care, rising utilization of medical services, and market consolidation.

Consolidation, a small number of major provider systems and insurers, along with hospital price variation consolidating in the in the health insurance industry. So, the legislature backstopped some of the costs in the GIC. We were looking at probably a much higher budget increase earlier in the year. The projected increase is 2,800,000 on the budget in fiscal two zero two seven. The average increase per plan is 8%, but we note here that the Harvard Pilgrim employer is the city's most common plan, and that and that is going up 14.7% on a family plan.

Current caseload is 2,987. That includes retirees, all city and school employees. That's up 17 from the prior year, which is actually not bad. I thought it would go up a little bit higher than that. If we add new positions to the fiscal two zero two seven budget, that will increase that amount. The city contributes 80% of the premium, 20% to the employees. We're going through the open enrollment period now. The hope is that some folks move to lower cost plans, and if so, that may change the number, but that's what we're looking at right now. Next slide. Most important cost is labor.

The city settled a number of collective bargaining agreements in fiscal two point two six, And, we plan we always wanna plan for money for our collective bargaining and non union employees. We set up years ago a stabilization fund, a salary stabilization fund. This year, we drew down 7,700,000 from the debt stabilization fund for police school custodians and for the teachers settlement back in July. And, of course, we we use wanna use free cash to continue to build up that stabilization fund. So we budget on the city side for for for fiscal two zero two seven projected expenses on a salary contingency account on the general fund.

So we always wanna be very cognizant that we fully fund these these these things. There's a few I think there may be one more settlement that might happen this fiscal year, and if that's the case, we will have to build that into our projections for the for for next year. Next, please. Pension. So, the pension appropriation will increase by $451,030 fiscal two zero two seven.

We we did have a very good investment year last year for the pension system, well over 12% investment earnings, and that kept the pension appropriation down. I serve on the retirement board. I chair the retirement board. Mister Masturboni also sits with me on the retirement board. Long term liability is a 114,000,000.6.

We will pay off that liability in fiscal year two zero three three. Next one is debt. So, what you see here is our amortized debt for fiscal two zero two seven. That's debt we've already borrowed for and we're required to pay. So we're going out to market in May and for our current capital projects, And, my estimation right now is $1,800,000 increase for those projects.

That's assuming a long term bond rate of 3.8. Last year at this time, we got a rate of 3.9%. We're a triple a rated city. I'm hoping that we can do better than the 3.8. If so, the number is gonna go down. That will reduce the appropriation. The high school debt exclusion will be a little bit less this year, 6,600,000. So the general total general fund debt is 23.4. When we get to mitigation, this is an area that I think we can mitigate in terms of our budget deficit, but we'll we'll go forward. We'll talk about I think we're going to mitigation now.

Next one. Okay. Alright. So this is where we stand right now. We're looking at a $4,500,000 gap between revenue projection and the level service projection for all the budgets, school and city, at this particular point in time.

At this time last year, we had a $3,000,000 deficit which we were able to deal with. First of better numbers that came in both on the debt service and state aid, as well as cuts on the on the city side primarily to get us down. So, we need to work on this between now and budget time, and there's a number of tactics that we will employ and that we're gonna look at before we even look at cutting budgets. Next one. Okay.

So, I look at this as a revenue problem compounded by prop two and a half. So, we want to initially we want to Number number one strategy, of course, is to enhance revenue as best we can. That means the city is now looking at evaluating all fees, fines, and permits right now with all of department heads to a cost recovery lens to charge appropriately. You know, every little bit helps, so we're looking at This thing needs You know, revenue should be reevaluated, these fees, on a regular basis. It's been a while for some of them.

So, that would be our first tactic is to try to raise raise more revenue. We've already got a few commitments in terms of increases. So, that is gonna be important. Secondly, council. We're going to use reserves.

I mentioned this $1,800,000 increase in debt service. Looking at our reserves, we've drawn down about 17,000,000 of reserves this year for a variety of things. We can draw down another 14,500,000 between now and June 30, and what I would like to do is apply those reserves towards the debt service for these projects that we are contemplating going to market on. And, that will that will We got a number on that, but that will reduce the deficit somewhat. Reserves should only be used for one time only expenses or capital projects.

We will look at reserves for anything in the 02/00/2027 budget that is a one time purchase or whatnot that we need to do. So, will look at this seriously as as a budget mitigation strategy. On the city side, we're looking at all vacancies right now. And, we're there are a number of open positions. We'll make some decisions on whether we will continue to keep those positions or not.

That's certainly a more painless way of dealing with this budget situation than going to any fill positions. Obviously, the goal here is we we don't want layoffs, city or school, and I think that that's I think that's quite attainable, and if we utilize all of these tactics and as best we can. Audit expenditures, so we have asked all city departments to come up with focusing on non personnel expenses, a 5% reduction as a scenario, as a planning scenario. We've also asked the school department to look at a tiered reduction scenario. We don't wanna get to that unless we unless we have to, and we won't know exactly.

If we do have to cut budgets to some extent, we really don't know what that is at this particular point in time. We wanna get these other we other mitigation strategies in place, especially on the revenue side. Next. So we in terms of examining and updating fees, the mayor has is going to be forming a working group to meet with Tufts University and to look at the pilot payments, possibly negotiate a new agreement. We haven't had a pilot agreement, a formal one with Tufts since 2017.

We'll be taking a look at other other potential pilot payments as well, but most of our pilot payments are from small nonprofits. I I already mentioned that we'll use stabilization funds to net down the borrowing and one time costs, vacancy control. We're taking a very, very hard look on the city side of any discretionary spending, such as travel and conferences, as well as the indirect costs for water and sewer enterprise. We can legally charge the water and sewer enterprise for any cost that the general fund provides. We get that now, but we we haven't evaluated, reevaluated that in several years.

So, these are tactics that we need to move on, and we're we're kinda working on these things now to try to get that $4,500,000 budget deficit down. Next slide. But, as I said earlier, there are several key budgets, several key events when we quote to to borrow. Hopefully, we'll get better rates. State aid, we are relying on the governor's figures right now, and on health insurance, we have open enrollment still in place.

