Summary: The City Council adopted the City Manager’s FY15 Budget as proposed without any changes. The budget amount is $333,987,477.
Meeting begins at 6 pm.
Councilor Mercier mentions letters from electrical provider to residents about switch in electricity supplier. Assures everyone this is nothing to be concerned about.
Budget session that was recessed last Tuesday reopened. Preliminary discussion about process to follow tonight. Councilor Kennedy recommends going department by department rather than by line item. He reasons that even if no cuts are made, it shows a level of scrutiny and concern that is necessary in light of tax increase. Mercier says she seconded the motion to continue so she would have time to review the budget. She would prefer letting each councilor ask whatever questions he or she has rather than reviewing by department because she doesn’t see major cuts to warrant that. Councilor Belanger says he supports what Kennedy wants to do. Councilor Samaras says he has questions about school funding, especially regarding net school spending formula. Councilor Leahy says he wants to go by department because he has suggestions he wants to offer. Mayor decides should go department by department but Mercier asks to be able to pose her questions first.
Mercier directs us to p.73 in the Treasurer’s Office to miscellaneous line item which shows $103,000 increase (it’s a revenue line item). Bob Healy says the past two years were lean years and they anticipate it returning to the long term average. He says there are many estimates in a budget, some come in lower, some come in higher, they usually balance out by the end of the fiscal year. She asks about “40R” fund which is a state trust fund that the city can now access since the city council adopted the “smart growth” zoning ordinance. City Budget Analyst Connor Baldwin (who is seated with the city manager) answers question about medicare reimbursement.
Councilor Rourke asks for an explanation of revenue projections. CM Murphy explains that local aid is a set number set by the legislature. School building reimbursement is a fixed number. We know what we will receive from the prior tax levy. Levy growth with a 3.5% increase is another number. Local receipts is an estimate based on past performance. Biggest question mark is new growth ($2.5 million). He asks Sue LeMay, the assessor who came up with that figure to explain how she did it. She says it’s from all the inspections through the year – additions to real estate mostly but also personal property of businesses. She says that number is “very solid.” Murphy says “we are very confident in these revenue projections.” Rourke asks if any free cash is being used in this budget: $415,000 but Murphy expects when FY14 books are closed there will be a like amount of free cash so that account will be replenished.
Samaras asks about Charter School reimbursement. Murphy says “this is the first time in years the city council will be fully funding the foundation school budget.” Says “our plan is in FY15 we will totally address the net school spending issue.” Says giving school department an additional $2.9 million over last year. Planned to send full charter school reimbursement amount to the schools which will drop the arrearage from past years to be about $2 million. Says anticipates being able to wipe out that deficit during FY15 due to hiring freeze and other cuts. Samaras says he’s concerned in the future because of the inconsistency of the state’s reimbursement. Murphy says it will always be an issue but once we wipe out this arrearage, the city will get to keep the full reimbursement amount.
Bill Martin asks about motor vehicle excise tax increase. Healy says people are billing their bills on time. Martin says big question for him is amount of new growth and gently presses city manager on his confidence in it. Murphy defers to LeMay who says she expects more than $2.5 million but she’s building in a cushion in case values go down. She says there are hundreds of new condominiums, the new Jeanne d’Arc Bank Building. Martin then asks about pension reserve fund; how much will be left after the payment to the pension fund is made. Virtually all is being used this year. Martin asks about the “new positions” numbers which seems to be a big increase. Murphy says it now includes part time employees and grant funded employees which weren’t included before.
Corey Belanger asks about revenue from “tax liens redeemed.” Murphy says we’re being very aggressive with tax title properties. This year we’ve raised $2.2 million. He’s confident we’ll raise the same next year.
Ed Kennedy asks about motor vehicle excise estimates which are $1 mil less than actual receipts this year. Asks why that estimate isn’t $1 mil higher to allow the tax levy to be reduced. Healy says excise tax is most flexible receipt you have an is a likely source of free cash; recommends it stay as listed in budget.
John Leahy asks about long term plan for road repairs. Murphy asks Ralph Snow of DPW to explain. He says most of the money comes from the state through “chapter 90” funding. That’s supplemented by city contributions which in this budget is just $50,000. Leahy suggests more money be spent on this in the future. Murphy asks Conor Baldwin to discuss city’s capital improvement plan. Much of this in past years has been devoted to road upgrades. Leahy then asks for an explanation of the management arrangement for the Lowell Memorial Auditorium. Says “we’re still paying a lot of money for it.” Healy says “that’s what the contract the city signed provides for.” Leahy asks why we don’t see a bigger saving for trash pickup. Ralph Snow says solid waste cost is going up $2 per pound this year. Then there’s a big rebate from Wheelbrator but most of that was included in the FY14 budget so only a small amount was available for FY15 budget.
Councilor Milinazzo asks about net school spending which was a $4 million deficit. Murphy clarifies it. Does any money spent on Vocational School count towards net school spending? No. Milinazzo next asks about growth in building permits and asks if that correlates to new growth. Healy says the building permit would have already been issued. The estimate in this budget is for anticipated new projects. Milinazzo asks about health insurance. Healy explains that this is the last year the city will receive a big amount in return for having switched to GIS but overall the cost of GIS has been more stable than the previous system.
No more general questions. Mayor will now review budget by department and council will approve with roll call for each. (I’ll only comment on ones that raise question or are in dispute).
Councilor Belanger critical that appropriated funds for “marketing” are not being spent on direct marketing but on other things like overtime, maintenance, membership fees, etc. Asks City Manager to consider finding money from other sources to pay those things to devote this full appropriation to marketing. Leahy concurs, saying if we spent more money on this we would get a lot more in return.
Law Department – line item for $200,000 for outside services. Mayor Elliott relinquishes the chair to speak on this. Says we need to start making an effort to reduce dependence on outside attorneys. Says he was surprised there was an increase in this line item. Wants to send a message. Asks how much of this is being spent on surveillance. Solicitor says “zero” since surveillance is conducted under workers compensation line items; says that amount is generally less than $10,000 per year for surveillance. Solicitor says about $100,000 is doctor and nursing payments. The rest is litigation related. It includes outside counsel fees but that includes hearing officers hired by city; also litigation costs, expert witness fees, etc. Elliott makes a motion to reduce this line item by $25,000. (Someone seconds it). Belanger says “this number jumped out at me.” Says library case where someone makes $30,000 has incurred $200,000 in expenses. Says anything of this amount should have to be approved by the city councilor. Manager Murphy says this is based on a five year historical perspective and added some extra because of a big case they anticipate this year. It seems the amount previously appropriated dropped down significantly for a few years then went back up. [discussion continues for some time]. Councilor Martin chastises [without naming them] Councilor Belanger for stating the city “never settles” and the Mayor for saying this line item is “spent defending wrong doers.” Martin says he’s quite sure many of those defended by the city are falsely accused. The motion fails with just the Mayor and Councilors Rourke and Belanger voting for it.
9:10 PM – Council passes all regular portions of budget; moves on to enterprise funds (like parking).
9:20 PM – Councilor commend City Manager Murphy for his budget. Council adopts FY15 budget as proposed (without making any cuts, I believe) in the amount of $333,987,477.