Morning.

Um for the record, my name is Ben Weber.

I'm the District Six City Councilor and the chair of the Boston City Council on Ways and Means.

Today is April 14th, two thousand twenty-six.

The exact time is ten.

Oh five.

This hearing is being recorded.

It is also being live streamed at Boston.gov slash city dash council dash TV and broadcast on Xfinity Channel Eight, RCN Channel Eighty Two, and Fios Channel Nine Sixty Four.

The city's budget review process, uh, which uh officially starts now, although we've had several pre-budget hearings and a listening session, uh actually two uh here will encompass a series of public hearings uh beginning now and running through June.

We strongly encourage residents to take a moment to engage with in this process by giving testimony on the record.

Uh you can do so you can you can do this in several ways.

Uh first you can attend one of our hearings and give public testimony.

You will we will take public testimony at the end of each departmental hearing uh and also at two hearings dedicated to public testimony.

The full hearing schedule can be found on our website at Boston.gov slash council-budget.

Our scheduled hearings dedicated uh to public testimony are in person here in City Hall on Tuesday, April 28th at 6 p.m.

And again here in City Hall in person on Thursday, May 26th at 6 p.m.

You can give testimony in person here in the chamber or virtually via Zoom at all of our hearings for in-person testimony.

Please come to the chamber and sign up uh on the sheet near the entrance for virtual testimony.

You can sign up using our online form on our council budget review website, or by emailing the committee at ccc.wm at Boston.gov, or by emailing uh Kurishma Choan at uh Karishma, that's K-A-R-I-S-H-A.C-H-O-U-H-A-N at Boston.gov.

Um when you are called to testify, please state your name and affiliation, residents, and uh limit your comments uh to a few minutes.

We'll have two minutes uh for each uh person giving public testimony and just make sure you're prepared for that time limit so you can have all your concerns heard by us.

Email your written testimony uh if you have it to the committee at ccc.wm at Boston.gov.

Um you can also submit a two-minute video of your testimony through the form on our website.

Uh for more information on the city council budget process and how to testify, please visit the city council's budget website at Boston.gov slash council-budget.

In-person public testimony will be taken at the beginning of this hearing following the panelists' presentation.

Individuals will be called in the order in which they were signed up, um, and we'll have two minutes to testify.

If you wish to sign up for public testimony, you have not done so already, uh, please uh either sign in on the sheet that's uh over there now, or uh uh email uh our staff liaison at Kurish Machoan, it's K-R-I-S-H-M-A.CHO UHAN at Boston.gov for the zoom link, and your name will be added to the list.

Today's hearing is on docket numbers 0733 to 0740, an overview of the FY27 operating budget.

This is one in a series of hearings we'll be conducting on the FY fiscal year 27 budget.

These matters were sponsored by uh Mayor Michelle Wu and were referred to the committee on April 8th, 2026.

Uh today I'm joined by my colleagues in order of arrival, Councillor Murphy, Council President Braden, and Councilor Flynn.

We've received a uh letter of absence from Councillor Coletta Zapada.

Uh I you know, I so we're we're because we have a lot of work ahead of us and a lot of hearings, we're not going to be doing opening statements at these hearings, but because today is the first, and because there's only three of you, if anyone you know wants uh one minute each to say anything, uh Councilor Murphy.

Thank you, Chair.

Could could you explain?

Are you going to me already?

Uh well, yeah, I so but my my microphone.

Yeah, well, oh uh sorry.

Yeah.

Um thank you.

Could you just clarify before we start?

See although this is the beginning of many, what you meant by there will not be opening statements.

Yeah, so uh sometimes in some hearings, every counselor gets an opening statement before we before we go to qu go to the panel and go to questions.

Uh, because we're gonna be spending a lot of time.

Uh I I you you can give an opening statement as part of your questions, but we're not gonna have that part.

I think uh councilor Orrell did that last year, and I think it was effective in making the hearings more efficient.

But because today is the first one.

If you want to say something.

I always want to say something.

Thank you again for being here.

Have some obviously questions and some concerns, knowing that you know, we got the budget, I guess was a formally shared last Wednesday, and since then have been hearing directly from organizations, from students.

So looking for some clarification, and I hope through the slides and your presentation, and then just questions answered.

But one email that was forwarded to me from the Age Strong Commission yesterday was notifying a nonprofit provider that certain grants would no longer be funded.

And since then, um I've received outreach from students that their jobs will are being cut and other youth employment opportunities that are tied to community-based organizations.

So I heard it's just a rumor though that maybe the city started sending out emails on Friday, and organizations, nonprofits, individuals are finding out that you know opportunities or jobs they had or grants they were funding are no longer being funded.

And it does tie to the question that I think four times now, Krishna.

Um I've put on the record, and when I had my one-on-one with Michelle with Mayor Wu, it was the only question I asked to say, like back in was it December, January when we reached out to each department saying we need to make some cuts.

What was that communication to each department and what did they send back?

And now seeing that we do have the budget in front of us, I think it's still important to see that because I do want to line up where the cuts were made and how are we communicating and what are we going to do about it?

Thank you.

Okay, thank you, Councilor Murphy.

Counselor uh Braden, do you have uh no?

I think I have my time for sure.

Uh Counselor Flynn, one minute.

Thank you, Mr.

Chair.

I'll be one minute.

I want to say thank you to the chair, administration team that is here over the last several years of focused and advocated for us to be more fiscally disciplined, fiscally responsible, transparent and accountable to the taxpayers of the city.

I proposed several ways to get our economy moving again, including a city city council blue ribbon commission that was approved twice, which would encourage and support businesses in downtown Boston.

I know our economy is struggling, especially economic development.

And I propose reducing the IDP.

I propose reducing the regulations that we have on Birdo.

I want to see city workers and businesses back to work.

I do believe the rent control debate is hurting financial investors that want to come to Boston.

But I want to support a pro-business climate in the city so businesses understand that Boston is open and welcoming to businesses.

We have to change the perception that we are anti-business.

Businesses help pay for our school teachers for our roads, for our bridges, supporting our elderly.

Mr.

Chair, thank you.

Okay, thank you very much.

We're joined by Councillor Sharon Durkin.

Uh I, you know, I'm just we're generally we're waiving opening statements.

Uh people can give statements during their questions.

Thank you.

Well, I'm excited to dig in that.

Okay, okay.

Uh you know, I I just uh brief statement for me.

Uh you know, I um I I think where we're seeing is a budget where we're having to we we have budget deficits this year, uh and we're gonna look how that's gonna impact next year.

Uh for me, a question I'd like to answer over the course of these hearings is you know, is this uh sort of a condition that's gonna continue on into the future is not like one thing that we can point to like a housing crisis or a dot com bubble or or something.

We just sort of have costs increase and the amount of revenue that we can raise doesn't increase as fast.

You know, how are we gonna plan for the future in an environment where you know uh right now it's it's uh it's harder, it's hard to do all the things that we want as a city and you know whether this is gonna continue on into the future.

So we we've been joined by Chief Financial Officer Ashley Graffenberger and budget director Jim Williamson.

Um I believe you have uh a presentation, so I'm gonna hand this off to you.

Thank you, Mr.

Chair.

Thank you.

Good morning, counselors.

Thanks for having us.

Um excited to kick off this very important pro phase of the budget process for this year, so thank you uh for taking uh a lot of time with us today.

We'll walk through a couple of slides related to the budget and then look forward to your questions.

So the FY27 recommended budget is $4.9 billion and is a thoughtful, responsible financial plan that honors the city's commitments, prioritizes meeting our long-term obligations, and protecting core city services while setting Boston up for the future.

The recommended operating budget is projected to grow by just 2.1% or 99.4 million, the lowest rate of growth in recent years.

Revenues continue to grow but are outpaced by significant cost increases, particularly in health insurance and public education costs, which necessitated difficult choices in order to deliver this balanced budget.

As a result of this slower growth, city department budgets overall decreased by 1.3% or 20.4 million.

These reductions were not taken lightly, nor were they easy, but were necessary in order to preserve services and filled positions in the city.

The FY27 budget is coming at a time of strain for municipalities across the commonwealth, driven by costs that outpace the growth allowed under municipalities' main revenue source property tax constrained by Prop 2.5.

Despite this constraint and challenge, the city maintains its commitment to responsible budget management.

And unlike other municipalities in the commonwealth this year, this recommended budget does not rely on additional tax revenue in the form of a Prop 2.5 override, nor does it increase its use of reserves to support ongoing expenditures, ensuring that we do not create a fiscal cliff for ourselves in FY28 and beyond.

Rather, this budget appropriately aligns spending with expected revenue growth.

We continue to closely monitor impacts of federal policies, whether directly on the city or in the overall local economy.

And we believe that the FY27 recommended budget is thoughtful and responsible and puts us in the best position to manage through the current economic environment.

So I'll walk through two charts real quick to provide kind of context for revenue and expenditure growth.

So and we have a lot more on this, so I'll breeze through this, but revenue growth is primarily driven by property tax in this budget, which while constrained represents a stable and growing source of revenue.

The recommended budget assumes that we will maximize up to the levy limit and makes an assumption for new growth at 40 million dollars.

We have also assumed increased use of what's known as available funds through an increased use in the parking meter fund to support to support street operations in this budget.

And state aid, while our second largest source of revenue is only projected to grow by 14 million, consistent with the governor's budget from January 2026.

We are continuing to project modest growth in excises, but that remains relatively stable.

And then consistent with the current fiscal year, we are projecting modest reductions in revenue from departments and licenses and building permits.

And lastly, we continue to assume a reduction in interest income due to expected rate cuts during the year.

This is due to the things we've been talking to you all about for you know the last couple of months.

Um the need to increase employer contributions to health insurance as a result of increased cost of health care, the rise in GLP1 usage, and the need to rebuild our health insurance trust fund.

Um and I just want to be clear, oh sorry, I didn't move.

I want to be clear that the um uh 97.3 million in health insurance costs takes into account the savings associated with utilization management, which we were able to negotiate with our union partners just a few weeks ago.

Uh public education costs, which represent the costs associated with BPS, excluding health insurance, as well as our charter school uh contribution represents 50 million dollars in growth, with BPS uh representing about 40 million of that, and the the balance, the 10 million from charter schools.

Um, the 40 million uh assumed growth in BPS, uh, like I said, is the non-health insurance component of their budget growth and represents increased costs from wages and other contractual obligations at the school district.

Lastly, we're projecting modest growth in fixed costs and other central appropriations, notably assumed increases in our collective bargaining reserves, our state assessments, and the reserve for execution of courts.

In order to accommodate this growth, the budget makes a number of targeted reductions.

Centrally, we are assuming reductions from both our pension schedule as well as debt service.

So on the pension side, the retirement board in March voted to adopt a revised contribution schedule, which would we're calling it the glide path approach, which would step down our contribution in this year and going forward while still maintaining our date of full funding the system by 2028.

This approach not only provides some short-term budget relief, but also results in a system that is overfunded, 105% funded by 2031, which is ultimately will allow us to protect the system and its funding status against market volatility.

And on the debt service side, we assume some uh modest savings from a restructuring and a refunding of prior debt issuances.

