F Y 1 6 Somerville Budget Overview Mayor Joseph A. Curtatone June 4, 2015
Serving Our Community as we Grow Our Future
Serving Somerville Together Investing in our Schools and Youth Development Strengthening Core Services to Enhance Our Quality of Life Taking on Our Greatest Challenges
A Budget Guided by Our Core Principles and the Community’s Orienting Values Somerville: A Great Place to: Live Work Play Raise a Family
FY2016 Appropriations • Proposed Operating Budget = $211 Million • General Fund Appropriation = $195.9 Million • General Fund Expense = 3.7% increase over FY2015
Historical Spending Increases Have Been Modest Year-to-Year Proposed Budget Changes 5.4% 6.0% 5.1% 5.0% 3.7% 3.9% 4.0% 3.0% 1.2% 2.0% 1.0% 0.0% -1.0% -2.0% -3.0% -2.8% -4.0% FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16
Operating Budget State FY2016 Proposed Budget General Assessments Government Overlay 6% 8% Reserve 1% Public Safety School 18% Department 30% Culture & Recreation Public Works 1% 12% Pension & Other Fringe 1% 18% Debt Service 5%
$7M Increase Over FY15 $2.5 Millions Net Change from FY15 to FY16 $2.0 $1.5 $1.0 $0.5 $0.0 ($0.5) ($1.0)
Values-Driven New Investments & Increasing Fixed Costs $2.5 Millions Net Change from FY15 to FY16 $2.0 $1.5 $1.0 $0.5 $0.0 ($0.5) ($1.0)
FY16 Significant Requests 2.5 Millions 2.0 1.5 1.0 0.5 0.0
Investing in our schools 2.5 Continued investment Millions in our schools: 3.6% 2.0 increase in funding 1.5 over FY15 . 1.0 0.5 0.0
Planning Ahead Health Insurance costs are 2.5 rising, but PEC agreement Millions anticipated this with 2.0 decrease to the City’s 1.5 contribution, mitigating 1.0 the increase. 0.5 0.0
Planning Ahead 2.5 Without PEC Millions agreement, increase 2.0 would be ~$570k 1.5 higher. 1.0 0.5 0.0
Sound Fiscal Management 2.5 Millions Keeping our commitment 2.0 to fully fund our pension 1.5 by 2034. 1.0 0.5 0.0
Personal Services: Fixed & New Costs Increases to Personal Services from FY15 to FY16 $4,000,000 $3,683,875 UNION CONTRACTUAL OBLIGATIONS (including $3,500,000 OT) NON-UNION SALARY $3,000,000 INCREASES $2,500,000 NON-UNION HOLIDAY PAY $2,000,000 NEW POSITIONS $1,500,000 $1,000,000 $4.3M increase $322,429 $261,182 $500,000 in Personal $46,216 Services from $0 FY15
Building on Our FY15 Investments
Our Big Picture Investments Are Paying Off Student MCAS SGP Scores are Up Revenue Assembly from New Row is Thriving & Growth is Union Up Square is Underway
Our Core Service Investments Are Paying Off Food Range of Inspections Recreation Are Up Programming is Up Court Proceedings Against Problem School Properties are Up Enrollment is Up Rodent Sightings are Down
Together, We Improved Services Online Online Playing Building Field Permits Permits Now Offered Introduced LED Street Somerville by SomerViva Light Project Design Public Outreach Will Save Planning and Services Energy and Processes to Immigrant Costs Increased Community Dramatically Doubled
Increasing MCAS SGP with the help of significant school investments • Somerville Public Schools led all urban school districts in Student Growth Percentile (SGP) for 2 nd straight year • Only urban district among top 10% for SGP in the Commonwealth
Neighborhood Impact Team Efforts Growing NIT Cases by Type 3 (6%) 5 (11%) 17 (37%) 10 (22%) Addressing 11 (24%) Problem Properties with Illegal Apartment / Overcrowding Structural Issues the help of a new Failure to Maintain Paralegal Operating w/o license or permit Improper usage
Driving Rodent Calls Down 40% New initiatives include uniform trash carts and increased dumpster inspections and enforcement.
Better Service with New Online Recreation Permitting Online Permitting and Field Scheduling has improved transparency and customer service in the Recreation Department.