So, I think there's a lot of work to be done here in the next six weeks or so, but the goal will be to try to get this $4,500,000 gap in a a resolvable way and and in the most painless way for all. I think I've gone through the presentation. Oh, there's one more. Well, I don't have that slide Wendy. Okay.

The $2.00 $2.07, as it says here, will be predominantly level service with few targeted investments. The administration is looking for some is looking at a new form of decision making, a cabinet structure, so there'll be some organizational reform here, and so you departments that will be reconfigured, renamed, moved, incorporated into existing budgets. We'll make these changes very very clear. We will work to mitigate the level of service deficit through revenue where appropriate, and long term fiscal health is a major priority. We must focus on a sustainable base budget and use one time resources cautiously.

And, I believe that's the presentation. Open to questions. Thank you. Questions?

Councilor Clegan.

Mister president, through you, I just wanna ask, as far as the GIC goes, it's Overall, it's still the best deal we can get or how could we Or could we not even get out of it at this point?

Yeah, mister president. I was I was serving on the transition team in Everett for the new mayor earlier this year, and I was stunned to see. They're self insured with health insurance. Their health insurance went up $6,000,000 in one fiscal year. So, we moved off the self insurance in 2012. We saved $7,500,000. So, the GIC is is a far huge pool that, you know, in terms of purchasing. Plus, let's let's also be reminded that the state did backstop the GIC this year. I I think it was $200,000,000 that they threw in there, you know, which you're not gonna get in a private situation. So the private rates are higher.

I've I've talked to a number of folks here, so it's it's even worse in a private situation.

Thank you. I just had to ask for the public watching because I know that you know, like you had said, the the increases previous to I think three years ago were very minimal and now we've just seen this explosion. Like you said, mainly mainly due to the the GLP ones. So it's just been quite a shock coming from the GIC which was supposed to stabilize rates to some degree, but even they're not immune to this explosion. Thank you.

On that point, mayor? Go ahead.

Yeah. Thanks mister president. I was talking to a mayor out in Western Mass that is a non GIC community and he said that they were seeing a 22.4% increase in their insurance premiums this year. So it could be worse.

Thank

you Mr. President. Through you, all three of you, thank you very much. We're very lucky to have you all here and your teams. I think the question that I'm anticipating getting the from members of the public is, you know, you opened your first slide is about these really scary situations we're seeing in other communities, and then we're ending on what's like kind of a note of relief, right? That like the worst we're looking at, at least according to this is maybe vacant positions getting a a tough look. How would you explain to a member of the public kind of what's the difference between what's going on here for some of those kind of worst case scenarios we're seeing in other communities? I mean, you just gave us a whole presentation on the details, but kind of to to summarize.

Well, president, number one, we've had that tax base growth over time, and we have built up reserves. I think we you know, we've taken a very prudent management style here as well. I think that we've some of these other communities haven't had the the the tax base that we've had, especially the suburban communities. Like, Malden is probably the only, you know, real big city that's gone for an override. They never went for an override before and they lost that override now.

So, even $5,000,000 in new growth is is far better number than we're seeing in other places here. But, you know, it's the tide is turning right now and that, you know, we have to be thinking about the the budget base here. And especially as we move forward next next year, we'll be going for a debt exclusion on a new school, and we'll be presenting that before the the taxpayers. So, we wanna stay out of an override situation if we possibly can, I think?

Mister mayor?

Mister president, he's too modest to admit it, a big part of the reason that we're not in a worse position is because of director Bean. Along with the just the new growth that we have had that has differentiated us from other communities. That's those are the two biggest factors I'd say right there.

Let's go to the mayor of Greene.

Thank you. And I wanna actually thank the mayor for highlighting the importance of that new growth. Because when I look at the state aid numbers that you pointed out, I got to be honest, it feels kind of bit disingenuous. Yes, we were getting a smaller percentage of our budget from state than we were twenty years ago because we were a much richer city than we were twenty years ago. So I'd love to have some information as to how you disaggregate the impact of state aid which to to your by your chart has grown faster than inflation for the last twelve fourteen years even if it did cut before that with new pressures coming from a state government.

That's right. I I can see we should be getting more weight in the state, but why is that different now than it's been for the last fifteen years where we've outgrown inflation by your measure? Well, mister president,

first of all, I think the state government should give municipalities the flexibility to raise more with new revenue sources, which you can see which we don't have here in Massachusetts, which we have in other communities other states, I should say. Yes, we have grown the property tax base, but that, you know, but that hasn't always happened in the certainly in the early years, in the year 2000, where our new growth was like 1.2 or 1,500,000. The state really wasn't pulling their weight in terms of municipalities. I think it's it's, you know, just in general, think there's a clamor throughout the state with the legislature at this particular point in time. I mean, this municipal empowerment act, what's the problem with giving us the opportunity to raise the meals tax or the hotel motel?

That's a local option. Leave it to the leave it to the municipality to make those decisions. We don't even have that type of openness right now from our our leaders in in state government. So, I think that the the the limitations of proppants Proposition two and a half are problems for You know, gonna cause problems for us as well. Know? So, there needs to be some thought on the state government leaders to to make appropriate changes and give us more power, basically.

Others? Councilor Trezeb.

Thank you, mister president. Through you to director Bean. In one of the on one of the earlier slides, snow yeah. FY '26 snow and ice slide talked about snow removal and and whatnot. And I know that we had the SMEA, the the they changed the name recently, but the the new union contract and hopefully and we had a lot of vacancies in DPW.

And did some of that get did we hire some more DPW employees? Are we or are we still paying a lot of outside contractors for snow removal? And are we still purging all that extra money from the outside contractors instead of in house? Has any of the have any of those numbers changed from last year's budget to this year's budget?

Mister president, think the DPW commissioner will have to answer the question. I don't think we could remove snow without having some outside vendors. I don't think we could hire enough employees to do that. I think yeah. I think the costs have gone up quite a bit this year obviously because of the nature of of the snowstorms this year that needed. But, I think this is a, you know, a question you could we could raise you could raise with the DPW commissioner during budget time as well. I'm sure he can discuss that with you.

