FY25 Mayors Budget Presentation — File 24-0814

City of Somerville FY25 Budget City of Somerville, MA Mayor Katjana Ballantyne Presented to Somerville City Council May 30, 2024

Our values guide our budget Our goal Create a thriving and equitable Somerville A track record of progress Building on prior investments and maintaining essential services Thinking long-term Setting the City up for success now as well as in the long term

Section 1 The landscape Building a budget in a changing environment

Progress despite new challenges While many communities are cutting services, Somerville’s outlook remains strong • Sustained growth despite an uncertain economic environment • FY25 new growth is expected to remain high despite moderation • Current economic challenges have impacted revenue projections for FY25 • Our history of strong financial management girded us for this challenge

Careful planning and strategic growth have led to the second highest new growth in history The City has seen record new growth each year since FY20, from $8.3M up to $17.7M in FY24. Staff project $13M in new growth for FY25. Growth is moderating but still strong. 0 2,000,000 4,000,000 6,000,000 8,000,000 10,000,000 12,000,000 14,000,000 16,000,000 18,000,000 20,000,000 FY20 FY21 FY22 FY23 FY24 FY25 (Proj) Residential Commercial, Industrial, Personal Property

A foundation for progress for all A sound budget that... • meets our obligations, • prioritizes our schools, • provides fairness and equity for our workers, • advances our aspirations for progress, • secures critical priorities, and • puts us on firm footing to weather future uncertainty.

The Fiscal Year 2025 extends from July 1, 2024 to June 30, 2025 Link: somervillema.gov/budget 7 $360.0M FY25 City of Somerville General Fund Operating Budget $19.7M increase over FY24

Section 2 Budgeting the Somerville Way Establishing goals and developing approaches

We’re listening to your priorities year-round Budget Emails & Conversations Surveys Task Forces City Council Community Meetings Participatory Budgeting Data

▪Submitted rent stabilization home rule petition ▪Released results of Public Safety for All Survey, informing progress of PSFA Task Force ▪Conducted Cultural Capacity Planning for the Arts led by Cultural Ambassadors ▪Expanded workforce of community health workers, multilingual Equity Support Team, and 311 staff ▪Developed first ever Pollinator Action Plan ▪Piloted free MBTA passes for SPS and City staff ▪Launched Climate Forward 2050 ▪Created coaching for SHS graduates in their transition to post secondary education / careers ▪Advanced digital equity planning, City named a 2023 Digital Inclusion Trailblazer Delivering on FY24 goals ▪Established first ever seasonal warming center ▪Launched Municipal Voucher Program ▪Rapidly relocated the WHCIS school and advanced the MSBA funding process ▪Launched first-ever Participatory Budgeting ▪Facilitated 344 units of affordable housing in the pipeline, including Clarendon, 299 Broadway, YMCA redevelopment, and more ▪Advanced numerous infrastructure projects and tackled deferred maintenance ▪Continued state advocacy and local efforts to open an Overdose Prevention Center ▪Opened rehearsal space for dancers ▪Made improvements to our permitting process 10

Continued focus on financial stability and sustainability Somerville is a good investment, based on our 'focus on long-term planning' • “Very strong local economy, anchored by a stable residential sector with new growth due to regional demand for life-science space and housing with access to local employment centers and universities, evidencing its participation in the broad, diverse Boston metropolitan statistical area; • Well-embedded strong financial-management policies, practices under our Financial Management Assessment (FMA) methodology, reviewed consistently with a focus on long-term planning and regular reporting, and strong Institutional Framework score; • Consistently positive budgetary performance with another positive result expected in fiscal 2024 with reserves higher than most similar-rated commonwealth peers, after including available stabilization funds and very strong liquidity”

Funding community needs & priorities in FY25 Our priority remains centered firmly on what we see and hear from our constituents and stakeholders We remain guided by community goals and priorities: FY25 focuses on ▪schools, ▪worker equity and retention, ▪critical immediate priorities, ▪targeted aspirational goals, ▪and an eye towards fiscal stability

Section 3 Multiple budgets built on one another Strengthening previous investments to achieve our goals

The FY25 budget builds on investments we’ve made together Foundational • IT staff has grown by 33% since FY22 • 10 new positions in Health & Human Services since FY22 Core + More • Multiple Housing and Housing Stability staff added • Anti-Displacement and Digital Bridge staff added for first time • SomerViva Office of Immigrant Affairs budget has tripled since FY22 • Office of Sustainability & Environment staffing has doubled since FY22 Generational Investments • New Somerville High School • Somerville Ave Utility & Streetscape Improvements • New parks & open space • Planning advancing for new Winter Hill School project

Holding the budget to foundational standards Do ALL residents have equitable access to the services and resources they need? Are we enhancing customer experience with City services and interactions? Are we supportingstaff and the recommendations of the Work Better Task Force? Equity Customer Service Work Better Task Force Are we creatingproject management capacity and identifying lead staff on initiatives? Project Management Are we moving the needle on Climate Forward? Sustainability

Delivering on community priorities Inclusive leadership helps inform a municipal budget by ensuring diverse community perspectives and needs are considered, leading to more equitable and effective allocation of resources. Housing Stabilization Homelessness Alternative Response Housing Affordability (incl. acquisition) Composting Rodent Mitigation Medical Debt Building Decarbonization Out-of-School Time Programming Overdose Prevention Facility Customer Service Project Management Work Better Task Force Sustainability Equity

