Mayor's Budget Presentation — File 199371

Somerville Budget Overview Mayor Joseph A. Curtatone June 4, 2015 F Y 1 6

Serving Our Community as we Grow Our Future

Investing in our Schools and Youth Development Strengthening Core Services to Enhance Our Quality of Life Serving Somerville Together Taking on Our Greatest Challenges

A Budget Guided by Our Core Principles and the Community’s Orienting Values Raise a Family Work Live Somerville: A Great Place to: Play

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 5.1% -2.8% 3.9% 1.2% 5.4% 3.7% -4.0% -3.0% -2.0% -1.0% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 Year-to-Year Proposed Budget Changes

Operating Budget General Government 8% Public Safety 18% Culture & Recreation 1% Public Works 12% Pension & Fringe 18% Debt Service 5% Other 1% School Department 30% Overlay Reserve 1% State Assessments 6% FY2016 Proposed Budget

$7M Increase Over FY15 ($1.0) ($0.5) $0.0 $0.5 $1.0 $1.5 $2.0 $2.5 Millions Net Change from FY15 to FY16

Values-Driven New Investments & Increasing Fixed Costs ($1.0) ($0.5) $0.0 $0.5 $1.0 $1.5 $2.0 $2.5 Millions Net Change from FY15 to FY16

FY16 Significant Requests 0.0 0.5 1.0 1.5 2.0 2.5 Millions

Investing in our schools 0.0 0.5 1.0 1.5 2.0 2.5 Millions Continued investment in our schools: 3.6% increase in funding over FY15.

Planning Ahead 0.0 0.5 1.0 1.5 2.0 2.5 Millions Health Insurance costs are rising, but PEC agreement anticipated this with decrease to the City’s contribution, mitigating the increase.

Planning Ahead 0.0 0.5 1.0 1.5 2.0 2.5 Millions Without PEC agreement, increase would be ~$570k higher.

Sound Fiscal Management 0.0 0.5 1.0 1.5 2.0 2.5 Millions Keeping our commitment to fully fund our pension by 2034.

Personal Services: Fixed & New Costs $3,683,875 $261,182 $46,216 $322,429 $0 $500,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000 $3,000,000 $3,500,000 $4,000,000 Increases to Personal Services from FY15 to FY16 UNION CONTRACTUAL OBLIGATIONS (including OT) NON-UNION SALARY INCREASES NON-UNION HOLIDAY PAY NEW POSITIONS $4.3M increase in Personal Services from FY15

Building on Our FY15 Investments

Our Big Picture Investments Are Paying Off Assembly Row is Thriving & Union Square is Underway Student MCAS SGP Scores are Up Revenue from New Growth is Up

Our Core Service Investments Are Paying Off Range of Recreation Programming is Up Court Proceedings Against Problem Properties are Up Food Inspections Are Up Rodent Sightings are Down School Enrollment is Up

Together, We Improved Services Online Playing Field Permits Now Offered Somerville by Design Public Planning Processes Increased Dramatically Online Building Permits Introduced SomerViva Outreach and Services to Immigrant Community Doubled LED Street Light Project Will Save Energy and Costs

Increasing MCAS SGP with the help of significant school investments • Somerville Public Schools led all urban school districts in Student Growth Percentile (SGP) for 2nd straight year • Only urban district among top 10% for SGP in the Commonwealth

Neighborhood Impact Team Efforts Growing 17 (37%) 11 (24%) 10 (22%) 5 (11%) 3 (6%) NIT Cases by Type Illegal Apartment / Overcrowding Structural Issues Failure to Maintain Operating w/o license or permit Improper usage Addressing Problem Properties with the help of a new Paralegal

Driving Rodent Calls Down 40% New initiatives include uniform trash carts and increased dumpster inspections and enforcement.

Online Permitting and Field Scheduling has improved transparency and customer service in the Recreation Department. Better Service with New Online Recreation Permitting

Then it snowed… but we were prepared

Snow Budget vs. Actual Snow Costs A+ AA+ S&P DPW Snow Removal Account $9,947,825 FY2015 Snow Removal Budget - $977,652 Current Deficit $8,970,173 • Budgeted $977k • Spent $9.9M • Deficit $8.9M

Estimated Snow Removal Costs Department of Public Works Personal Service, Contractors, and Police Details $9,947,825 Fire Department Overtime $108,755 Police Department Overtime $76,720 Traffic and Parking Overtime $34,684 Constituent Services Overtime and Extra Hours $4,262 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 FY15 - $629,307 Appropriation of Free Cash FY15 - $3,000,000 Appropriation from Rainy Snowy Day Stabilization Fund FY15 - $2,000,000 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 • $418,630 in increased annual revenue • Resident Permits • Currently $30, Proposed $40 • $349,140 in increased annual revenue • Affordable parking • Still only $3.33 monthly for residential parking. • High parking demand • More than 11,600 registered vehicles per square mile. Residential parking permits are always free for Seniors and handicapped residents.