Mister president, through you too, director Bean. Right. I definitely want to talk to the the DPW director on that, but wanted to know if if if that is also a factor with you when you weigh in how this looks as well. How many employees we have versus how many employees we'll have or we had last year. Does that in any way factor in with you? So for instance even just like with water and sewer where we had numerous vacancies and yeah.

Yeah, mister president. I think in terms of the snow removal, think, you know, I I I don't no. I haven't asked I haven't asked specifically how many employees were involved in the operation vis a vis vendors, but I don't I think the situation is, given the magnitude of the storms or whatnot, I don't think it's realistic to be able to say that you can hire enough employees to handle this and do that quickly. It's an emergency situation. So, there are a number of vendors that they have on the side, you know, that they would call on, that type of thing to do this.

Did you wanna add to that?

Thanks, mister president. Yeah. Just Commissioner Weisman's not here, but I just wanna just clarify. In case the public gets the wrong idea, we don't have year round positions of snowplow driver in the city. What we have in DPW are people who are able to, they have the correct licensure and they are interested and able to go operate snowplows. So, the capacity of that in house is dependent on who can be pulled off of doing other things to go do that plowing. And that varies year to year. Yes, to the councilor's point, not having vacancies increases the odds that we have those folks, but that is sort of you know it's an interesting factor in having gone and watched the operation firsthand. I'd encourage everyone to do the same.

Mr. President,

yeah. Through you Mr. Mayor. Yeah, totally agree with you that yeah we had we had pummeled with snow this year confirmed. And right, it it it is variable but we all know and and my larger point of that is how as we talk about further down on slides of how we're going to be tightening or finding which vacancies in which departments we have, which ones we can hold off on a couple years and tighten our belts as we go.

How does that factor in with DPW? How does that factor in with the water and sewer department? How does that factor in with our services and the general or the outside contractors we're going to use? How does that factor into the budget and has this preliminarily been included in that or is that more we're going to see in a month or so how that the conclusion, the great big conclusion? I don't really know if that needs an answer. Maybe that's just oh, cool. There is. Okay. Mister president.

President, Mike Mastroponi, budget director. Thanks for the question. As I understand it, and and and agreement with mayor Wilson, having more public work staff in positions 100% pushes us towards less contractors. In terms of vacancies, we're evaluating vacancies in a number of ways, but first and foremost is core cities are maintaining and preserving core city services. TBW is a huge part of that, they're a massive part of that. Expect those type of positions that we then lose out on them and have to farm out additional work for plumbing or carpentry work and pay a premium on that. So, wouldn't expect at this point things can change. I wouldn't expect significant movement in that area.

Stalman.

Thank you. To the chair. Given

that the Summerville Public Schools are a top priority, which is great, what can we expect in terms of avoiding the need to cut critical services? What can we expect to be able to enhance the significant improvements that we have been seeing in the presentations from schools across the district and being able to build on that success costs a lot of money. What can we expect?

Mr. President, we can expect to work very hard in the next six weeks to mitigate this deficit. I think in terms of, know, school's first priority. There may be cuts on both sides. I think they will not be exorbitant cuts, but we just don't know the parameters right now.

So, I think we have to look at various scenarios and contingencies. And, we'll continue to work on our end with the school administration, with mister superintendent Komona and mister Baretta. And we meet regularly on this. We meet every two weeks, I believe. And I update the mayor and I update folks with the condition of the city, you know, any new events that take place.

And we get to a point where we understand where the deficit is, and then there'll be a question of prioritization of services. We wanna keep the essential services. We wanna keep our gains, you know. So we're looking very carefully at discretionary monies in the budget right now, at least in the city side. Things that are not critical that could be jettisoned, you know. So I think it was still this is a work in progress basically.

Mister Mayor, on that point?

Yeah. Thanks, mister president. This has come up in the school committee and I committed publicly to the school committee, and I'll say it again here. We're looking to avoid that scenario of having to make those contingency cuts. Should we be in a situation where our read is that revenues are lower than what we need, and we have to make those cuts and the revenues come in higher, which is a thing that happens, I committed the first things we'll put back in would be any contingency cuts made to the school budget because we wanna see that at that level service.

I'm my colonel O'Snan. School committee member Baton. And going in order for folks who haven't spoken yet, have school committee member Lippins, then we'll come back around for a

second, John. Thank you, mister president. Through you. Through through the chair also. I don't know who's who I'm looking at here. To director Bean, thank you. And also just thank you to the mayor for that commitment. Cuts on the school side because of how our school budget is constructed. We're 85% salary. So, I wanna be very clear with everyone that it will be very difficult to avoid very painful cuts if cuts have to come from the school side budget.

One piece I didn't hear in the presentation and would be very interested to learn is on the Citi side, what is the proportion of of allocation that goes towards salary versus the proportion that goes towards non salary? And in salary, I'll also just extend, you know, insurance and and sort of personnel associated costs.

Yes. Mister Masrovoni has I? Do you? Oh, I'm sorry.

Mister president, through you, I I don't have that off the top of my head. Last time we looked at it, I mean it's it's getting close to that 80% figure on the schools. Right? Municipal government is about people doing work to solve problems in the community. It's pretty consistent across the board. You know, the the health insurance sits on the city side which covers both the schools and the city. But we're in the same ballpark around there. I think last year it was somewhere around seven in the seventies. But it's it's pretty close.

Member Lipids.

Thank you. Through you, Mr. President, to the mayor. We just had our presentation about the proposed cuts, which are terrible to more terrible. Thank you for your commitment to ensuring our public schools are funded. I know last year the prior administration also made public education a priority by giving a larger share to the school budget. And I'm wondering this year last year in f y twenty twenty six, it was 31.36%. And this year, it's 31.21%. So I guess I'm wondering why is that? Why are we getting a smaller slice?

Mister mayor, you wanna take that one?

