F Y 1 5 Somerville Budget Overview Mayor Joseph A. Curtatone June, 2014
Investing in Somerville
Investing Today with an Eye on Tomorrow Investing in our Schools and Neighborhoods Making the City Safer Through Strategic Enhancements Improving Inspections and Review By Adding Resources at ISD
A Budget Guided by Our Core Principles and the Community’s Orienting Values Somerville: A Great Place to: Live Work Play Raise a Family
FY2015 Appropriations • Proposed Operating Budget = $203.1 Million • General Fund Appropriation = $188.0 Million • Municipal Appropriation = 3.8% increase over FY2014
General Fund Expenditures State FY15 Expenditures General Assessments Government 7% 8% Overlay Reserve 1% Public Safety School 19% Department 30% Culture and Recreation 1% Pension and Other Public Works Fringe 1% 11% 17% Debt Service 5%
Appropriations Overview $4.00 Millions $3.50 $3.00 $2.50 $2.00 $1.50 $1.00 $0.50 $-
Values Driven Budget $4.00 Millions Continued investment in $3.50 our schools: 6.6% increase $3.00 in funding over FY14 . $2.50 $2.00 $1.50 $1.00 $0.50 $-
Sound Fiscal Management Keeping our commitment $4.00 Millions $3.50 to fully fund our Pension $3.00 by 2035. $2.50 $2.00 $1.50 $1.00 $0.50 $-
Significant Requests $4.00 Millions $3.50 $3.00 $2.50 $2.00 $1.50 $1.00 $0.50 $-
GIC was the prudent choice Average Health Insurance Premium Increase from Previous Year 18% 15.50% 16% 14% 12% 10% 8.70% 8.50% 8% 6% 3.50% 4% 1.43% 1% 2% 0% FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 Self-Insured GIC
Our highest bond rating ever A growing commercial tax base Continually Improving City Services SMART CHOICES ARE PAYING DIVIDENDS
Highest Bond Rating Ever A+ AA+ S&P 2004 2014 A2 Aa2 Moody’s 2004 2014 Ratings guarantee savings for Somerville
Highest Bond Rating Ever “Strong and growing economy” “Budgetary performance has been strong” “Good financial practices”
Other Budget Accolades Certificate of Achievement for Excellence in Financial Reporting for FY13 CAFR GFOA Distinguished Budget Presentation Award for FY14 Budget
Our Past Investments are Paying Off… Projecting $4M in new growth property tax revenue $101 m projected in ($2.4m from captured Assembly Row)* increment tax dollars over 30 + years from the DIF blocks 1,3, and 4 $1M in new ($60 m net after building permit debt service) revenue from blocks 5 & 6 Assembly Row *DIF taxes; $1.4m net after debt service
Most New Growth in a Decade Annual New Growth – FY2003 through FY2014 4,000,000 $3.45M 3,500,000 $3.17M 3,000,000 2,500,000 2,000,000 1,500,000 $1.65M $1.31M 1,000,000 500,000 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
This growth allows us to continue to invest without raising fees and fines. The only significant fee change will be to increase the Building Permit fee. $20 $19 per $1,000 per $1,000 construction construction cost costs over $100K
We’re holding taxes low FY14 tax with exemption on $400k home Residential exemption No residential exemption $6,852 $7,000 $6,220 $6,000 $5,193 $4,801 $5,000 $4,000 $3,156 $3,000 $2,561 $2,000 $1,545 $1,000 $0 The Somerville fiscal year 2014 residential exemption is $1,907.53.