And then, as we mentioned, city departments represent the remainder of the savings, about 20.4 million dollars.

Okay, uh, we'll dig in a little more to the revenue.

Um as I mentioned, um, you know, property tax continues to be a dependable source of revenue in this budget.

The overall property tax represents about 73% of our total revenues and accounts for you know almost entirely all of the growth in our revenue in our budget, budgeted revenue.

Um we're assuming modest increases in excise, reductions in interest on investments, permitting and departmental revenue, but overall we believe this is a responsible revenue forecast that is reflective of our current economic situation.

Uh we couldn't come before you without a pie chart, so this is just a visual representation of our revenues again, property tax representing uh the the lion's share of our total revenue.

Uh here we have a breakdown of revenue sources as a share of total budget as well as changes between FY26 and 27.

Um quickly in FY27, like I mentioned, uh property tax will represent the greatest share of our revenue at 73.1%, followed by state aid at 10.9%.

Uh departmental and other local revenues, including interest is uh in total 7.9% of our budget, and excise represents 6.4% of our budgeted revenue.

Uh to drill in a little bit more on property tax.

So, like I mentioned, projected to grow represents about 73% of our revenue.

Um FY27, the combination of the 2.5% allowable levy increase and a conservative assumption for new growth of 40 million and an adjustment to cover property tax abatements are projected to increase property tax revenue by 126 million or 3.6% over FY26.

Property tax has consistently grown over the last several years, as you can see, proving to be very reliable and stable source of revenue for the city despite being constrained.

And it's important to note here again that property values do not impact this revenue picture.

The budget assumes growth consistent within the limits of Prop 2.5 and does not make any assumptions about changes in values or tax rates.

On the state aid side, uh, state aid represents just about 11% of our general fund revenue.

Um as I mentioned, this is representative of the numbers that were in the governor's budget in January.

I believe the houseways and means budget comes out soon.

So we will review that when that comes out.

But as of right now, this is reflective of the governor's assumption.

While the overall amount of revenue from state aid is projected to slightly increase by 14 million, the city evaluates state aid on a net basis, meaning aid remaining after subtracting assessments that we have to pay back to the state.

When matched up against our various state assessments, this amounts to a million dollar increase in our state aid, net state aid compared to FY26.

Additionally, net education aid continues to be negative.

And so that continues to be negative as it was last year.

But in the bigger picture, state aid has fallen significantly over the past two decades when it made up almost about a quarter of the city's general fund, which has since increased reliance on property taxes and other revenue sources.

So we're budgeting accordingly.

And just as a reminder, excise is comprised of motor vehicle, rooms and meals, and other such as jet fuel, marijuana, and short-term rental.

And lastly, from me, just a visual representation here of the interest on investments.

So this source of revenue for us really peaked in FY24, and we've been slowly ramping that down, uh, kind of consistent with the assumed rate cuts uh from the Fed.

Um in this budget, we are assuming 40 million dollars in interest income, which is a uh 50% reduction from FY26.

Uh and we are uh assuming in here at least two rate cuts, which is driving the uh downward adjustment in this revenue source.

But I think what's important to note is prior to this high inflationary environment, we were generating much less money uh from interest income, so want to have it reflect more uh normal historic levels of funding.

Okay.

So with that, I'll turn it over to Jim.

Great, thank you, Ashley.

So on the expenditure side, uh here is a visual representation of how the uh annual operating budget is divided.

Uh it's sort of the complement to the revenue division.

So the largest component of um of the FY27 annual operating budget has as it has been for many years is public education.

Uh, you know, this is includes both the Boston Public Schools as well as charter school assessment.

Uh it's then followed by public safety uh agencies, um fixed costs, which are often the operational components of uh delivering service as well.

So uh that's where the debt service is paid to support the construction of city assets that basically are the tools that deliver uh city services, as well as the pension supports uh you know the the largest asset uh the city owns, which is the human capital asset that's the city employees who provide the services every day.

Uh and then the smaller slices as they go down, city departments, um wages and benefits, which is a component of health insurance, uh the OPEP appropriation, uh collective bargaining reserve, uh Medicare, all those are sort of bundled in that in that pie.

Moving into uh a complementary sort of uh chart of um how the budget is is divided in terms of appropriations versus fixed costs.

So on the appropriation side, um the we we we've um sort of communicated uh the budget briefing on Wednesday morning.

We talked about how city departments it's also uh captured in um the growth chart that uh actually recity departments are uh be reducing by 20 million dollars or 1.3 percent.

Uh public health is is growing, uh mainly uh uh centered around health and health benefits.

Uh there's a pension component as well that sits in the public health commission, uh Boston Public Schools, although it says uh 88 million and 50 uh 5.4%.

But when you adjust for for health insurance, it's it's more in the 40 million or 2.7% increase.

Um collective bargaining is sort of just that uh amount that's reserved for open contracts to settle, and the OPEP has been held uh constant with the alignment in this case to uh the non-recurring revenue of uh free cash that supports that.

And uh other other central funds are include things like health insurance, um, you know, Medicare, workers' comp, some central funds that support all of the city departments.

So Ashley talked about how we we took the opportunity to look at our long-term liabilities, see where there is an opportunity to make make some changes to sort of relieve some pressure on needed changes that may needed to have happened at the department level.

So with pensions under the under the new schedule, we were able to save 25 million dollars.

The appropriation is going down 5.3%.

Debt service down $13 million.

You can see that this is the complement that goes into public education.

This is the growth in the charter school assessment.

The city of Boston is also assessed for its one of the communities that benefit from having the MBTA and our and our city boundaries, so that went up by three million dollars.

In the other assessments were roughly the same.

And we're we're also still working off the sort of uh unfunded pension liability of the former uh city agency and subcontent sheriff in the reserve is a component of uh state law that requires us to maintain um uh on our balance sheet of reserve uh called the Traeger Reserve, uh and there's not a requirement this year based on uh payments made in uh prior years.

So um uh we'll we'll start to talk about you know that component of the the departmental reductions uh target reductions that we're talked about as we approach uh departmental hearings in the coming weeks.

You'll you'll probably get more nuance and uh um you know uh color on those, but it includes uh vacant position reductions and salary savings equivalent to uh 785 positions.

So that's like increasing the amount of salary savings over um what was included in the 26th budget.

Uh it's a combination of reduction of long-term vacancies, so we're always tracking where positions are when's the last time they were filled.

Uh and then also just through this controlled hiring process that we've sort of first rolled out in in December, sort of continued on in a March sort of um spending uh control continuation, uh it's sort of a more moderated approach to filling vacancies.

Uh but uh we did we did because uh city employees are the are the primary delivery of city programming and services, there are no city uh layoffs uh contemplated in this budget.

Again, uh it was the strategic management of those long-term liabilities that achieves that savings and and spared any you know further more painful or challenging cuts to departments.

Um it makes these target reductions to city departments while protecting the core services.

Uh there's a lot of general belt tightening in areas such as uh uh building and equipment repair, these are the contracted services category, other other more general contracted services, supplies and equipment, and these are just uh departments going through the process of sort of looking where they have some flexibility to reduce spending in that.

Um in the sort of the more uh the the uh the area where we um sort of over the last four years there's been a lot of investment in certain grant making programs that uh we we needed to uh reevaluate going into this fairly constricted um uh budget year.

So there's 12 million, roughly half of the total total contractor service reductions come from reducing or removing funding from uh discretionary uh grant programs.

And there's also um uh reduction for school year jobs, so this was uh uh sort of initially offered.

It's sort of the the theory is is that uh school uh summer jobs are sort of the flagship uh sort of um core, most core um uh youth job program that needed to be protected.

Um and it's it's sort of also where youth are sort of on uh not in school, don't have that sort of benefit of being in in the school system at that time during during the summer.

So that's sort of where that approach came from.

And then again, so these we'll cover in the next uh slides sort of cut um sort of top line overviews.

Uh I know you'll you'll spend a lot of time as you have departmental hearings uh to meet with cabinet officials and department heads in the coming weeks to sort of delve into this uh deeply.

But what we want to take away and what everybody to take away from from this hearing is this this budget does deliver a lot of services, a lot of um core critical services that we're all expecting in will be delivered.

So it's we're sort of very focused on the basic city services.

I think through you know, a lot of conversations we've had with the council leading up to the the uh budget submission.

Uh it seems to be almost universally across that protecting city services, uh core city services is sort of the paramount.

So we've had some uh you know, there's been a lot of uh roadways resurfaced, uh potholes filled.

Some of this straddles the capital budget, so potholes uh may uh may be filled in the uh in the uh operating budget, but uh the capital plan might be delivering the resurfacing component to it.

Uh but it's it's city staff uh who basically plan, organize, and help manage the implementation of all those services.

Uh so uh we're gonna continue continue to sort of meet that requirement to get um the quality, the sort of state of good repair of our roadways up to SNUF.

Uh but it's this is um we'll get into it more in sort of the the capital hearing this afternoon, but this is sort of focusing on where uh you know the city as a public entity is required to provide um mobility and access for its residents, and this is where the operation sort of uh the investments and were maintained in that category.

So youth development and employment, so summer jobs, you know, it's it's the cornerstone sort of a flagship of the administration uh to fund nearly 11,000 students uh for the for the past two summers, and the plan is to continue to maintain that to during those those uh summer months where students aren't in school to be able to make sure that they uh um they have you know constructive um work that helps them you know grow as uh residents and being contributors to uh Boston in the future.

Um it maintains that yet guarantee that every BPS student uh will have access to a summer job.

One one of the things that sort of over the last few years where um in there was movement with youth jobs is move into the worker empowerment cabinet, uh some of the programs that were uh focused on youth development that may have sat in the uh uh youth employment and opportunity program has sort of been dispersed into the human services category uh cabinet, and it's to create a more diverse stable funding structure, including uh opportunities sort of uh move uh those resources for youth sort of uh enrichment.

Um public health and safety.

So the goal is to keep Boston the safest major city in America.

So I think we all everybody when they first think of a city.

The one of the first questions is it a safe city?

How will my experience be when I come to the city?

And it I think Boston does benefit from that uh reputation uh borne out in in data that it is a safe, one of the safest major cities in America.

So uh we're very very proud that we this budget uh maintains uh replacement classes so and um uh the cadet program for all three sort of public safety uh agencies for for EMS, for fire, for police to both uh develop um uh youth uh Boston area youth to uh to be ready as a pipeline for recruit classes as they as they come online, and the goal is to maintain those staffing levels.

Uh so uh we're we're maintaining service levels even though we've made some of these uh targeted reductions in civilians, but uh we're we're also funding has been preserved for alternative response capacity, including program to address the underlying you know trauma and mental health issues, uh family instability that often uh have uh police uh connection.

And then sort of uh there is this sort of public health-centered approach to community safety.

The community safety uh program has now been fully deployed from the human services cabinet into the public health commission as sort of a uh public health-centered approach to addressing community violence and um uh in areas of community safety generally.

And then moving into human services.

Uh again, another uh point of pride is the preservation of services for that are universally um received across the city uh in every neighborhood, uh, maintaining those evening and weekend hours at the library that have been rolled out over the last uh uh few years, and um as well as maintaining uh operability at BCOF centers in classes for English language that will be uh taught at the the Boston Public Library.