Yeah. Thanks, mister president. Through you, might be a lot of that is the health insurance piece. And it's important to point out the health insurance piece is felt entirely on the city side despite paying the health insurance on the school side. We heard that was a big a big piece of that. I'm competitive and I'm I'll be eager to see where we stack up to every other municipality in Massachusetts in terms of percentage increase to the school budget this year.

On that point, Evergreen?

Thank you. I'm really glad to hear the mayor's competitive because while we have made great improvements in the last several years in Florida school budget, as far as a percentage of our school budget goes to schools, we actually trail most of our most of our competitors who in neighboring communities average closer to 40% to our insured 30%. So I'm actually also curious to know, in the spirit of com in the spirit of that competition, where does Citi think we should be as percent percentage of our city budget going to schools?

Mister mayor, that that sound like a question to you?

Mister president, I don't wanna say it's a rhetorical question. I I am curious to hear if people have thoughts on that. I'm all ears. I don't have a number in my head, but I am willing to to talk to people about that. I do think it's important that we compare apples to apples always and don't compare ourselves to say towns like Winchester that we're talking cities with a similar profile to us.

Amber Levin, tail of the floor. All set? Alright. Let's see. I see councilor Scott, member of Patone. Councilor Scott, go ahead. Member you,

president Davis. Thank you. Super helpful. I don't know if this is a question to this team, to the mayor. You know, I know hate these terms, but like belt tightening, strategizing, thinking hard about plans, about pausing or rescheduling investments that we're planning on doing. I think we all know that if we pause or reschedule investments in schools, kids are hurt. Right? So if we say, for example, just because of the examples that the district brought up, there's a program that we'd like to launch with our female students that are really challenged right now called working on womanhood. One of the proposals is not make that investment. Those kids will continually be delayed in their outcomes.

We have interest in continuing to expand the pilots for inclusion programs. So we've invested money to change the model, put a little bit more staff to better serve our special ed students who are currently included in regular ed classrooms. We've had incredible outcomes. We'd like to continue the pace on that. And another example is coaching.

Coaching is an incredibly high leverage investment that the district has trying to build up. Just so everybody knows what coaching means, is that we hire really talented educators that help our teachers and help them get better at what they do. So I just really want to not to say I'm not willing to be part of this process and I'm really empathetic to the change in revenue, but if gonna use a bad example, but if we slow down work on a park, not great. We slow down work with our kids, It's really painful. So I just really wanna make sure that that headset is in this work.

And again, it's not a judgment, it's more I don't mean to speak to the emotional part of, but schools are not delivering and or making widgets. Schools are, you know, forming our future. So I just wanted to throw that out there that I wanna I wanna hope that the city is really being thoughtful about like, hey, we will we are planned next year to do the x y z. Maybe we have to minus a little bit to make sure that we're funding the schools because we don't wanna let our kids continue to get behind. Thank you.

Councilor Scott.

Thank you, mister president. A couple things before I kind of get into some of my points. I really very much appreciate these questions and this discussion here. I'm fully fully in alignment with a lot of what's been voiced already. There was a question about how much of our fixed costs were in salaries, benefits, insurance, etcetera.

You know, slide 34, if I'm just doing the back of the envelope math here, it looks like about 67, 67.5% it says fixed costs drive municipal budgets. So that's I'm not sure if that 67 and a half percent is averaged between city positions and the school positions being 80% or if that's just 67% on the non school general fund positions. So through you, I'd like to ask that question to Director Mastrovoni there. Numbers on the slide, I figured somebody made it.

Sure, sure did. Three, three, Mr. President. So, this is looking at the city's general fund portion but but does not include things like so there's other non salary personal services items that you know I would consider salaries that are not part of this. This is a more scoped down analysis. I'm happy to look at what we spend on employees across the board. But this this is a subset of that.

So the through you mister president, the the scope down, the stuff that was scoped out let's say might be the uniforms budget that's in personal services. A better example for

you Mr. President might be overtime to pay for core city services. Another example might be training for staff. It would not include uniforms because that's not a personal services item.

That's in our ON lines instead? That's right. You. Yep. Okay. Overtime. Oh my goodness. I wasn't planning on talking about overtime Mr. President. So Mr. President, really appreciate this. I appreciate this discussion. I really appreciate the frank examination of what's here. And so in the spirit of a frank exchange You know there's been talk about painful cuts. And page slide 35 talks about how operation costs, the salaries and minis for personnel are fixed and unalterable barrier to changing the base budget.

And all of this talks about how we don't want to actually have to cut positions. And you know, it refers to reexamining the OEM lines, the stuff and things budgets of departments as a as a potential way to cut cover the shortfall here. But I just wanna say that's not practically speaking, true. Right? We've added many many many positions over the years.

In the last ten years of explosion of this city's budget, we have added a great many positions. It is not a deadly sin to revisit those to see if the juice is worth it in a time when we are all feeling the squeeze. I'm old enough to remember when the entire communications department of this city was one person. One. Now just the core core comms department, not talking about immigrant affairs or or three one one, just the core comms department is 12 people, three of whom have titles that include the word director.

Now I am not targeting the comms department here. Alright? Being a good government means you're doing good things, and then you're telling people that you've done them. That's important too. But as we are in lean times, I think we need to have our focus squarely on doing good things. We must deliver for our neighbors, our constituents, lest they get the correct idea that government at the local level is just as ineffective or broken as the federal government has been lately. We have to do better. The audience tonight here is sparse. So perhaps I'll be forgiven for speaking frankly in the language of politics. If our neighbors thought that existing trends and our level services were satisfactory, our previous mayor would not have been eliminated in the primary.

Things are a little bit busted. I think we need to focus on fixing them here, not just holding the line on the system that we have, on the government that we have. The government we have is shaped over the choices of the last four sixteen years before that. Trimming 5% out of the non personnel, OM, stuffing things, budgets, departments, it's already the smallest category of our spending. It's not going to cut it.