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

Our highest bond rating ever A growing commercial tax base Together, we’ve kept our finances strong and sound Growing stabilization funds

Highest Bond Rating Ever 2004 2014 A+ AA+ S&P 2004 2014 A2 Aa2 Moody’s Ratings guarantee savings for Somerville

Highest Bond Rating Ever “Budgetary performance has been strong” “Good financial practices” “Strong and growing economy”

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 151k 6.0M 465k 4.1M 5.2M 3.4M 2.5M 3.8M 12.4M 0 2 4 6 8 10 12 14 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 Millions Surplus Projection

We have achieved the most new growth in a decade Annual New Growth FY03-15

2.9m 11.5m 9.7m 5.8m 12.9m 0 2 4 6 8 10 12 14 Millions Projected Projected FY17-25 Annual New Growth is Projected to Increase $4.01m $3.17m

156 net new small businesses in 4.1 square miles since 2010 As of June 2015 Businesses are choosing Somerville

$57M $31M 0 10 20 30 40 50 60 2002 2004 2006 2008 2010 2012 2014 Millions 44% drop in state aid between FY2002 & FY2014

State Aid Cuts Taxpayers Pick up the Burden 43% 66% 0% 10% 20% 30% 40% 50% 60% 70% 2002 2015 Percent of Budget Covered by Tax Revenue =

We will be going to the tax levy limit 5.6% 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

Somerville: $2,577 One of the Lowest Spending per Capita in State (General Fund FY15) Cambridge: $4,888 Based on 2103 American Communities Survey population data and published 2015 city budgets. Boston: $4,180

Together, we’re working to shift the tax burden Projected Residential/Commercial Tax Share 26.41 26.61 27.26 29.85 31.43 36.73 73.59 73.39 72.74 70.15 68.57 63.27 0 10 20 30 40 50 60 70 80 Percentage Commercial Residential

Residential Exemption is now the highest in State at 35% 2015 35% ResX $2,498 Savings of $208 per month

FY2016 Revenue by Source Taxes 66% Penalties & Interest on Taxes <1% State Aid 23% Fines & Forfeits 3% Licenses & Permits 4% Fees <1% Misc Recurring 1% Other Revenue Sources 3%

192k 182k 286k 280k 820k 0 100 200 300 400 500 600 700 800 900 FY12 Actual FY13 Actual FY14 Actual FY15 Budgeted FY16 Projected Thousands PILOT Payments to the City PILOT Payments to the city increasing by 192% in FY16 PILOT Payments Increasing

$539,000 in PILOT funds from Partners included in this budget

604k 638k 767k 800k 977k 0 200 400 [phone removed] 1200 FY12 Actual FY13 Actual FY14 Actual FY15 Budgeted FY16 Projected Thousands Hotel/Motel Excise Revenue Hotel/Motel Excise tax projected to increase 22.1% in FY16 Hotel Tax Revenue Increasing

1.10M 1.08M 1.25M 1.44M 1.60M 0 0.2 0.4 0.6 0.8 1 1.2 1.4 1.6 1.8 FY12 Actual FY13 Actual FY14 Actual FY15 Budgeted FY16 Projected Millions Meals Tax Revenue Meals tax revenue projected to increase 11.5% in FY16 Meals Tax Revenue Increasing

Somerville is thriving because we invest, for the long-haul, in our orienting values So we can continue in FY16 to invest to make Somerville a great place to live, work, play, and raise a family. WORK LIVE PLAY FAMILY

In FY16, We Will Continue to Invest in Core Services • Building Inspector • GPS for Contractors • Water & Sewer staff • Admin Code Changes

We Will Also Invest to Take on Our Greatest Challenges From Affordable Housing to Zoning Overhaul

Youth Education & Development

A Historic Investment in Our Schools: 31% increase since FY10 $- $10 $20 $30 $40 $50 $60 $70 FY10 FY11 FY12 FY13 FY14 FY15 FY16 Millions SPS Budget 3.64% Increase

Supporting the Whole Child • New assistant to Director of Student Services • Additional school psychologist • Funding for board certified behavior analyst • Biogen partnership provides part-time college financial aid counselor • New full-time English Language Learner Department Chair

Sustaining Academic Success & Preserving Classroom Size • New adaptive technology specialist • Additional elementary teacher • Absorbing previously grant funded positions, including pre-k teacher and two full- time paraprofessionals • Support for additional AP classes working with Mass Insight

Investing in Youth Development: Recreation 2* New Outreach Coordinators for Recreation (*1.5 new positions)

Growing Opportunities for At-Risk Youth Intensifying Collaboration with Teen Empowerment and Roca. Funding dedicated to each organization.

Intensifying Affordable Housing Efforts • Funding for Universal Waitlist • New Sustainable Neighborhoods Coordinator (2- year position)

Expanding Prevention Efforts A Local Response to a National Crisis • Moving SCAP Director and Director of Prevention Services from grants to General Fund • Moving Jail Diversion Coordinator from grant to General Fund

Addressing Climate change Investing in our Future • GreenTech Program • Climate Study • LED conversion

Increasing the green environment in our urban city To come • Funding for contract arborist to enhance care for our growing tree canopy • Ash Borer prevention and mitigation

Maintaining Our Thriving Arts Community Providing funding to help replace declining state funding for local arts and culture grants

Supporting our small businesses: • Increased funds for citywide storefront improvements • Funding for Main Streets Initiatives After Before

Community Preservation Act Open Space & Outdoor Recreation Affordable Housing Historic Preservation

Community Preservation Act Nearly $5 million available in FY15 will fund… $2,206,028 $1,660,996 $227,463 $507,880 $132,094 Affordable Housing Historic Projects Open Space/Rec Projects Open Space/Rec Reserve Future Project Reserve - 163 Glen St. Redevelopment - PASS Program - Better Homes Program - Housing at Mystic Water Works - American Tube Works Complex National Register Nomination - City Hall Rehab Design - City Archives Processing - Milk Row Cemetery Rehab - Somerville Museum - Temple B’nai Brith - Prospect Hill Tower & Park - Community Growing Center - Healey to Mystic Master Plan - Groundwork’s School Garden Classrooms

Investing in Somerville youth schools people parks

Make Somerville a Great Place to Live, Work, Play and Raise a Family WORK LIVE PLAY FAMILY WORK

Budget Accolades GFOA Distinguished Budget Presentation Award for FY15 Budget Certificate of Achievement for Excellence in Financial Reporting for FY14 CAFR

Thank you