Uh we'll continue to support older residents.

Uh and uh there's a note made uh that there was able to secure a million-dollar Fed um year mark to support transportation services for uh helping older residents move around the city, and then of course uh veteran services uh will continue to maintain that uh need-based sort of program to support our veterans.

And this is uh the last slide, uh sort of talking about two huge uh public policy areas that uh that the budget will continue to support, uh, which is the Boston public schools uh with a focus on inclusive education, uh high quality instructional materials, multilingual uh programming, uh, and expanded college and career pathways uh in in maintaining a teacher uh teacher to student ratio of one to ten.

Um so that that is that is a key uh component of the the delivery of of the budget is to maintain that commitment to uh public education.

And on the housing uh sorry, although the annual operating budget isn't the exclusive source of of revenue for um the housing program, uh they do have the benefit of housing trust, IDP, uh CPA and other other programs supportive, but we will continue have continued to support um through the annual operating budget a program supporting homeownership assistance, supportive housing, state uh tennis stabilization, and and the housing voucher, which is a partnership with uh the Boston Housing Authority.

With that, uh thank you.

And I mean for questions.

Okay.

Thank you very much.

Uh uh we uh we have been joined by Councillor Pepin, Councillor Louis Jen, Councilor Culpepper, Council Orell, and Councillor Fitzgerald, uh uh by your the SASH, Councillor Culpepper looks like you attended a hundredth birthday party.

Well, to me.

Today's the hundredth.

Oh, today's your hundredth day, okay.

Well, great.

Uh congratulations.

And uh extra time today.

Uh we're putting that to a vote, and uh it seems like it's been rejected.

Well, okay, it's um yeah.

Um probably uh okay, so I do want to end all of my colleagues for my enjoy being with the council.

And so the hundredth day to me, I hadn't planned anything, the staff planned all this stuff.

But I really want to thank all of you for all the support that you've given me and the way you've really embraced me like a brother and part of the council family.

So just appreciate all of you.

I just wanted to let you know that uh it's not what I thought it was.

It's even better than what I thought it was.

I just want to thank all of you for your support.

Don't stop supporting me the way you have.

You set a standard.

Thank you.

Okay.

When you when you disagree with me, I'm gonna say, but you said this was better than you thought it was.

Uh okay.

So we're we're gonna go uh because we've got a full house, uh, six minutes, uh you know, um, and then obviously there'll be second a second round, maybe third if if we need it.

So uh Councillor Murphy, you're up uh first.

Yes, thank you.

Um thank you for the presentation.

Um I do just want to make one statement, like a core fact belief when we talk about not cutting city jobs that teaches empowers our city employees.

And so I just want to make that clarification.

I know it's a different budget and it's gonna take a different vote, but we can't not look at our teachers and parents and staff who show up, and we know there's hundreds of actual bodies, you know, people who are in front of children who will be cut.

So just wanted to say that.

Um I don't know if you noticed I stepped out.

Um my mom called, so of course I took it thinking it was important, and it was important, but it tied directly into, and I had no idea this is what she was calling about.

But I was asking, because I did send an email off to Age Strong yesterday after receiving some concerned emails and calls from organizations that are providing services through some of the grants that I guess are cut, but want to know all grants across all departments that are being reduced or eliminated in a list of all of the organizations that will be impacted, but also a list of all of the organizations whose funding will remain level or increase if I could get that.

Um what my mom called for is Monday night.

Um but what my mom called for is Monday night, she has been going to chess club at the Lowell Mills Library, and she was calling on behalf of her and her chess club friends to try to advocate because they were told last night that they were no longer funding that.

And I'm not sure I will call David after this to check in.

But is this you know gonna be the continued calls we're getting from you know neighbors, in my case, my mom and her chess friends, you know, when we're providing these services, they really are lifelines, right?

So someone might argue, well, it's just chess, but for that group of people, and when I got, I think I'm at seven emails now from kids, um, youth students call them what we want, but that have found out yesterday that their you know year-long job is no longer there, so they're losing their employment.

And so these impacts we're gonna continue to be hearing and fielding on our end.

So we'd like to just get an overall list.

And it does tie into like in my opening statement to what were departments asked, what did they decide?

So, and I think it's very important, especially that we have an amendment process.

So I in no way want to start pulling from departments to try to fund something that feels good and I feel should be funded, if then we're seeing that that department is already being impacted.

My first three four years through the amendment process, we were in a much different situation, and we had funding and we were providing services that otherwise never would have been able to grant you know hundreds of thousands of dollars to sm you know small businesses to get up and running no longer loans but money grants for down payments for houses, all great things that were helping individual residents, but that that's just not in this budget.

So I think it's important that we have that list of information.

Um 20.4 million dollar decrease in the city budget.

Is that including discretionary grant cuts or is that separate?

So that is part of it, and how much is the grant cuts?

The uh grant grant reductions in this budget represent about 12 million dollars compared to FY26.

So the eight million difference, 8.4 million, what is that look like across departments?

Yeah, it's really varied.

Um it's a combination of increased assumptions around salary savings.

So assuming that departments will continue to delay or not hire and not be able to fill.

Um it's also other types of discretionary reductions, materials and supplies, travel, food, um, bringing contracted services down to like actual spending levels, so it's a big mix.

Okay, kind of like the letter that was sent out about this year's budget shortfall that's continued into next year, those expectations.

Um could you just speak a little bit more about positions that haven't been filled historically or departments who had open positions if they're being eliminated and what we're calling that?

Uh yes, so there is an assumption in this budget that uh a number of long-term vacant positions have been eliminated.

Um those are vacancies that we have taken out of the budget.

Um, and then in terms of um do we have a number of how many there are?

I want to say there's maybe 50 long-term vacants that were can you share that if you haven't already about exactly which departments and what positions they were coded as?

Oh, yes.

Sorry, you were gonna I just want to make sure and then I was just gonna add to um in addition to removing long-term vacants, like I said, we also made some assumptions around increasing the amount of salary savings and departmental budgets to assume you know we're not taking the position away, but you you know, limit the amount of money available for it.

Yes.

When you in one of the slides, you described that for youth development was previously managed under Office of Youth Employment, and it's been moved to other cabinets.

Could you explain which cabinets now and if there's more than one that they've been put under and how that's been a cost saving?

Well, I I I think um some of uh I think the OER program generally used to exist under uh in a different form uh in um Hawaii O as it was at different names over the years, uh but it is now in human services.

So I think a lot of sort of youth uh supports are across human services uh and worker empowerment through the youth employment program.

Yeah.

Oh, I thank you.

My time's up.

Okay.

Thank you.

Before before we move on, in terms of um the grant recipients, the programs that are not being funded next year.

Can you just press a button and produce a report like that?

Uh because I I I think we'd all benefit.

Yes, we can we can certainly do that.

And just a reminder, I mean, these are all competitive processes, so we can you know provide organizations that have received it in the past, but of course they're all competitive and um you know not guaranteed for certain groups in the future.

Okay.

Um okay.

Uh it's uh council president Braden.

Thank you.

Um good morning.

Um the one thing given the geopolitical situation, um, have we factored in uh increases in energy costs into the budget?

Yeah, energy has gone up.

Uh we probably uh might have been uh working on that prior to some of the most recent geopolitical activities, but uh so it probably it's on if in a citywide total utilities are up like two million dollars um year over year.

Uh but you know you're right, it's it's sort of uh we see what the the price of uh a barrel of oil is, so we we can expect that to permeate into the departmental budgets.

Um I also you know I I share my colleagues' concern about the grants.

Um it'd be really nice to know how get a chart with what grants are um are being uh it's across the board cuts, but you know, are we cutting programs that are support for programs that in other normal circumstances the city would have to provide, so that's always a concern.

Um and then just thinking about revenue sources.

I'm curious um what sort of an impact does the uh re revenue from marijuana like it was always touted touted as a big uh source of revenue for the city, but how how how's that going?

Um so we collect around three and I want to say three and a half ish million from that every year if I'm looking at this correctly.

Um and the FY27 budget assumes a similar level um of collection.

Thank you.

And then um I think I I don't I'll speak for myself but not for my colleagues in this.

But I I I think it's a big concern to me that uh I know we'll be talking about the school budget later in the week, but that the cost of uh running central office, um, the budget for central office exceeds the um budget for schools and classroom services.

Um and I really just from my cursory look at all the layers of bureaucracy in the central office, uh like there's deputy superintendents and there's a whole line of and I really would like to see the same level of scrutiny of all of those positions and whether they're necessary.

Like when we're taking t teachers and class away from classrooms and power is away from classrooms, then we really have to sort of sharpen our focus and make sure that we're not um shortchanging uh the cer this there's sort of the coal face services at this in the classroom uh and protecting jobs and in a in a sort of what some would call a bloated bureaucracy.

So I'd really like to see like detailed dog charts of the BPS central office and figure out um you know their their budget goes up year on year on year and it's it's and the school population is declining.

So again, I think it's time to really take a sharp look at at what's going on there.

Um and then you uh the in terms of expenditure for charter school expenditure reimbursement and assessment, um do we get fully reimbursed for the services that we from you know from the assessment and I I really figure it can really not clear on how all that works because it seems like we're being we're we're not getting fair return on our investment.

It it's it's transitional uh funding, so it doesn't the the reimbursement does not um sort of cover the full assessment that we get charged, but it sort of um but we uh one of the uh commitments is that uh through the Student Opportunity Act legislation statements that they would maintain what they consider sort of full funding for the for the program.

Um in terms of you know, years ago um we used to panic when our um the revenue the the school the city budget was 53 percent was pretty was covered by uh real estate taxes.

Now it's 73 percent something.

Um what what drove the decline in in state aid?

Like I'm just trying to get like what's happened that that the state aid went down so dramatically that left us like I think we're puts us all all municipalities across the state are in the same set of votes as we are.

Yeah, I think the uh common understanding is that it never quite recovered from the reductions it took during the Great Recession.

Um so it was cut significantly in in those years and just hasn't recovered back up to that kind of overall share of the budget.

Yeah, even though the state was g giving money back to people.

Um look into the the the politics of that.

Um then just as uh the summer the the the school this the youth jobs program I think we fought very hard to get run year-run jobs for some you know for as a proportion of our students.

Um is the is the knock-on effect isn't is there gonna be a negative consequence for families who lose income because many of these families it's not uh it's not pocket money, it's contributing to the household income.

Um is there an have we thought about the knock-on effect of for taking away youth uh year-round youth jobs?

Yeah, and I think to to mitigate any impacts, there's discussions about ways we can supplement or you know, backfill some of the loss of those funds on the city side with uh uh private philanthropy, so there is kind of ongoing discussions about how we might be able to restore some of that, supplement some of that so that we mitigate any negative consequences like the ones you're describing.

Okay, good.

Thank you.

My time's up.

Thank you.

Uh okay.

Yeah, thank you very much.

Uh Councillor Flynn.

Thank you, Mr.

Chair.