I think we need to not only cover this four and a half million dollar gap that's been mentioned to be mitigated, but we need to do it while stepping up to provide better services to our residents. And I think in order to do that, some city positions will need to be eliminated in these potential reorganizations. I implore our mayor and our staff to be willing to look at that. Right? We are talking about reorganization.

We're talking about evaluating open positions that right now are just providing lag money which is free cash, which is an asset, a short term resource that we can use to cover some gaps. But if we're reorging, we really need to reassess the dozens of positions that have been created over the last four years that had titles like manager, supervisor, and director. I think we really need to focus on service delivery including in our schools, which is kind of the epitome of as someone said, paying people to fix problems and to take care of each other. Our schools are just the epitome of that. They're the definition of that.

I think we need to focus on that kind of service delivery and direct services and maintenance of our existing sidewalks, streets, neighborhoods rather than on management capacity or consulting services or contracted services that, as one of my colleagues called out, cost us up to four times what internal service delivery, internal frontline positions would cost the city. So I know this is all part of the discussion in some of the rooms. I just want to emphasize that our constituents have already told us that things are hard. Sorry. Know, the other day I went to the bodega down in Union Square, bought a two liter diet coke.

It cost me $4. I quit cigarettes before they got $7 a pack. I'm not sure I'm ready to quit caffeine. I just I think we're all our neighbors are making these hard choices. I think it's time for us to make some of these hard choices as well, and some of that's about reevaluating just how we do things as a city and where we redevote our resources to that direct service delivery. Thank you for your forbearance, mister president.

Mister mayor, you wanna weigh in on that?

President Davis, happy to report to the the good council from Ward 2. That's one of the parts of the restructure we're doing is looking at those positions. Obviously, you want to start with vacant positions because then you're not putting someone out of a job. But that is what we are doing. That's what the CAO is working on with the budget team is making sure that we have a leaner, meaner setup on the city side.

Okay. So I've got for the second time around councilor Strezzo, councilor Baton, and then we'll come back to councilor Greenforth. Councilor Wheeler in before the bell with the first comment. Councilor Wheeler, go ahead.

Thank you both chairs.

I just want to start by echoing what my colleague from Ward 2 said and appreciate it's a very difficult thing to talk about any kind of need for cuts. There is a reality that many cities, many municipalities, many towns have experienced that it's easier to add a position than to remove a position. And you know, the the work that people are doing in our city government is vital, it's wonderful, and it's crucial. And, when conditions change and three positions turns out could be being done by two people even if that would be less comfortable. It's very hard for any organization, government or or business to adjust to that.

We are in a situation where the the flexibility we might have in other years to say, those those tough questions are are questions for another time. We may need to ask some more of those tough questions this year. I just you know, I want to applaud any efforts to do that in a way that that takes seriously our most fundamental commitments to our young people and to the vulnerable in our community. And that that understands that if we are able to find some small reasonable amount of cuts, that is something that I I think can help our sustainability in the long term as difficult it is as it is now. So I want to make sure it's something that we're not afraid to to talk about as important as it is.

Thank you.

Mr. Aldrich.

Thank you. Through the chair, along those same lines, your mention of wanting to support our students, but then also our historically marginalized communities is of wild importance. Importance when we're looking at a time that our formative assessments that we choose to progress monitor, so many of our kids are struggling. Just to bring some real data to that, in the reading realm about fifty percent of our kids are a year or more behind, some two or three. And then when you're looking at math, it's about fifty nine percent of our students are behind.

We've seen pockets of immense growth and in areas that were mentioned earlier along the lines of co teaching models and push in math services. These were all mentioned in some of the school improvement plans. I'm just saying this because I do not think this is the time to take our foot off the gas when it comes to improving outcomes for our students. The foundation of being a critical thinker is being able to read, write, and do math. And if we can't provide that to our students, then we are completely missing the mark, I think, of what the heart of Summerville is and how important it is to make sure our students are thriving.

Along those lines, just to reemphasize the point, some of our youngest learners are also struggling with literacy and we have some really great curriculum and some great things in the works. But stepping away from that now and not reinforcing coaching and reinforcing co teaching models and reinforcing interventionists which we're hearing why they're widely needed would be a real big misstep and I think really could turn this whole ship around and we could be in a more challenging spot than we were, than we currently are. And as mentioned earlier, kids don't have time to make up that. Once these gaps grow, they are become so hard to decrease again. And the change in outcomes really affects these children and especially in the historically marginalized communities, these numbers are significantly worse.

So just along those lines, I wanted to emphasize.

Okay. Councilor Trezza, second crack.

Thank you. Well, I was going to ask about the exciting world of exercise tasks, but I do want to use this moment too to echo what school committee matter where Patone said, I know, mentioned as we talk and go back to one of the dire possibility of the public school system eliminating some much needed services from some of our most vulnerable students, including menstrual products and menstrual equity and how concerning it would be if there was that additional amount taken off of the budget because as it was mentioned in schools where there's a need for washing machines because if you're young and you can't afford menstrual products and you just don't go to school for a couple of days because you're embarrassed and you're young and you're working trying to figure out how your body works and that's unacceptable. So to eliminate menstrual products of course in this time would be absolutely an equity issue. And, while we're on the topic of equity issue, yeah, we should not be in any way eliminating services that are helping girls thrive in this environment. In addition to that, I'm hearing a staggering report from special ed parents in the district to save costs.

A concerning trend of students on IEPs being tossed off their IEPs or manufactured to be tossed off their IEPs onto five zero four's. IEPs are federally mandated and must be invested in where five zero four's, there is no liability for them to be to for their needs and there's clear disabilities to be addressed. And, we've heard about that for a couple years now. So, as we go into this steep decline, I worry about that happening as well in the special ed department. Our kids are worth investing in in every way possible, and we don't want to lose that. So, let's find out what that looks like in the budget this year and where our values actually lie. Thank you.

Okay. Member Baton, and then we'll come back to member Leppens.

Thank you, mister president. Through you. I wanna commend councilor Scott for raising a frank conversation, right, and reinforcing this idea that we're gonna need to think creatively, and we're not only gonna need to think creatively. We're going to have to make difficult decisions. Right?