Then it s nowed… but we were prepared
Snow Budget vs. Actual Snow Costs A+ AA+ S&P • Budgeted • Spent • Deficit $977k $9.9M $8.9M DPW Snow Removal Account $9,947,825 FY2015 Snow Removal Budget - $977,652 Current Deficit $8,970,173
Estimated Snow Removal Costs Department of Public Personal Service, $9,947,825 Works Contractors, and Police Details Fire Department Overtime $108,755 Police Department Overtime $76,720 Traffic and Parking Overtime $34,684 Constituent Services Overtime and Extra $4,262 Hours Total Operating Costs $10,172,246 Capital Costs Heavy Equipment $809,425 Total $10,981,671 • Fire Department overtime costs can be covered by a free cash appropriation (submitted to the BOA) • Police, Traffic and Parking, and Constituent Services overtime costs can be covered from within those departments’ budgets • Equipment was bonded and the cost will be spread out
Plan to Pay Down Snow Costs Current Deficit $8,970,173 Transfers from Other Departments - $629,307 FY15 Appropriation of Free Cash FY15 - $3,000,000 Appropriation from Rainy Snowy Day - $2,000,000 Stabilization Fund FY15 Estimated FEMA Reimbursement - $1,700,529 Deficit Balance $1,640,337 Photo by Todd Van Hoosear
Plan to Pay Down Snow Costs • The Commonwealth will allow cities and towns to amortize snow costs over fiscal years 2016, 2017, and 2018 • Currently, that would be $546,779 each year • The City has an upcoming meeting with FEMA
Parking Permit Increases • Visitor’s Permits • Currently $10, Proposed $20 Residential • $418,630 in increased annual revenue parking • Resident Permits permits are • Currently $30, Proposed $40 always free • $349,140 in increased annual revenue for Seniors • Affordable parking and • Still only $3.33 monthly for residential parking. handicapped • High parking demand residents. • More than 11,600 registered vehicles per square mile.
Building Permit changes • Two-tier system • From $19 to $20 under $100,000 valuation • From $20 to $21 over $100,000 valuation • $165,000 estimated revenue increase
Together, we’ve kept our finances strong and sound Our highest bond rating ever A growing commercial tax base Growing stabilization funds
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”
Moody’s Assigns Positive Outlook June 2015 “Strong & growing economy” “Healthy reserve levels”
Highest ever stabilization funds Growth in Stabilization Funds
Increasing free cash Budget Surplus – Free Cash
Budget Surplus Projections from Long-Range Plan 14 Millions 12.4M 12 Surplus Projection 10 8 6.0M 6 5.2M 4.1M 3.8M 3.4M 4 2.5M 2 465k 151k 0 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25
We have achieved the most new growth in a decade Annual New Growth FY03-15
Annual New Growth is Projected to Increase 14 Projected FY17-25 Millions 12.9m 12 11.5m 10 9.7m 8 6 5.8m $4.01m 4 $3.17m 2.9m 2 Projected 0
Businesses are choosing Somerville 156 net new small businesses in 4.1 square miles since 2010 As of June 2015
60 Millions $57M 50 40 30 $31M 44% drop in state aid 20 between 10 FY2002 & FY2014 0 2002 2004 2006 2008 2010 2012 2014
= Taxpayers Pick State Aid up the Burden Cuts Percent of Budget Covered by Tax Revenue 70% 60% 50% 40% 66% 30% 43% 20% 10% 0% 2002 2015
We will be going to the tax levy 2.5% overall increase in FY16 tax levy over FY15 But we will not seek to override it
Since 1985, 300 Mass. Communities have requested 4,225 overrides Somerville = 0
One of the Lowest Spending per Capita in State (General Fund FY15) Somerville: $2,577 Boston: $4,180 Cambridge: $4,888 Based on 2103 American Communities Survey population data and published 2015 city budgets.
Together, we’re working to shift the tax burden Projected Residential/Commercial Tax Share Percentage 80 70 73.59 73.39 72.74 70.15 68.57 60 63.27 50 40 30 36.73 Commercial 31.43 29.85 27.26 20 26.41 26.61 Residential 10 0
Residential Exemption is now the highest in State at 35% 2015 35% ResX Savings of $208 per month $2,498
FY2016 Revenue by Source Fees Misc Recurring Other Revenue <1% Licenses & 1% Sources Permits 3% 4% Fines & Forfeits 3% State Aid 23% Taxes 66% Penalties & Interest on Taxes <1%
PILOT Payments Increasing PILOT Payments to the City 900 Thousands 800 820k PILOT Payments to 700 the city increasing 600 by 192% in 500 FY16 400 300 280k 286k 200 192k 182k 100 0 FY12 Actual FY13 Actual FY14 Actual FY15 Budgeted FY16 Projected
$539,000 in PILOT funds from Partners included in this budget
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