And Jim, you mentioned when you started that there would be no cuts to uh Boston, Boston employees, but there will be cuts to employees in the in the school department for teachers, is that accurate?

I I know there are pol position eliminations at BPS.

Um I don't know what will sort of through the process will turn into a uh people losing their jobs, but outside of BPS, are there any um plans to eliminate jobs for city employees?

Uh layoffs, there are no layoffs in this in this on city side.

I'm just trying to do I was doing a little bit of research, but wasn't there some discussion that there would be positions eliminated in the public safety cabinet?

Civilians those would have been vacant positions.

We didn't eliminate any filled positions.

So you're just not filling them?

Yes.

Okay.

How many positions were those?

In the public safety department specifically.

Um we'll have to get back to you on that exact number.

Okay.

And how many over the last four years, how many new positions have the city um city brought on board?

Positions at City Hall.

Not not actually delivering basic city services, but at City Hall managers, our administrators are we'd probably have to follow up with that cut of the um information.

I don't have it at the off the top of our heads.

Is it 300?

I don't know off the top of my head.

Jim?

No, I don't know either.

Who would know that information?

We we would, but we just don't have it readily available.

So we'd have to follow up with that exact slicing of the information.

Okay.

I I thought it was 300, but maybe it's maybe it's less than that.

Um did we under restorate underestimate the amount of money we were spending on employee health care uh when?

In the current year or yeah, over the last year, over the last two years.

Um so historically, no.

Historically, we have under a underprojected the amount of spending um out of our health insurance trust fund, but as we've explained um over the last couple of months, starting in fiscal 25 is where our projections uh did not match reality because we were seeing high cost claims that are sort of unpredictable and can come and hit the trust fund at any time.

Um a much higher increase in the usage of GLP ones and then just greater health care costs in general.

Um so that was in fiscal 25.

Uh we're seeing a similar trend in fiscal 27 or 26, and um as a result, that is why we're increasing health insurance costs so significantly in this budget too.

But on the on the GLP one, we didn't necessarily see that becoming a major spending um in in the budget.

It started to emerge as a problem for us, and we've been reflecting that over the last couple of years.

Okay.

I I asked for some information on the month to month spending on that particular drug for city employees.

Are we still able to get that?

Yes, and I think we've shared the information that you requested.

Um so that that should be with you.

Okay.

Um so how much are we spending now on GLP one for city employees?

So if you just give me one second to look here.

I sorry.

So uh GLP ones um we divide it between those who are using it for diabetes purposes and those who are using it for weight loss purposes.

So in FY uh sorry, excuse me, in calendar year 2025, we spent just under 48 million dollars um on GLP one medications for both categories of um users, and then uh FY2026 year to date, um, which I sorry, I'm not sure what month it's through.

We've spent 16.1 million.

Oh, uh to date, okay.

Yes.

For 2026 of uh so that's that's a significant will be a significant increase wanted in our budget.

Yes, and um the uh utilization management plan design change that we implement or adopted with our union partners to go into effect at the beginning of um FY27 will hopefully moderate that growth a little bit, but um it's still covered in our plans um so we'll continue to represent a large share of their our health care costs going forward.

Okay.

Um I I highlighted at the beginning my my plan that was supported by the city council, a blue ribbon commission to get the economy working again um getting back on track.

Um is there any update on that blue ribbon commission that I proposed where we work with businesses to bring um bring a more pro-business attitude to city government?

Um I'm not aware of any discussions on that particular proposal, but I will say um the administration and others in the on the team are regularly speaking to the business community and trying to find ways to revitalize downtown um and other methods.

So I'm not sure about the specifics of the commission, but I know that is a could focus.

Could we check um Jim?

Could you check to see if we're able to um implement that blue ribbon commission?

I think it's important it was supported twice by the city council.

It's important we get the economy back on track, supporting our businesses, welcoming businesses, but Boston's open for business and uh maybe getting away from some of the previous policies that have hurt us over the last several years.

Um Mr.

Chair, thank you.

Thank you very much.

Uh Councilor Dricken, you're up next week.

Thank you so much, uh, Counselor Weber, and Chair, I should say.

Um so my first question is how would you characterize the financial situation we are in as a city right now?

Um I would say it's strong but constrained and requires us to make difficult choices to live within those constraints.

And I think what I've heard today from my colleagues that have gone before me is that we are headed for a tough process because people want a balanced budget.

We obviously are legally obligated to do a balanced budget and they want cuts, but then when those cuts become apparent, when the programs that we have to cut become apparent, they're like, but not there.

Let's not cut there.

So this project process will not be easy.

Um I'm sure that we'll hear from constituents regarding the grant money that um we are limiting this year.

Um I do want to ask a question about cutting long-term vacancies, because that's not really in a way it's not a budget cut because that money was not spent last year.

So can you talk a little bit and give us some more details about what that what that means?

And obviously, not seeking to hire those people is a great thing because those jobs have been vacant.

Um, but in in a way, the city found a way to spend that money in another way because they probably they likely moved um that money from staff to contractual services last year.

So can we talk about what that looks like?

And obviously um, and just putting a little bit of a pin on you know what are actual cuts and what are sort of look like cuts but aren't necessarily um going to change the budget very much.

Yeah, so uh with the so personnel budgets the the uh you'll see even the department history table for every single we didn't get our budget books this year, but people look at it online.

Yep, exactly.

Uh is um a function of um both elimination of vacant positions uh but also an adjustment in salary savings to be more accurate in sort of the assumptions on hiring.

And we're we're we're meeting with departments regularly to get a more detailed approach to hiring, uh so they prioritize the most critical positions first.

Uh so it does result in um uh year over year budget reduction with the both the elimination of vacant positions and uh in the adjustment to salary savings uh up.

So would you characterize the 1.3 cut across departments percent cut across departments?

Would you characterize that?

Or I think that's the average.

Would you characterize that as giving those departments less flexibility given that they can't you know move from personnel to contractual services?

Exactly.

Yeah, okay.

Um, and it's it's only my third budget, so or I guess yeah, it's my only my third budget.

So um I I also just want to ask, sort of in general, because this is our first budget hearing, what are the core trade-offs that were made in this budget, and how would you characterize those?

I would say it was really a balance between preserving those core city services, so trash pickup, library hours, community center hours, those types of basic um things that residents count on, um, and wanting to preserve filled positions with you know these other discretionary things that we've either added over the last few years, um, so it it really became unfortunately a trade-off amongst those types of choices.

And I know I as the former chair of the COVID-19 recovery ARPA committee, um I'm curious what if there were any previously funded ARPA programs that are now funded through this year's operating budget.

Um none that were newly brought into the operating budget this year.

I'm not aware of any that we have brought in.

Um, as you know, those were intended to exist one time, only you know, live as long as the ARPA funds uh were in place, those are winding down, and we uh in this budget have not assumed any of those continuing on the operating budget.

And given that the operating budget um is both constrained and mostly funded by property taxes.

Um I'm curious, um, you know, as someone who has really been a champion for trying to figure out how we can get our city to grow at a scale that we need.

Obviously, this year we are uh for the first time in 10 years.

Um this is the this is the um that fiscal year 27 is 54 percent below the 10 year average.

I'm curious how much of this is driven by fewer permits, market conditions, and or conservative forecasting.

How much how much of the overall growth is driven by the balance between whether this is a balance between conservative revenue forecasting versus economic conditions?

I feel like it's maybe a little bit of both.

Um, you know, certainly we're seeing the revenue um in the current fiscal year be somewhat constrained as well in the in the letter I shared with you all in February, it's still above target, but modestly at 13.1%, and some of the bigger drivers of that is you know the fact that permits and licenses are are not you know, at the volume of those is lower, so we're reflecting that also in our 27 forecast as well.

And I'm not gonna ask you to weigh in.

Um I filed recently, filed um, you know, a 35-page amendment to the zoning code to eliminate parking minimums for new residential development.

I'm not gonna ask you to weigh in on that proposal, but I I think it's really important in this moment to be talking about how we can get projects off the ground.

Um I think any bit of new property taxes are going to help us meet the need of uh of the moment, and um I think that we really I know I know that we're headed towards a long budget process, so I will yield back to the chair and grateful.

Thank you for the extra time.

Okay, thank you very much, Councillor Pipin.

Thank you.

Thank you, Mr.

Chair, and good morning, everyone.

Thank you so much to the both of you for being here, and I know that's gonna be um fun next six weeks for all of us with all the hearings coming up, but I wanted to dive right into some very specific questions on some areas that I have um priorities in, especially and also for my district.

There's been a position that I've been advocating for for quite some time.

It was started under the ARPA funding, but it has placed such an instrumental role into safe schools, safe streets are near our schools.

It's the safe route to school planner position.

I would like to know and what are the plans for that position.

I know that the I believe I was told last year that it was going to make permanent either this year or next next fiscal year.

I just I wouldn't, I would love an update.

So I really want to advocate for that and wanted to ask, do you guys have any update on that or are aware of it becoming permanent?

No, beyond that uh the ARPA funds carry through midway through FY27, and uh I know that uh the streets cabinets are evaluating um situations where if you know if they have vacancies within their department or to to meet to meet that sort of service uh requirement.

So consider this my ask to the streets cabinet and to you all to make sure that um by next fiscal year that there is plans to keep it there and to I have other plans for for for BTD, so I'll make sure to talk to them specifically about that planner in specific and that position and the importance of that role.

So thank you for that.

And then Jim, in the in the spirit of the streets cabinet, too.

I know that you mentioned that sometimes, especially for for road paving or or or fixing in general, they are allocated money from the capital budget, but sometimes operating budget is used for that.

Can you explain to me the difference between the two and and and how does the city go around fixing roads with those?

Great, great question.

It's sort of mostly centers around the scale of the of the fix.

Uh so um you know, springtime, the the frost sort of finally settles, and um public works is out filling potholes with coal patch.

That's an operating miscellaneous supply um out there with labor, you know, city workforce filling the potholes.

Uh then there are sort of uh uh paving contractors who come through and excavate the road and pave uh additionally.

That's typically with capital dollars either through on dollars or through uh what they call chapter 90 dollars, which is a state allocation for uh local road maintenance.

So that's probably the it's the scale of the improvement.

Okay.

So like on the operating budget, would that just be listed under like materials or projects or something, Mr.

Yeah, yes.

So for for our um the operational budget, it would be the employees, so it would be the craftspeople or the laborers who are involved in the work.

They're they're on the permanent employee line, and then there's miscellaneous supplies where they're buying coal patch, uh probably tools, things of that nature.

But uh, but that's that's how it presents itself in the operating budget.

I appreciate that.

Um, just because I know I bother public works quite a bit with um filling potholes across my district.

Um I also wanted to advocate for the Boston Public Libraries um employees over at the Rosno branch of the library.

I was able to have a meeting with the with the community board and and members of that that support that library as well as one of them what I believe one of the most used libraries across the city, they have great support system, but they've they have noticed that they have fallen short in terms of staff.

They they they're very tight, and they were asking for the possibility of advocating for a extra librarian.

Obviously, I know what situation we are in, but I would just love to put that in there into your ears in case there's a possibility of making that happen in the near future.