We're going to need to commit to looking at how we're doing things in this different economic landscape. This isn't I mean, we're seeing the trends. This isn't a one year blip. We're now in a multi year trend situation. And, I think one thing we need to evaluate is how are we delivering services in our city in light of the different economic climate that we're seeing.

I also think we need to look at how we've been growing our school budget. And, I think under doctor Carmona's leadership, under doctor Baretta's leadership, we are doing just that. And we're looking in very very detailed ways at how we can deliver services and and to provide better outcomes using the same dollars. So, I'm a 100% in alignment there with what councilor Scott was saying. One thing that was left me hungry for more information in the presentation, presentation.

And I will stay tuned as we get deeper into this budget season. Is where in our budget I saw the 30% going to schools, and again, I'm grateful to the mayor for allocating what is, I think we all agree, our number one priority in the city is our schools. Outside of Outside of that, that, I I had had a a very very hard hard time time seeing seeing discrete discrete numbers numbers in in what are we investing in in terms of delivering core services. Because I have to say, you know, I'm very sensitive to not wanting to demand more for something in our schools, something needs that I see that we absolutely have when it may be balanced against some cut that may be equally impacting our residents' lives. Right?

But without knowing what is on the other side of that ledger, it's really hard for me to make that determination. So, I'm always gonna lean more on our school budget because I I can see line by line where our money is going. And, I feel very confident in those investments. So, that that's just through you, mister president. One thing I will be looking for more from the city finance team to to provide us so that we can help make this these decisions in concert. Thank you.

Mister May, you wanna respond to that?

Yeah. Thanks, mister Prison. This is one of those things that results from the different timelines that the schools are on versus on the city side. Right? The school's budget happens, you know, it needs to it goes through a process. They you all are on the school side are farther along than the city is. And that's why there are more fully fleshed out numbers for SPS than there are on the city side. They are working on that. I think we are close to having some harder numbers on the city side. But I hear you. I noticed the same thing in there.

Member Green, I'm gonna go to member Lippertz because she's got her second crack, and then we'll come back to asking. Councillor Sate has not spoken yet, so councillor Sate.

Through you mister mister president. Thank you, director Bean, for

the

presentation. And many of my colleagues have mentioned this already. I wanna thank counselor Scott for starting this conversation. Again, as many have said, this is not this is not easy. It is going to be painful.

To me, like, we should do everything to not make everything we can so we don't make any cuts in the school budget. As a former educator, I know that if we make cuts now to very important services, it's something we're gonna be dealing with in the next few years very, very soon. And so instead, I'm glad I'm hearing from mayor Wilson that we wanna look at how we can consolidate departments and, you know, the whole, like, how many managers and directors, you know, we have and yeah. Think think creatively. Again, this I I don't wanna mention any department right now, but this is where my focus is going to be.

Looking at city departments, looking at positions, and, yeah, working with you and your administration, mayor Wilson, to figure out how we can work creatively there to find this money, and the the other one is contracting out work. We know I mean, year after year, this council keeps bringing this up. We I think this year, I wanna see numbers, director Bean, of, like, how much is this cost in the city? With this DPW, whether it's other departments, hiring consultants. I think this is the time to really, like, just think about ways to avoid that and what we can do in house and what we can just maybe stop doing.

Again, it's really hard to, like, have a conversation right now without these numbers, and this is just the beginning of budget season. So I'm looking forward to seeing that.

Okay. Now back to member Lipans.

Thank you through you, mister president. I just wanted to come back to the smaller slice of the pie, which thank you, Bobby, for helping me run the numbers. But even, like, that small percentage that we're talking about is more than half $1,000,000. It's about $580,000 which when you're asked to cut even, you know, dollars 250,000 from a school budget. That's things like cuts from the CTE, cuts from curriculum expansion and intervention, cuts from supplies and food budgets.

So, these numbers have meaning even these tiny, tiny, you know, things have have impacts. So again, I guess it's my question as to why?

Thank you.

Mr. Brady, you wanna take that one? Sure.

As I understand the the the three mister president, the question from from member Lipans is why would we ask for contingency cuts?

Why are we from last year to this year, why is the percentage of what we are getting less? So last year it was I have the numbers. Sorry.

Mister president, understand the question. To my earlier answer, I think the primary driver has to be the health insurance premiums which are felt on the city side, so that improves that drives up the city side. Not reflected on the school side, but again a reminder. Are there more are there more employees on the SPS side than on the the city side? It's gotta be ballpark close. That's a cost the city is bearing. That's gonna drive that up. That will not be reflected on the school side.

I appreciate that. It's just cuts are cuts are hard. I know. I feel it more being in schools every day. So I I do know that we as a body all want our schools to thrive. So money makes a difference. Yeah.

Okay. Second crack. Councilor Klinger.

Mister president, through you, I'm going on a limb here a little bit because we don't have anything in front of us that we're speaking on, but I am normally I'm not gonna speak specifically about the school budget as there is not nothing in front of us as I am usually recused from that discussion. But I will say that, and I hear everybody loud and clear on the potential hard decisions that we have to make, and you know, just wanna say that I think that we should at least let the mayor hear that we're gonna back him up if it comes to say this mobility project or like whatever heat he's gonna take for for a square in this. You know, I think we all need to be in this together. So, we're gonna make our decisions and have to have to parse out and decide what in terms of priorities, certainly we can all agree that the children are our top priority in the schools, but I think, you know, it's it can be very difficult to be in that seat and be that decision maker. So I just wanna say that, you know, I'm prepared to support the mayor in whatever decisions he has to make.

Thank you.

Councilor McLaughlin.

Thank you, mister president. On a similar note, I'm prepared to support the mayor, but that's because it's all gonna follow on on him to solve this budget problem. Because I do know if it gets to the city council level and we're the ones who are expected to make the cuts to balance the budget. That's not gonna be fun. It's not gonna get us to the money that we actually need to save. It'll probably be political and not efficient. So, I'm just saying that now because already feel we're heading down an interesting road where we're gonna be making value judgments based on the budget when we do have to make practical judgments. And if it gets to the council to make this decision, it's just not gonna be fun for anybody.