Tax on $400k Property w/ Residential Exemption $8,000 Lynn $7,000 $6,000 $5,000 Medford $4,000 $3,000 $2,000 Somerville $1,000 $0 FY12 FY13 FY14
Hearing TODAY on raising Residential Exemption from 30% to 35% Average Tax Bill for Two-Family Property in Somerville 30% ResX 35% ResX Savings of $155 $4,794 $4,639 annually
One of the largest Declines in Property Taxes Percent change in tax on $400k property with residential exemption, FY13-FY14 6.0% 5.2% 4.0% 2.9% 1.9% 1.5% 2.0% 1.3% 1.3% 1.2% -0.1% 0.2% -0.9% -0.9% 0.0% -2.0% -4.0% -4.5% -6.0% -5.3% Residential exemption No residential exemption -8.0% -7.5% -10.0% -9.3% -9.6% -12.0%
We’re holding taxes low: Commercial Rate FY14 commercial tax rate $45 $40.95 $40 $34.81 $36.04 $35 $31.18 $31.55 $30 $27.96 $25.58 $25.62 $24.01 $25 $20.44 $21.51 $18.50 $18.51 $20 $13.50 $13.79 $15 $11.91 $10 $5 $0
54% drop in state aid $90,000,000 $76m between $80,000,000 FY2000 & FY2013* $70,000,000 $60,000,000 $50,000,000 $40,000,000 $30,000,000 $34m $20,000,000 $10,000,000 $0 *adjusting for inflation
= Taxpayers Pick $41.6 M up the Burden in State Aid cut since 2000* Percent of Budget Covered by Tax Revenue 70% 60% 50% 40% 64% 30% 43% 20% 10% 0% 2002 2014 *adjusting for inflation
Some of the Lowest Spending Per Capita FY13 general fund spending per capita $4,000 $3,795 $3,574 $3,392 $3,500 $3,245 $3,000 $2,726 $2,717 $2,684 $2,663 $2,418 $2,383 $2,500 $2,246 $2,224 $2,000 $1,500 $1,000 $500 $0
Spending per Capita (General Fund FY13) Somerville: $2,383 Boston: $3,574 Cambridge: $3,795 htt // /d /d /dl / d t f/ i i l t l dit / f d 13 l
Since 2000, 220 Mass. Communities have requested 1,423 overrides
Somerville = 0 Belmont = 3 Arlington=2 Newton=3 Brookline= 1
Growing Somerville’s Free Cash Free Cash as of July 1 $12 $10.6M $10 $8 $5.8M Millions $6 $4 $2 $- 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Expanding Our Stabilization Funds Growth in Stabilization Funds $16,000,000 $12.4m $14,000,000 $12,000,000 $10,000,000 $8,000,000 $6,000,000 $4,000,000 $0.2m $2,000,000 $-
Finding Cost Savings Everywhere • Streetlights have saved more than $600k over the past 2 Years • Correcting a glitch in the Ch. 90 formula will mean more money for street repairs • E-payables generated over $70,000 – as well as reduced paper • Lower debt costs from bond rating increases
Innovations in Service, for example… Parkmobile • Enhance current parking meters with pay-by-cell technology. Data Dashboard • Done in-house • Accessed by thousands
Somerville is thriving LIVE because we invest, for the long-haul, in our orienting values PLAY Make Somerville a Great Place to WORK Live, Work, Play and Raise a Family FAMILY
$1,600,000 Local Meals $1,400,000 $1,200,000 Excise Tax $1,000,000 $800,000 Revenue is $600,000 $400,000 $200,000 Up 15% $0 Local Room Excise Tax revenue is Up 4.6% Photo by Chris Devers
Businesses are choosing Somerville 119 net new small businesses in 4.1 square miles since 2010 As of 2014
Our reputation for good management and innovation is growing • “Best Run City in the Commonwealth” – Boston Globe Magazine • All-America City 1972, 2009 • 100 Best Communities for Young People – 2008, 2009, 2010, 2011 • Green Communities Award 2011 • E-Government Award 2007- 2011 • U.S. HHS Let’s Move Award – 2011
Our Quality of Life is Gaining Notice • 9th Most Bikeable City in USA • 7 th Most Walkable City – walkscore.com • Healthiest City in Massachusetts 2010 – MA Health Council • One of 14 best places to live in MA – Boston Magazine • “One of the 27 Coolest Suburbs” – Travel & Leisure • “Best Place to Date a Nerd” – Match.com
Listening to the Public: Community Budgeting We can make smarter investments knowing what the community wants. At 3 Community Budgeting sessions residents shared over 200 ideas about investments they want made in those values. Residents outlined their broad values in SomerVision.
Investing in Somerville Talent Redesigning Compensation • Competitive pay scales that will attract and retain qualified workers Promoting Transparency • New framework for annual evaluations • Tying salary increases to performance
Investing in Somerville Talent New Collective Bargaining Agreements Settled • School Custodians • Crossing Guards
Investing in the Next Generation
Listening to Residents *Residents consistently rank schools as a top priority. Their perception of the schools is highly predictive of their satisfaction with the City. *Source: Happiness Survey
Enrollment Projected to Rise 4,877 students total
A Historic Investment in Our Schools: a 26% increase since FY10 6.6% SPS Budget Increase $70 Millions $60 $50 $40 $30 $20 $10 $- FY10 FY11 FY12 FY13 FY14 FY15
Expanding Early Education • New SPS/Head Start classroom partnership at Healey School • Developing innovative early childhood network with Tufts-STELLAR program • Recruiting new early education director
Investing in Diversity • Additional reading support for Argenziano and Healey schools • New ELL program liaison • Expanding special needs teaching staff
Investing in Safety
Making the City Safer • FIRE – Fire Protection Engineer – new civilian position will allow us to move firefighter back into suppression unit from prevention unit • Police – Senior IT Specialist • K9 unit – last dog was retired due to promotion of his keeper • $50K for additional pavement markings – complete streets/public safety
Investing in Community
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