And then um for I don't know if this is between BCYF and BPS, but I have two pools in the Mattapan area that um they are as of now operating and they're gonna be open, which are the Mildred pool, the Mildred Out Community Center pool, and then the Matahunt school pool.

I will love to make sure that the positions at those pools, both for maintenance, for lifeguards, for swim instructors, that they're set in place and that they won't be interrupted throughout the year because I I just know that since I've been here and before I got here, they've the timing of opening of the pools have been on and off.

And I just attended a Mattapan budget town hall meeting maybe two week and two weekends ago and that was one of the main major asks for the pools to just putting another plug-in for the support to those two pools.

Yeah.

But that's it for me.

I know that a lot of my colleagues answer some of the more broad general questions so I wanted to dive a little deeper into more specifics to my area.

But um I appreciate the work you do and I'll see you guys at the capital budget meeting.

Thank you.

Okay, thank you very much.

We've enjoyed my counselor Santana so uh next up is Councillor Louie Jen and Councillor Culpepper Council Aurel, Councillor Fitzgerald, and Counselor Santana, Counselor Louie Jen.

Thank you, Mr.

Chair, and thank you to the administration for being here.

I thank you for your work.

This is an incredibly difficult budget.

We find ourselves in a challenging fiscal time and we find a lot of cuts to things that we deeply care about.

I know for myself with the Office of Returning Citizens, the grants that they were able to give that was came on this council championing that and so we we're gonna have a lot of work to do and a lot to deliberate on but I um want to say that um when we had these conversations about um our budget and what we value they're not as many of you know as you know they're not in the abstract and so um I care deeply about making sure that we have the resources to uh maintain basic city services and also that we continue to partner with those who are helping us do the work of community safety um and helping to combat loneliness and so I I also think it's incumbent upon this body to to see the the the situations that we are in and for us to you know and we've asked it and I almost don't even want to ask the question anymore because it really takes a lot of political will and capital for us to do what is necessary to grow revenue and sometimes it may seem unpopular but there are things that we have to do as a city um to make sure that we're able to bring in necessary revenue to to fund what we care about.

When I first came on this body something I also talked about was our ability um I've I've been asking uh about our debt service and it looks like that in this year that we are finally uh changing debt service slightly if uh Jim I I think I was late and you talked about that but we could talk uh a little bit about debt service and uh how our approach to debt service has changed from this year from last year.

So in this upcoming budget we made an assumption around um just a refunding that we're planning to do in this spring um and a little bit of restructuring that we'll do as a result of that which allows us to recognize some savings in the next fiscal year.

We have made a modest adjustment to our debt service policy going forward and we'll talk about this this afternoon but um where we've slightly eased the rate of principal retirement previously we were extremely aggressive and we're still very aggressive extremely aggressive we're still being very aggressive but um easing that slightly um we've made no change to the overall debt limit that's seven percent but we've made um a modest adjustment to the uh principal retirement policy um what is the percentage of the operating budget that is debt service so uh I think in this budget it's around six percent which is a slight which is a slight decrease from last year uh what's it it was it was seven percent I don't know if we've I think we kind of moves around a lot as the budget rises and falls right so it's it's always a little bit of a a moving target I think we're you know I I you're probably right you probably looked this up before and remember the presentation from last year but I just remember this I've been asking this question yeah I mean it's it's kind of around it and then by the end of our you know current plan which again we'll talk we'll have a slide this afternoon that talks about it but we we get to that seven yeah um so but we've made no changes to that assumption so on the one hand um um and and the restructuring that you you stay that you were doing it's the less aggressive uh so the restructuring as it relates to the savings that appear in this budget are less associated with um that policy change but more we're doing a refunding of a previous um borrowing which which is normal yes which is normal and amortizing it over a slightly longer time so no longer a 20 year but it's still 20 years it's still 20 years yeah it's still 20 but without getting overly complicated the one of the refundings we're doing is related to a um short term direct placement borrowing that we did that was a I believe a 10 year so we're refunding it and then amortizing that debt over what it would have been had it been geo debt yeah um I think it's incredibly important that and I and I and I understand and I understand that it plays into our triple A bond rating and and I understand that but um I do believe that this it is an area where if we're if we're doing savings and if we were doing a readjustments we should be doing it to our debt service because even on a 20 year scale like you know I don't know if they do it on 25 but even 30 which is what with the basis on which regular people you know pay repay their mortgages the aggressiveness on uh with with which we what of our approach when we could be using the money the from the 7% to the 6% which I think results in I think in this situation resulted in 13

Um, I think it's incredibly important that I understand, and I understand that it plays into our triple A bond rating, and and I understand that, but um, I do believe that this it is an area where what if we're if we're doing savings and if we are doing the readjustments, we should be doing it to our debt service because even on a 20-year scale, like you know, I don't know if they do it on 25, but even at 30, which is what with uh basis on which regular people you know pay repay their mortgages, the aggressiveness on uh with with which we what of our approach when we could be using the money the from the 7% to the 6%, which I think results in, I think in this situation resulted in 13 million dollars, you said the $13 million savings.

Um, but even if it's just one percent, if it's a change from seven percent of the operating budget to six percent, we're talking about 48 million dollars of worth of savings that we then could reallocate to um um to other expenditures.

So I just want it to continue to continue.

I don't want it, I would actually love to see that play out in a situation where we don't have sort of these constraints that you're talking about because I think it um I think it's it will be difficult to to see if causation, right?

Because I think the fear is always like what will this end up doing to sort of how we're viewed on the market?

Um, and I don't actually think that there's going there's a big impact because I think they're because of the strength of our property taxes and so on and so forth.

But um, I just want us to continue to look at that as a as a way for us to give ourselves more flexibility.

Um 20 seconds, and I want to ask about free cash and I want to ask about our reserves.

Um, how much do we have in free cash and how much do we have in reserves?

How much do we take from free cash last year in reserves?

So we have our overall unassigned fund balance um of 1.2 billion.

Um you took one 110 from that last year for me start big and then work our way down.

So that 1.2 billion is after we took the 110 for the accelerator fund.

And then the way it works is DOR basically takes your unassigned fund balance, runs it through their calculations, and then they identify of that amount how much is free and clear for you to be able to spend.

So we started with you know over a billion, they run it through their process.

We just had our free cash certified.

I believe it is 601 million, which is an increase from last year's free cash, which I think was 552 million.

So we're seeing our free cash um uh increase.

It's not always necessarily a function of like you have more money going in, you just have less um commitments against that fund balance, so you have more of that one point you know two billion available to spend.

Okay, and reserves.

So though that's kind of the that's kind of representative of what we kind of think of as our reserves.

Okay, great.

And so I will ask more questions hopefully this afternoon.

Thank you.

Okay, thank you very much.

Uh Counselor Culpepper, the six minutes just as a reminder.

Thank you, Mr.

Chair.

Uh good morning.

Good to see you again.

Happy 100 days.

Thank you.

Um couple of questions about I see the the interest is 40 million dollars.

Interest down from 26.

How much of a difference is that?

We're assuming so interest was budgeted at 80 million in this current fiscal year, and we're assuming it'll be 40 million next year, so a 50% reduction.

For next year, and how much was it in 26?

It was budgeted budgeted at 80, and it's on track to hit that amount this year.

Okay, so it's next year.

Who actually does handles all of our investment decisions?

What company?

So we have uh so our Treasury Department manages our investments.

Um so our cash is invested in in a couple of different places.

Um it's managed in-house.

Yes.

Okay.

And we make choices about investments in you know, treasuries and and and those things.

So that's that's all done internally in our treasury department.

And so when we look at the overall budget and we look at the cuts, I think you said there was 700 positions that were gonna be cut.

How how are the decisions made on what positions?

And I'm not talking about the vacant ones.

I'm talking about um let me let me give you an example.

So I've been clamoring about the peer housing director being hired.

That's a vacant position.

Would that be a position that's in these that are being cut?

And if not, how do you determine which ones are identified to be cut?

Or which ones have you decided not to hire someone for that goes into the cut?

Yeah, um, so I believe the fair housing director is actively being recruited for and going through the hiring process.

So I believe the fair housing director is actively being recruited for and going through the hiring process.

So that one is all set.

But generally speaking, um, when it comes to I'll I'll talk about it two different ways.

When it comes to a long-term vacant position, we'll look at a department and say, like, gosh, you haven't filled that position for five years, and eventually we say, okay, you're not going to, and we'll just remove that position from your budget.

As it relates to assumptions around positions you may have that are vacant that you want to hire for.

We I think like the way to think of it is like a menu.

You know, departments have a menu of positions that they can hire for, but you only have a certain amount of money.

So the choices about which positions you choose to fill with throughout the year is ultimately kind of a departmental decision based on how much budget you have available to you.

So we have some idea when we're putting the budget together, but ultimately departments will have that flexibility during the year.

Can can we get a breakdown of which positions that are being cut that were vacant and how for how long?

Yes, so we can I we we will certainly follow up on the long-term vacants that have been removed.

Um, and then in terms of kind of the salary savings, we can provide you with the overall amount of salary savings in departments, and then again, that's kind of like how much budget they have available to make choices within uh the positions they do have.

And that two percent cut that you asked all of the departments to make that's reflected in the cuts that we're seeing now.

In some cases, right?

Uh departments presented us options at the beginning, sometimes my team reminded me yesterday, right?

Like some departments entered in too much, right?

It's just it, you know, some of the things that we're gonna do.

I mean they cut more than two percent.

And it could have been an accident, they added an extra zero, right?

So we get sort of a baseline um set of information from departments, but then it's a you know, Jim's entire team spends the next couple of months going through it with them.

So in some cases, the the cuts that they have proposed, we took, in some cases we didn't, right?

It's a little, you know, it varies by department.

And so can you tell me what cuts would you have taken and what cuts would you have said not now?

What was that based on?

The cuts that you accepted, and the cuts that you said, well, not now, let's hold off till next year.

Yeah, I mean, I think generally anything that would have affected a core city service, uh filled position were things that we were you know were not interested in taking, so it was really you know what's discretionary and available and would not impact those basic city service levels.

And so we know that the black male advancement, they've been doing a great job.

Everyone's been uh excited about the work that they've been doing, especially when it touches communities, safest city uh in the country, um, but that's part of the work that they do and and the cut that they've had, this cut this year is quite a cut, and that's office that we need to be level funded.

What was the basis when you looked at those cuts that you made those cuts for an office like the black male advancement?

Yeah, so generally we uh you know, because we eliminated funding for a lot of discretionary grant programs, departments like blackmail advancement or other departments in that cabinet or in in the arts cabinet, for example, that's where a lot of those discretionary programs live.

Um, and so when you're making a choice to to remove funding for those types of programs, that impact manifests itself in a department like blackmail advancement more than the police department, for example.

And and you talked about the recruiting classes earlier and the different finishes question.

No, and you're for your hundredth day.

Tomorrow you can't.

So you you talked about the difference in these cuts when when you look at uh cabinet by cabinet breakdown of FTEs and fiscal seven and compare them to staffing levels over previous years, uh excluding BPS.

How did you come to the conclusion or the decision of the cuts that you made?

To staffing specifically or just in general?