Section 4 Prioritizing Investments for FY25 Ensuring support for schools and City workforce

FY25 Budget Composition Schools remain the largest component of the City budget, at 30% of all budgeted expenditures. 30% 15% 15% 12% 11% 6% 5% 2% 2% 2% Schools Pension & Fringe Public Safety General Government DPW Debt Service State Assessments Other Capital Culture & Rec

Prioritizing youth and schools First and foremost, this budget invests an additional $7M in Somerville Public Schools and funds 36.6 net new school staff on the budget Our school budget bucks regional school trends toward cuts and layoffs Significant increase in school staffing: +36.6 net new full-time equivalent (FTE) positions funded Focus on comprehensive support for students from cradle to career as they recover from pandemic impacts Establishment of long-term budget planning for schools incorporates with City-side planning

School budget by year The greatest proportion of growth in our budget has been to the School Department. The SPS budget including the FY25 proposed budget, will have increased 27% in three years. (+$22M over FY22) 0 20,000,000 40,000,000 60,000,000 80,000,000 100,000,000 120,000,000 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 (proj) +27%

Advancing employee equity and organizational capacity Funding in Salary Contingency will be used to fund data-backed increases to employee wages The budget includes salary contingency funding for union negotiations and the wage compensation study This benefits staff and the City: 1. Commitment to fair and equitable pay 2. Addressing long-standing inequities 3. Supporting worker recruitmentfor quality applicants 4. Saving on costs by enhancing worker retention 5. Reducing the need for overtime and costly outside contractors by getting more positions filled

Section 5 Strategic investments Maintaining core services and advancing progress for all

We’re listening to your priorities year-round Budget Emails & Conversations Surveys Task Forces City Council Community Meetings Participatory Budgeting Data

Details about FY25 investments Homelessness Coordinator in HHS Additional funds to the Affordable Housing Trust Fund Additional staff support for the Office of Housing Stability Homelessness & Housing Facilities Coordinator in DPW Construction Liaison & Design Manager in IAM Roof repairs and Central Library carpeting Facilities & Infrastructure Continue the senior taxi programthrough FY25 Wage Theft Coordinator in OSPCD Maintain Community Health Worker Manager in HHS Seniors & Vulnerable Residents Transition away from rodenticide in city and school buildings Green stormwater infrastructure maintenance Curbside composting pilot Sustainability

Details about MORE FY25 investments Increasedpart-time temporary staffing and programming support in Parks & Recreation Youth Fit out, supplies, and staffing for the new fire stationat Assembly Row Implementation of a new modern fire alerting system Fire Safety Civilian Crossing Guard Supervisor position added to Police Public Safety Recommendations Customer-centric training for public-facing staff FMLA third-party administration vendor contract Project & System Management

Resourceful financing BEYOND the General Fund One time, temporary, or experimental investments have been funded through alternative sources A Public Safety for All (PSFA) Program Manager to develop and advance initiatives including alternative emergency response, anti-violence, civilian oversight, and accountability efforts, as well as results of the SPD Staffing & Operations Analysis, funded by the Racial & Social Justice Stabilization Fund A Curbside Composting PILOT Program to advance Somerville Climate Forward goals for energy efficient waste management in the amount of $350,000 from Certified Free Cash Funding for a city building roof replacement as well as replacement of carpeting at Central Library Regular investments into the Affordable Housing Trust Fund, including $2M of free cash, $1.3M from Community Preservation Act funds to bring the total balance to $33.9 in the AHTF Funding for parent/guardian MBTA passes as a bridge to a long-term strategy funded by free cash

Section 6 Planning in a changing environment How to thoughtfully and carefully continue progress against financial headwinds

Investments within the FY25 budget We took a careful approach during budget development Permanent, ongoing investments were prioritized for general fund inclusion at this time. We were able to make these tactical investments due to: 1. Use of reserves to fund debt service, as planned in the CY23 CIP, 2. Use of free cash to fund a portion of our planned OPEB contribution, 3. Use of capital stabilization to fund one-time smaller capital projects, 4. Delay of ARPA inclusion to general fund in order to prioritize ESSR,

Short- and long-term strategies for financial sustainability Eligible City ARPA projects have been allocated funding through FY25 to prioritize a shift to the School budget for ESSR-funded projects lacking that flexibility. ARPA usage Continued lobbying for more flexible funding sources is essential to the long-term health of Somerville’s budgets. Beacon Hill City policy references specific measures of fiscal health which must be adhered to in the long-term. 1. Ensuring projected surpluses in future years. 2. Utilizing Debt Service in a sustainable way. 3. Fully funding our long-term liabilities such as OPEB. By sticking to a financial framework, we can mitigate the impacts in leaner times. Stay anchored to our key financial metrics

Continued progress coming in FY25 • Launch ADA Task Force • Work to develop a Cultural Trust model • Implement Guaranteed Basic Income (GBI) Pilot • Mobilize across City and SPS to advance implementation of climate goals • 2nd cycle of Participatory Budgeting (PB) • Establish City’s first ever Language Access Ordinance • Continue to develop employee engagement programs and trainings on equity • Enhance website accessibility • Offer career advancement trainings and support for Somerville residents, including adult English Language Learners • Support local business districts, including technical assistance and small business marketing campaign • Design and construct numerous parks, schoolyards, and open spaces • Develop Out of School Time Task Force • Plan for sustainability of ARPA funded initiatives • Deliver on infrastructure projects and maintenance of buildings

Thank You For more information, visit: www.somervillema.gov/budget