Okay. On that point?

On that point. Mister Reza, I know it's very tempting for people to look at this as SPS versus the city. And, I I personally reject that framing. There's so much that the schools do that, you know, from, you know, on food insecurity and in so many areas, right? Social services. So much is coming through the schools. And on the city side, so many things that the city is doing also directly impact SPS families. And I think it's important that people we don't want to pit SPS against the city. Nothing good will come from that process.

Third crack. Nope. Just first crack. Councillor Hart.

Thank you, Mr. President. I actually have a question on a totally different subject. So, if other people want to continue on the same subject, that's fine.

If it's on the matter before us, go right ahead. You have a floor.

Okay. Well, just looking at the revenue side, I was just wondering, given that the vacancy of the Life Sciences buildings is such a big part of the cause for declining growth, I'd love to hear more about just possibilities for turning that around and what's just the efforts in that regard?

Who wants to take that one? I'm looking at you mister mayor or

I'll take it. Alright. Thank you. Through you. Yeah. That's that's a huge thing. Right? We just you heard tonight and people know from previous statements that the TransMedics deal would would solve about 25% of the problem for us. Right? We get 60 ish cents on the dollar for a vacant life science building.

So, it's a huge priority to try to fill that remaining 75%. I don't wanna blow up anyone's spot here, but we are talking to people about doing exactly that. I've encouraged economic to think about our strategy of how we're going out and basically selling the city to potential to potential companies interested in relocating here or opening up a site here. It's a big market in Europe. Yeah, it's bleak times right now in terms of the biotech sector, but that's not to say that that there you know, there are still companies that are growing, there are still companies moving and we're aggressively looking to market Somerville as the place they wanna be.

And you know it's early days in terms of that strategy, but I think we're seeing some encouraging results and hopefully we're back before the council with good news here in the not so distant future.

I have a follow-up that, you know, as a constituent, I've I have wondered. My understanding is that, you know, these buildings are built to scientific specifications. But, you know, are are there other opportunities that aren't for biotech that could also go in these buildings? And if so, is that being explored as well?

Mister president, through you. Yeah, it's definitely something you look at. The problem is like your typical life science building has a lot of they don't need to have windows on the interior so much. Turns out, you know if you're talking about residential or other applications, they don't make good retrofits into into other uses just because of the design of the building. There's a lot of air handling, know, if it's designed for like you know wet chemistry in a lab. They don't make the best in terms of flipping to another use. It's it's the sad reality. I know I I had the same question as well. It's where we're at. So we're really focused on trying to tenant those buildings.

Okay. We'll go a quick third crack to member Green and then member Strazo. I'll note that we do have a rule for the city council that members can only speak twice an issue. Member Councilor Strazo moves to waive that rule for this evening. I would encourage folks to wrap the conversation up. We've talked a lot about this. Is your second crack? Okay. We're gonna go second crack with councilor Scott. And then we're gonna go for our third cracks.

Thank you, mister president. President. I maybe maybe I talked a lot. Maybe that was a two for one. No. I just wanna thank everyone here for engaging in this tonight. I don't wanna keep us here much longer. I I think this has been a helpful discussion, hopefully. As far as the mayor goes and supporting him and hard decisions that are gonna have to be made, I agree. You know, as Truman once said, buck stops there.

But now I do reserve the right to be salty on behalf of my constituents when the budget comes out, but I also open to this conversation in the spirit of helping the mayor to understand where our priorities lay as his colleagues in a theoretically co equal branch municipal government. So I I just it is undeniable that there are more there are plenty of departments in the city that are making differences in people's lives that are that are directly impacting them. I've got neighbors that are out of federal custody because of the hard work of the Office of Immigrant Affairs. Hard to change a life more than that, really. I I did have a quick question just to make sure I understand because I heard the whole contemplating contemplating these contingency cuts.

Is that contingency cuts across all departments or or just the school department? I just wanna make sure I understood.

May I wanna fill that one?

Yeah. Mister president, I appreciate that question. Obviously, we can't order the school committee to make cuts. On the city side, what we've done is we've asked each department. You're gonna get a full briefing on this when we release the budget and show you the the new organizational structure of the city, but we're going to a cabinet level architecture where you have nine departments made up of divisions. We're asking at the department level. So, don't care. We don't have we need each division to do a 3% and a 5% of OM, ordinary maintenance. We're asking across the department because all divisions aren't created equal. You might have a small division where a percentage cut is is you know brutal to them.

So we're asking the department level, they come up with this, they work on this, then they present these options to us. There might be things that we might not we might not be in a position where we need cuts, but we like these ideas and see we see an opportunity to save money. We're gonna go for it. Right? If we determine it's a more painful cut, then we're gonna be, you know, that will be saved for a contingency.

On the school side, what we did ask for very specifically were sort of four levels. Know, member Lippins referred to it as from, you know, in my words, least terrible to to most terrible of of looking at if we had to cut, what would we cut? And I wanna thank the SPS administration for for putting those together. And yeah, as advertised they started at least terrible and went to most terrible. We're really hoping to avoid that scenario. But it's an important exercise. What do they say? Hope for the best, plan for the worst. And that's what we're doing right here. We want make sure no one's caught by surprise if those numbers don't come in where we want them to be. We wanna make sure that we're prepared for for any scenario here.

I appreciate that. Thank you, president. Thank you, mister mayor. I really appreciate that. Like I said earlier, don't think that three to 5% in the OM budgets are necessarily how we're gonna both cut this gap and step up first, our neighbors where we need to.

And I know lots of folks don't wanna talk about actual departments. I've never been shy about recommending cuts, but I will say I do think it's a little bit bonkers to be contemplating cuts to a school department that does not have a whole lot of fat on it. At the same time that we're considering a pre negotiated contract increase of two to 3% to the police department above and beyond the extra infrastructure cost to implementing some new technology over there. I I just think that's just bonkers to me. And I think we have other as I mentioned, all the other middle management positions have been created, heck, some whole departments that we spend a lot of money on that again, once I just keep coming back to we need to focus on what's delivering services to our neighbors.