In general.

So again, it was really a function of those core trade-offs where it's preserving city services, filled positions, um, and trying to you know fit within this constrained pot.

So, like I was just saying, certain departments have more discretionary funds available to them, whether it's through a grant program or or some other contracted service versus a personnel heavy department like the fire department.

So it's really kind of striking a balance between those components.

Mr.

Chair.

Was there my other questions until this afternoon?

Thank you.

Okay, yeah, I think we may have a second round uh for this panel.

Yeah.

But um so stick around if you can.

Uh Council Warrell.

Thank you, Chair.

Thank you for being here.

Um piggybacking off a council Culpepper's question.

Uh I know we a lot of smaller departments, you know, a big majority of their budget are grants, right?

Um so in the case that you know in their entire or let's say like 75 or 90 percent of their grant money was um removed.

Did they experience cuts on top of that?

Um I wish I had the numbers for you know uh let's say uh uh mayor's office of women advancement um where I believe there's a good chunk of their funding that were grants on top of that removal of grants, would they still cut otherwise?

Or any department, not just them specifically.

Yeah, I think it was a very holistic approach to sort of um budget reductions and sometimes uh what uh departments will offer offer off of things that probably you've seen in in the numbers you've seen from the status reports places there seeing recurring surpluses.

So there's a possibility that on top of the grant being polled, yep.

Okay, yep.

Um and then would you be able to provide a list of departments, you know, percentage-wise, that's have had the highest cuts?

Yes, we can provide uh reductions over or each percent change from last year by department.

Is that what you're looking for?

Yes, yep, okay.

Yep, that would work.

Um the other question I have is around the debt policy.

Um I love the fact that we're taking a look at you know, cost saving strategies that are not just you know um you know removing money from departments.

Um have we identified uh you said you say 13 million in savings um changing the debt policy to do one 10-year-old bond.

Is that possible um for have we identified more bonds that we can do this too?

And if so, how how many more can we explore this?

Yeah, so so we're we're anticipating um a refunding this spring that is uh um multiple um you know pre multiple issuances from the past.

This one in particular that I was just describing to Councillor Lugen, it was it was unique in that we had previously assumed that we had to pay it back over 10 years, but now we're stretching out that um amortization.

All of our other ones, excuse me, um would have the same amortization schedule.

So it was kind of just like this unique opportunity with this one particular bond.

Awesome.

Um but all of the refunding savings are assumed for all of the maturities that we're funding, yeah.

And have we ever explored if we were to um to Council Louie Jen's point um be less aggressive in our repayment plan and what cost savings that would be across all of our bonds?

Yes, so um as I was mentioning, we are we have updated our debt policy to um assume a slightly still aggressive but slightly less aggressive rate of retirement.

What was that change?

What was the difference in the um so I always get this wrong, but previously we had assumed that we would repay I should know this off the top of our own.

All right and then while you're doing that, um I know in previous years that there has been a delay in the police academy.

I can't remember what that savings was.

Do you have that?

Um yes, and I think in this budget we have assumed an academy beginning in the month of June.

Um so we have kind of put assumed some delay already in the police budget associated with um delaying the academy.

Got it.

And can you provide me with the cost of like what's that savings?

Yes, it's a yes, we can.

All right.

And then I know we talked about free cash, but to my understanding, there's a few more other reserves that that we do have on in the budget.

Um the stabilization or the reserve fund, the two and a half percent.

Um I think this is on page that trigger reserve, or is this the trigger?

Um I don't I don't think it is.

Um says the legally required reserve equal to two point five percent of prior year appropriations.

Usable for extra.

Yes, go ahead.

Okay, it's existed since um early eighties.

Okay.

We've never utilized it.

Um, is that if you do appropriate it does require you to appropriate from it that you need to then restore that reserve in the next tax rate or basically just trying to get an understanding of what the reserves are.

I say not after advocating to use it.

Um, and then there's one and it was one other catastrophic risk reserve.

Risk retention reserve.

Yes.

And what what is that currently at?

Uh I want to say that's a forty forty million ish, forty three million.

Okay.

And that is designed kind of as like uh insurance right, unexpected large losses, of course.

Yeah, high toductible insurance strategies.

Yeah.

Um, yes, do the chair.

Can we get a list and then the dollar amount for each one of those reserves?

Thank you.

Thanks.

Okay.

Thank you.

We're just gonna take a short uh five minute recess and come back.

Okay, we're back from recess.

Uh and counselor Fitzgerald, you're up.

Uh thank you, Chair.

Appreciate the time.

Panel, thank you very much for being with us today.

Um so just looking at some of these graphs uh overall, I'm looking at the the revenue growth, the biggest reductions that we had in revenue growth were, I guess you could say fortunately, but in the overall general fund revenue, the smallest pieces of the pie, the interest on investments, licensing uh licenses and permits, and departmental revenue all saw a reduction in growth.

However, they are the smallest pieces of the pie, so I I guess that is a good sign.

But uh a lot of my other questions, colleagues have asked a lot of the the larger questions, so I'm just sort of trying to focusing on the nickel and diming stuff here.

What is that interest in investment on?

What are what are those investments that we have and is there projections on those investments as to how they might uh not be a reduction in the future, but uh could we see growth there and what are some of those factors?

Yeah, so um that's all of our kind of cash that we have as a city.

Um is it the same as the certified free cash?

That's um the same cash.

Yes, yes, like the our free cash is like a a slice of our overall available funds.

Um so yes, we you know we take in lots of revenue as a city, we invest it.

Um we I you know we're making sure that we're never leaving money in our like checking account overnight so that we can invest it and and earn a return on cash.

So the treasury team is constantly sweeping our accounts and making sure they're invested um so that we can earn interest on any cash that we have on hand.

Um you know, they're in interest bearing accounts.

We have um I can follow up certainly with more detail, but we do um invest it in different interest bearing accounts uh at different rates.

Uh we get really good rates, and obviously the rates are higher when treasuries are uh you know the Fed funds rate is higher, and so we're assuming as that steps down, we have to assume that the rates we're getting on our cash are gonna also follow.

So that's where that reduction is coming from.

Gotcha.

Um do you have some examples?

I know we talked about or at least we've been hearing early on from some other departments and other folks out there that are potentially gonna be feeling some of these cuts uh about uh partnerships with other entities to sort of fill in the gap in the meantime to keep some existing uh things going or re-orgs that are happening.

I know BPS get a couple in some departments of a re-org, which sometimes you know I think of as as layoffs, but um it even within other departments.

Um can you give some examples of of some of those at the moment of where we're like, well, look, here's where something has gotta take a hit and it stinks that we're taking a hit there, but here's how we're trying to supplement it through a partnership or through a re-org.

Uh and just an maybe an example of each if you guys have it.

Yeah, so one that immediately comes to mind is um the partnership um around uh immigrant legal defense, right?

That was uh I think I think we just recently announced, and so that's a public-private partnership um that we're using um and we'll hopefully be able to leverage that going forward.

Um and then uh uh we uh partnered with I think Boston Foundation um around some of the food access as well.

So those are just a couple of opportunities that come to mind.

There's definitely a lot more, and it'll be a little bit of a process over the year to kind of match those opportunities to departments.

It's certainly not going to, nor should it backfill everything, but we we are very much with that in mind trying to find other ways to provide a service uh without a grant, whether that's backfilling through philanthropy or um finding other ways to you know deploy staff differently that can provide that service instead.

Gotcha.

And I imagine it's gotta be tough even the partners.

I'm sure everyone's going through sort of an economic struggle at the moment.

So to say, well, we'll just partner with so-and-so, um, I can't imagine they're saying we can backstop everything.

And we don't expect that that will be the case.

We weren't, you know, saying, oh, philanthropy will pick it all up, but there's certainly opportunities out there.

Um I noticed there's a reduction in public health.

Can you just is there any specifics around just as chair of the public health committee?

I just want to know what the reductions might be.

Yep.

So they um I I'd say probably the largest reduction is a result of the change we made in pension.

So we budget their pension contribution, BPHC's pension contribution in that budget.

And so um, similar to how we're seeing the pension savings on the city side, they're also feeling it in their appropriation.

So that's mostly the that's probably the largest part.

There's probably other things that are going up and down in there, but that is a big reason.

So in public health actually um has the ability to retain uh revenue, so from uh they have they have a portfolio of uh buildings that have uh administrative revenue and they also provide transports to uh um that they can both uh build um uh mass health or private insurance companies when when it's available.

So uh sometimes what is perceived as a budgetary cut is actually just them um sort of re-looking at their uh their revenue assumptions, and um so that that's part of like the overall reductions they did.

We did we did appeal to them to say, hey, can you look at some of those accounts to see if you can um and they they did come back with a suggestion that we took it?

Um great.

Um final question.

Um the the free cash that we have certified, you said it's up to 601 million this year.

So I I kind of look at that as like you said, it's not an increase, it's just more access to what we have there.

Yeah, a little bit of both more going in, but more access to it.

Yeah.

I believe Council Louis Gen asked this as well, and I just do, but I don't know if we got the full answer.

How much is it with even aside from just the certified free cash?

What is the total amount that is typically that is run through that process?

And then is that I just worry about some messaging there for for our constituents because it's like we got our credit ceiling raised almost, right?

Like, hey, you could only tap into 550, now you're up to 601 million the following year, but everyone else is seeing a decrease when we we have access to more money, it seems of free cash, but seeing a decrease elsewhere in people raising their taxes, and I could just see people taking that and saying, you know, you you guys you you just got access to more free money, but you're still charging us more.

Could you just explain sort of like the why that might not necessarily be the case, or if it is why it is?

Um I think I understand your question.

So I think I do too, I'm not sure.

So what goes into that is kind of what I was explaining, this kind of overall fund balance that we have as of you know the end of the year.

And then so that's uh our unassigned fund balance is just over 1.2 billion.

That's right.

That was the number.

Okay.

Yes.

And then uh we submit those financial and that financial information to DOR, they take a look at our balance sheet, tell us what's available out of that, and that's what is the free cash number.

Right.

Did I get is that your was that your question?

No, it was, but also just sort of the being able to raise uh getting more access to more money while we're taxing people more at the same time.

Well, and then uh yeah, an important thing about free cash too is it is a one-time resource, right?

Whereas our you know our property tax base is the and you know fuels the the whole city budget.

Um and so we maximize our property tax levy, those increase every year, they've consistently increased every year.

Whereas if we were to, you know, despite having greater access to funds, if we use that to supplement ongoing operations in the city, we don't it's gone, right?

You use it and it's gone.

Understood.

Uh thank you very much, Chair.

I appreciate the time.

Okay.

Uh thank you.

Uh Counselor Santana.

Good morning.

Thank you, Mr.

Chair.

Um, and thank you, um, Chief and Director for being here with us.

Um I'm sorry I'm coming in late um to this morning's hearing.

Um, but I actually just want to start right where Council Fitzro left off.

And I'm I'm sorry if you've repeated this.

Um so I mean the the 601 million dollar of uh of our reserved money, why uh as it uh has someone already asked, like why can't we use that money right now for some of the cuts that we're seeing?

So we could make a choice to do that.

Um we deliberately in this budget chose not to do that because of uh a lot of the dynamic I was just explaining to counselor Fitzgerald.

It is not a great, you know, it's not fiscally responsible to plug ongoing operations with one-time funds, and so we were able in this budget to align spending with our ongoing revenue so that we're not creating a situation where, like I was saying, if that money's gone next year we just make a bigger problem for ourselves with those ongoing costs.

Okay.

Um and can you give an example of when the reserves has been used over the last five to ten years or so most uh recently we utilized 110 million dollars of free cash to fund the housing accelerator fund?

Um that was last January, so that was the most recent use of free cash.

Um it's been used in the past to deal with um shortfalls.

Um so we typically in every budget we assume that we will use 40 million of it to fund our 40 million dollar OPEB contribution.

And some years our revenue surplus uh is significant enough that we don't actually then need to utilize the free cash.

We can cover that OPEB contribution with recurring revenue.

Um, but some years it's you know, it just depends on kind of what revenues doing.

So that's typically how we utilize it during year, and then the housing accelerator fund was a unique use.

I love the housing fund.

So um no complaints there.

Um, one more question on on just this in general.

Um actually it's just I actually just forgot my question for that.

So I mean, I know this is I mean, it's a tough year.

Um, I know cuts had to be made.

I think there's a few areas in this budget where I'm you know, I think disappointed to see um sort of reductions.

I mean, uh since Friday, I don't know, Friday afternoon.

I think many of our nonprofits and organizations received communications about not receiving funding, and since then I've received a lot of communication from those um from those organizations.

And I know um chief, you mentioned preserving city services was uh um a top priority, right?

I think in my perspective, a lot of these nonprofits and organizations are our are city services, and I think um you know we we I really want our um my colleagues and I to come together on how do we um manage that while moving forward.

Before I hit you know summer jobs and year-round jobs, I actually do remember my question.

Does the count for that for the the 601 million dollars does the council have any oversight on like I know we're able to make changes of um uh you know reallocating money from department to department?

Do we have any oversight on uh on tapping into the reserves?

Um, so not as part of the budget process.

I believe the limitations of the um charter amendment only extend to um reallocating within expenditures and not increasing the bottom line of the budget.

Um so I I think it extends just to the expenditures in this process.

Right, thank you for clarifying that.

So I mean, I was very happy to see I've been big on youth.

Um in our meetings.

I have you know, we I've always mentioned our youth.

Um, I was very happy to see over the last few years under this administration, um, summer jobs has been uncapped, meaning no matter anyone who any BPS kid who wants a job, we will get them a job, and our office has been um you know, we we try to get that out to to youth and really really want to make sure that our youth get jobs for year-round jobs though.

Uh, we see that reduction, and I know there's been communication of you know, I think there's gonna be fundraising that's going on that's gonna be going on in partnership with PIC.

Um, I'm really concerned about the year-round jobs.

I mean, when we're talking about public safety um being the safest major city, um, I think it's no, and I think our mayor has had it too.

It's no coincidence that while we're seeing um that that we're we've invested in summer and year-round jobs more than any other time um in the history of Boston.

I think they go um, you know, the year-round jobs I employ 20 in my office um during the year, right?

And um that that time period between after school, whether it's two, three, four p.m.

and then when you're getting home seven, eight, nine p.m.

There's so many variables that can happen there.

Um, so I'm I'm really concerned about the year-round jobs.

Uh how much reduction do we see there specifically?

Um, and what do you all assume the impact will be?

Um, so I think the overall reduction associated with that program is five million dollars.

Um as you mentioned, you know, there's uh a lot of intentional work that's going into trying to create partnerships to augment or you know, mitigate that uh any potential negative impacts that might come from that program being reduced.

So are we trying to fundraise the the five million dollars or um I believe there are conversations happening with other folks in the administration and external um to try and supplement that.

Okay.

Um I know my time is up, but this is gonna be an area um uh with with the grants, but year-round jobs is gonna be an area I'm definitely gonna be advocating for.

I think it's just so critical, and I think right now more than ever our youth should not be um the ones who have to um you know sacrifice um during this time right now, and I think year around jobs are so critical.

I know many of them may like I know myself personally, I've benefited from somewhere and air around jobs that I know many of my colleagues have as well.

So um that's gonna be an area of what I'm definitely gonna be advocating for and working with the partners that you you mentioned.

Um thank you, Mr.

Chair.

Okay, thank you very much.

Um just give my we'll we'll do a second round uh but um gonna give myself a couple minutes.

Um so just I getting to Councillor Culpepper's questions.

I don't know if you answered this, but is there a definition of what a long-term vacancy is?

Did you have uh like a um it it's it's basically uh a position that's been open more than a year, but we've we've found situations where it's been longer than that.

Um so it we when there's a position open longer than a year, then we've we're looking to just cut that position.

Is that right?

Correct.

We we work with the department to to understand the context around that vacancy.

Uh some sometimes it's it could be the labor market, sometimes it could be some other issue with why it's been vacant.

Were there discussions with departments about you know like fit for instance the Office of Fair Housing?

Um, you know, like okay, we're in the process of filling that position or uh Yes, yeah.

Okay.

Um and then I guess so we have uh reported deficits this year uh and and how were those deficits um how did those deficits impact the planning for next year?

Um so I'll take them, there's kind of three main ones, health insurance being um a big one.

So you see that reflected in that being pretty much the the thing that this budget is buying us is the uh increase in employer contributions to health insurance.

So we think we are, you know, to uh the best of our understanding, appropriately budgeting for projected expenses, um, fixing any structural issues uh on the BPS side that are resulting in health insurance shortfalls, um, and then rebuilding the trust fund.

Um so we've we've addressed that, and that's why that is such a large driver in this budget.

Um on the public safety side, um you won't necessarily see it reflected in the operating budget because I think uh the overtime um account in police and fire are relatively stable.

That's a really a function of um the unions having our or at least the BPPA having an open contract in that year, so there's no sort of assumed COLA increase in that.

Um but separately we continue to work with uh BPD and FIRE on management initiatives to limit overtime.

Um then as it relates to snow, that is also relatively level funded.

Um but we are not utilizing free cash or reserves in this budget to plug ongoing operations, so we're sort of preserving that flexibility into next year should we have another you know over budget snow situation.

Okay, and so uh you're we should not expect to have the same kinds of deficits next year's budget.

It is not our intention.

We have we have budgeted um you know to avoid that, yes.

Okay.

Uh and I guess what what what should we conclude if we do have a similar situation that like where that costs are going up too fast, like that we've made a mistake.

Uh I don't want to predict um anything can happen, right?

I don't think when we were here in the seat last year, we expected two historically large snow snowstorms.

So, but it just speaks to um making sure that we stay in a strong financial position so that we can respond to unforeseen issues as they arise.

Okay, and just generally so in revenues and calculating the revenues.

I mean, like what's what's your philosophy uh and then how does it differ from other cities and what impact does that have overall?

Yes, so um um we it's carefully uh called revenue estimates uh that support um expenditure, you know, the the expected expenditures.

It's not a uh real, we don't call it a projection, we don't call it even a budget, we call it an estimate of revenue that supports uh the annual appropriation.

Um the goal is to have a level of uh conservatism to absorb these uh situations where there are uh three or four appropriations that are are allowed are legally allowed to exceed their appropriation, you know, the public safety, snow and judgments and settlements or execution of courts.

Um so you want to make sure that you have sufficient revenues to catch that.

And and uh to your to your point about like did we sort of we we've sort of looked uh excruciatingly at health insurance in some of those patterns and the lagging um uh reporting of like claims activities, uh it it it sort of emerged sort of um sort of in the last quarter of last year.

So it was it was sort of we were doing it based on the best information we had at the time, setting rates for FY26.

Right um and then SNO we spent a lot of times with the street cabinet, we've already had two meetings to sort of understand the dynamics of what's going on in Snow.

Is it is uh you know, and they'll they'll talk about like an FY25 was a year over year contract change, so 18% change in contractor rates, diff uh we're saying are you.

Well, in terms of revenue, when we're when we're projecting our revenue or estimating a revenue.

Right.

I mean it seems like like you know, for interests on on investments and other things we're you're usually above at the end of the year on our projections, like why is that the case?

Uh do I mean and and how does I mean if we have to if we our projections are conservative, but then we have to have layoffs, like how does that uh factor in?

Does that change how you look at the project the revenues for the next year?

In terms of some of the um the the surpluses we've seen is we've had this benefit of uh uh sort of a fairly significant uh new growth environment, you know, with so we've had uh but it's starting to moderate, I think.

That that's so new new growth was um just about 18 million dollars over uh the budget estimates was very it's narrowing uh the the growth there.

So uh I guess in theory we we are by definition becoming ha have been a little bit less conservative and we want to make sure that we're we have that capacity to withstand because uh this you know FY26 is probably the is we haven't had to do like a like a to uh do a supplemental appropriation to cure a deficit for a long long time.

So okay, well that that's my time.

So uh we're gonna have a second round.

We're gonna go to public testimony.

I think we've got two.

Well, we've got one in person, no one online.

The one online.

Okay, so there we've got two people, so uh two minutes each.

Uh first so we have here Greg Maynard in person, and then whose uh okay.

Are you ready?

Yep.

Okay.

All right, thank you.

Excuse me.

My name is Gregory Maynard, and I am the co-founder and executive director of the Boston Policy Institute.

Uh, there are two major issues that are covered in this hearing and that need their own standalone budget hearings.

Revenue forecasts and health care costs.

Boston's been having a public debate about revenue for years, and now it needs a standalone budget hearing on the revenue forecast in FY27.

In 2024 and 2025, Mayor Wu and her senior budget officials loudly and publicly rejected warnings that falling office values and the end of Boston's office building boom would cause a fiscal crisis.

Back in October 2024, Chief Assessor Nick Aronello at a Boston City Council hearing said, quote, they created a budget crisis out of whole cloth that was fiction.

As we see now, Boston's budget crisis is not a fiction.

Uh Boston lost more than four billion dollars in assessed value from commercial properties in FY25 and FY26.

In CFO Groffenberger's March 30 letter describing City Hall's half of the hundred million dollar current year deficit, she revealed that Boston expected to collect 7.3 million dollars less in permits and licensing than forecast in the FY26 budget.

The FY27 budget book shows revenue growing slowly or falling in category after category.

This is a major change from the pre-COVID status quo, and to understand what is happening requires a standalone hearing with either the finance department or on revenue specifically.

The other major operating budget issue that needs a standalone budget hearing is health care spending.

Boston underestimated health insurance costs in FY26, which helped create the hundred million dollar current year deficit in FY27.

Health care costs have been a moving target.

On March 25, the day the school committee voted on BPS's FY27 budget, the health insurance line item was raised 14 million dollars, bringing the line items year over year increase to 49 million dollars.

It is unclear how much of Boston's total 98 million dollar increase in health insurance spending came from this last minute addition.

All this raises a question.

What is happening with Boston's health care spending?

Unfortunately, a hearing to answer that question with either the people operations cabinet or on health care spending specifically is not currently scheduled.