So thank you for that. I promise my second bite at the apple is my last, mister president. Member Green.

I apologize for not under knowing the city council rules. It's could maybe tend to for shorter, more common frequent comments rather than fewer longer comments. That said, I'm going to ask us to back up for a second for this is my eleventh budget as a member of government. And for 11 budgets now, I've heard my colleagues in government pontificate very pious to you about their commitment to equity. And so I'm gonna ask if we are equity is very easy when there's plenty of money to go around because you can make decisions that are all additive.

When we have to figure out where scarce resources go, it becomes a lot harder. And I know it's very traditional to say we can make budgets meet by tightening our budget our budget a little everywhere. I'm gonna ask that we not approach take take that approach. I'm gonna ask that we be mindful of a few things. In a city where 9% of according to the census, 9% of us are in poverty, 44% of some of our public school students are are low income.

In a city that is one third people of color, 60% of our students are people of color. In a city where 12% of people represent sorry, where seven percent of people report having disabilities, twenty percent of our students do. And in a city where twelve percent of people report being English learners, twenty five percent of our students are. So if anything we have said about equity for the last eleven years is more than empty rhetoric, the most important thing we can invest in is our schools. And I say this is someone who like many of us around this table has a certain degree of economic comfort.

There are plenty of things this city does that are nice, that are pleasant, that make my life as a middle class resident in Somerville more enjoyable. But they are nice to haves. They are not need to haves. So I'm gonna ask this administration and this council to before they start thinking about how to make, as councilor Scott pointed out, a school budget that has very little fat in it to they do with less. I hope that we can do a budget to ask those of us who have more to do less with less.

Counselor Streisand.

Thank you. Round three. This is why those menstrual products are so darn important in the nurse's office. Equity, it's really important. And on that, and last point, this question, mister president, through you to director Baretta of the Summerville Public Schools, I had a question for you.

If you recall in last month, I put forward a resolution thank you so much. I put forward a resolution requesting because thinking about this budget, that hole that we're about to go into and full disclosure with with us on the council when it comes when the school budget

Counselor Strozco, anything that goes to the schools can go through me. Mister president,

is not accurate, I believe.

You could direct your correct question through the chair.

Yeah. Okay. Mister president, you to the chair. So, as we know, we are when it gets to the city council level, it's an up or down vote. We we have full trust in the school committee to do their job and look through the budget. But the past couple years actually as far as I've been a counselor, the school budget has a pretty much been like a nine page PowerPoint presentation and doesn't

really

go into descriptions. And the resolution I brought forward requested that we see this year, especially with your wonderful contribution to our city, welcome, and you know you've been in your position for a while now. And so the time is now to have an itemized budget presented to the school committee and the city council that has the salary line items of every department, expenditures identical to what we receive at the city in these numerous pages. And I know that there were were thoughts that maybe hopes that this could be possible. And I'm asking you tonight, can we anticipate this this year?

Councilor Stresso, that has been noted. Thank you. Doctor. Brown does not have to you have requested to the schools. We are hearing it. Thank you for your request.

Mister president?

Council Chazo?

Me noting what school committee member Ackman has stated. May I have that question answered? This this is a

joint meeting. You've posed question. If Mhmm. Member of the city staff would like to

answer the question,

they're entitled to. They're also entitled to not.

Thank you very much. I

I don't wanna step on anybody's toes. But yes, we have committed to doing that. And we've published, you know but we have not published a budget book in many years. And we've you know, at the start of the school year we committed to publishing a budget book with a lot more detail. We've given snippets of that. We published a sort of retroactive budget book from last year. So, yeah, that is very much in our plans. It's just it takes a little bit of time given, you know, the the city's timeline and we we are a budget team of just me. So it takes a little bit of time to put all that stuff together. So once we do have the finalized version of the budget, it will be, you know, presented with various snapshots and, yes, itemized by departments. So you'll be able to see salary lines, FTE comparisons year over year,

and all that stuff.

Mister president, through you to director Moretta, thank you. Thank you. So we can expect this. This is exciting. Thank you very much.

When we when we have that presentation to us, we invite you as well as all the city councilors to come to that presentation.

Councillor Clinton, final word? Yeah.

Thank you Mr. President. Through you, I was on that same subject. When something gets framed, like I I would certainly not be posing pitting the, you know, the city versus the school department anyway. I was I was more, again, speaking to all of our support, including to what Councillor McLaughlin said as well as school committee person Greene, is that I think we're really who we're talking to here is the public, that they understand if we are true in our strive for equity, if we are you know truly investing in our children then when decisions have to be made, because we already know how this plays out as counselors.

He makes a cut, we get inundated with emails, Now we're coming for him, it's just I would like to have this, you know, people to kind of be on working together on the same page going into this so that you know we're not going down in the depths of political hell as budget season. So hopefully we can all and like it's been noted, best case scenario, you know, maybe things aren't nearly as as bad as they might seem at the moment and and we get a fully funded school budget. Thank you.

Alright. Seeing no further questions, thank you everyone. Thank you very much gentlemen for all the information, answering all the questions. Appreciate it. And all the work that goes behind it. And everyone else is putting in a ton of work behind it as well. So, our gratitude. I speak for the council. Councillor Euncanpin moves to adjourn. We're gonna place this item on file. We'll need a roll call vote for adjournment and to place it on file, we can take together. Madam Clerk?

For adjournment, councilor Euncanpin? Yes. Councilor Link?

Yes.

Councilor Scott?

Yes.

Councilor Klingen?

Yes.

Councilor Strazo? Yes. Councilor Saeed? Yes. Councilor

Wheeler?

Yes. Councilor Hart? Yes. Councilor McLaughlin?

Yes.

Councilor Mbaugh? Councilor Davis?

Yes.

We are adjourned.

Okay, everyone.