Beyond health care spending, Merwu's FY27 budget letter describes major health care policy decisions.

Okay, Mr.

Maynard, if you wrap up.

If I have sorry, one line.

At the public employees committee, including the recent GLP 1 deal and a new labor management agreement.

The council and public need more information about both of those.

Thank you so much.

Okay, thank you very much.

Do we have one person online?

Good morning.

Can you hear me?

Yes, I can, uh Ms.

Radwin.

You got two minutes.

Um Councillor Weber, thank you for this opportunity.

I actually have a remark about revenue as well.

So we have a I'm sorry, it's Laurie Radwin.

Rosendale.

We have a perfect storm in Rosendale of increasing indirect replacement of our long-standing small businesses.

This appears to correlate with our more recent new squares and street zoning.

But more displacement means less revenues for the city in business taxes and the payroll tax and everything else that business owners pay to the city.

And so I'd like to see that accounting within the budget projections for next year.

And relevant to that, briefly, I was breezing through neck tomorrow's agenda, and I want to commend um councillor Flynn for submitting again a request to take a look at the ARPA funding.

I'm not sure how that funding advantaged small business owners in Rosendale.

And also just to please take a very hard look at parking minimum ordinances because you we will lose more businesses, and that's uh not a mystery or fantasy.

Thank you very much for accepting my testimony.

Okay, thank you.

Okay, uh, we're gonna second round.

Um we're gonna do three minutes uh, and then if there's any final questions after that, we'll we'll talk about it.

Um so three minutes, Councillor Flynn.

Thank you, Mr.

Chair.

Um Jim, anything in the budget about what we're doing to support um initiatives at Mass and Cas.

Um we continue to have um within the public health commission uh resources that no, I know, but it what what's in there specific that is is dealing with mass and costs?

Is it in the public health public health there there is um uh supportive housing?

Actually, it's also within the mayor's office housing budget as well.

Um, I know you know but the mayor's budget at the housing they did cut housing.

Wasn't that they cut two million bucks bucks from housing?

Yeah, it's it's sort of a temporary pause of of some funding, some uh some programs within the so nothing really specific, just generally speaking, there might be some stuff in there.

Is that right?

Yes, yeah.

No, I mean we we certainly can follow up with more details on what what uh resources are included in the 27th.

Okay, I didn't notice anything in there about mass and chaos.

That's an issue I've focused on, not just as a city council for eight years, but as a probation officer.

Um trying to get into recovery, but also providing public safety support for my constituents in the South and South Boston, other areas.

Um this year's budget book, the city writes that the city is on schedule that targets reducing its pension liability, and we talked about it by 2028.

Uh the 2028 goal is new as recently as FY25.

The goal, the goal year was 2027 starting last year in FY26.

The city moved the goal forward a year, I guess, to 2028.

Um why did that take place?

Uh I don't I the 2028 goal has or the 2028 date has been in place for at least the last two years.

I can't remember when exactly they made the change from 27 to 28, but it's but it's not new.

It's been in place for multiple years.

Okay.

Um last week's hearing, um, wasn't there a correction to Mayo's statement in I guess you you mentioned it um to CFO that there were 285 full-time employees equivalent positions eliminated in the FY27 budget.

The FY27 budget book says that only 57 long-term vacant positions were eliminated.

Can you tell us how that accounting for the 285 positions is different from the accounting for the 57 positions?

Yes, the 57 represents the dynamic I was talking about with the long-term vacance being removed, so we removed 57 long-term vacants.

The remainder are that salary savings equivalent, so we have salary saved equivalent to uh that number of positions, which is I think in total in the budget 785.

Okay.

Um is there any plans for the city to work with state legislators on trying to change or eliminate uh proposition two and a half um there's not a specific proposal that I'm aware of?

I know there's uh continued discussions in partnership with the MMA around state aid um so uh and and increased use of state aid, so there are some discussions, but no specific proposals.

Okay.

Of eliminating prop two and a half?

No, there's no specific proposal.

But it that the city does want to eliminate prop two and a half, though.

Is that accurate?

No.

Oh, they don't, okay.

I I thought the mayor was on record in support of um getting getting rid of prop two and a half.

I think there's been discussion about ways in which it can be updated and modernized, but uh there's no specific proposal around eliminating it entirely.

Okay.

Uh Mr.

Chair, could I come back to the next round?

Uh yeah, yeah, we're okay.

We'll uh thank you.

Get people's thoughts.

Okay, Councillor Culpepper.

Thank you, Mr.

Chairman.

Earlier we talked a little bit about the uh interest income being down for fiscal 28.

20, we're assuming it's going to be decreased in this upcoming fiscal year, 27.

By 40 million, if it was 80 million before.

And I asked you if we what external advisors did we use?

And you said that it was the Treasury Department that did the investments.

Let me just read something to you.

Boston is one of the cities that uses external advisors for cash management and investment functions authorized by the city's collector treasurer to manage municipal funds.

So my question earlier was because it's obvious that we use outside external advisors.

My question was what who are the outside external advisors that the Treasury Department uses to make the decisions about where the investments are made.

So I'm not sure what you're reading, so I'd be happy to look at that specifically.

We also it could be in reference to um the trust funds we manage, so we use external investment consultants to manage the trust process.

I think it's with the general investments from what I read, and that we understand that the city treasurer has authority over the general funds, and they make those investment decisions, but they use outsiders external advisors to give them recommendations on the investments.

And so my question was I wanted to look at who is making the recommendations to the city's treasurer's department on those investments.

Because I it's good to know who's actually making the recommendations because they make the decisions based on those recommendations, and if we're looking at 40 million dollars, losing 40 million dollars, I I want to try and figure out how do we know now that the investments are gonna be down 40 million dollars, looking at the market, and the market goes down and up, sometimes it's up.

So I wanted to just see who was looking at who was making the recommendations, and and you may not know now, but I would ask that you go to the Treasury Department, ask them what outside advisor, financial advisors uh making recommendations to them with regard to our financial investments.

Yes.

The other thing I wanted to do, I wanted to run to the because they are using somebody outside.

I looked at who's in the department.

I just want to know who, and then we can talk more about it once we find out who.

On reductions in department's budgets?

Yeah, let's say for because I'm looking at my brother's keeper, bought some funds, BMA had oversight, and these are oversight of funds that are within the Boston public schools.

And so my question is who makes the decision?

How does the decision get made?

Is it, I mean, are you making these decisions?

Or you have a team that makes the decisions to you, or how does that happen?

So uh in uh BMA's case, an example, there are there are certain uh projects, so there was uh uh uh an equity study, which I think they're just about to release.

Jim, can you answer my question about how those decisions are made?

Oh, just who do so you get recommendations from who about what to cut?

Who do you get recommendations?

We get uh we we asked departments to offer up uh opportunities to to reduce the budget.

So uh and so black male advancement offered up $500,000 to reduce them, even though in their report they asked to keep it level funded?

Uh I I think I think one of the the reductions was just uh it was a workflow thing, the completion of the equity study.

So that represented like 125,000 of it.

There was actually uh to the point on um my brother's keeper, that was actually transferred of resources into the department.

So that was uh a multi-year conversation that uh BMA had with the Boston Public Schools to say that you know the resources were better placed in in BMA uh as the primary point of contact on the program, so that actually was a positive move into the how much was that?

I believe it was in the 200,000 dollar range.

And will that continue year after year?

Yes.

And can you go back to my initial question?

How are these decisions made?

Who's making the recommendations to you?

And then who do you talk to before you make a decision to make sure this is something that should happen?

And I'm not even including the mayor.

I'm saying let's how does that happen up to the point where it gets to the mayor?

The decision making process.

Yes, I mean, Jim has a team of how many analysts that are assigned a portfolio of departments, so there's a lot of back and forth that's going on between analysts and departments to understand what's the impact of this, what would you recommend?

You know, back and forth, those recommendations get presented to Jim and his senior leadership team, uh, they get brought up to me, we bring them up to the mayor.

So there's a kind of a series of back, you know, I I get feedback, they go back, right?

There's a multi-month process of conversations that are happening uh across those four levels before it's even getting to the mayor.

But who's making the decision?

I understand the discussion, but who's making the decision?

So your analysts are talking with the department, and Mr.

Chair, I'm just saying, I understand until you're clear on this.

Yeah, I'm just trying to get it clear.

So analysts are going back and forth with department heads, right?

About what should be cut.

And let's say black male advancement said, like they did in the report, everything should be level funded, right?

So who makes the decision to cut $500,000?

Did the analyst make a recommendation to you after talking with the director of black mail advancement?

And the analyst, black male advancement, obviously, let's keep it level funded.

That's what's in the report right here for fiscal year 20.

They said, let's keep it funded, right?

They're talking to the analyst.

The analyst has what they asked them to do.

What do the analysts do next, and who do they go to?

They'll bring it to some combination of Jim or his senior leadership team with, you know, again, I I'm just speaking very generally.

Jim, no, I don't know from you.

It's exactly the case showing.

I just want to hear for it's a very collaborative process with the department.

Uh and there's there's lots of, I mean, in addition to the department has a cabinet chief that's involved.

Uh at what point does the cabinet chief make the recommendation to the analyst or to you?

I I think that that's part of the the budget conversation that like so um we did we did appreciate when departments offered up because you know they are the subject matter experts, so if there's a uh an efficiency or some sort of savings identified, we're gonna we're gonna really have a lot of trust in that recommendation from the the department.

Um but uh the it will also be um that the the department has report up through a cabinet chief.

There's that that level of coordination as well, uh, but it goes, it also is presented uh to the teams of the mayor, but you know, I get I guess you know to borrow sort of the uh the Harry Truman uh philosophy that like the mayor, it's the mayor's recommended budget at the end of the day.

No, I understand I'm not I I didn't want to bring the mayor into this.

I was trying to get to how it happened before the mayor.

So the analysts are talking with the department head, right?

The department says we want to keep it level funded to the analysts.

The analyst then goes to who?

To me and my senior staff.

So you and your city and the analyst said BMA said they want to keep it level funded, right?

That's what because the analyst said let's cut it five hundred thousand dollars, right?

How did that decision get made?

It went it went from two point, it went from two point six to it went from two point one to one point six.

So I'm trying to just get to how this happens, right?

So the department head is saying, right?

Let's keep it level funded, right?

You've got analysts that talk to the department here.

So the analyst now is saying the department had said let's keep it level funded, right?

Um then the report to you.

I'm trying to get to who said let's cut it $500,000.

Yeah, you know, I think part of it was related to the community-based grant making.

So this sort of what was a more of a uh broader sort of policy decision.

Um Jim, there's a question.

Yeah, who said let's cut $500,000 and why?

I'm trying to get to how does the thinking that goes into this and then the question is the analyst said let's cut $500,000, right?

Why did the analyst say let's cut $500,000?

If you know, if you don't, I mean I don't know that that was the case in that in the case of BMA.

It might have been.

Well, somebody, but but see that I'm going to be able to do that.

Council Culpepper.

Okay.

Sorry.

I'm just going to the report and the communication that came to the council, right?

It's a level that's all I yeah, we will have a uh hearing with the office of blackmail.

At another time.

Okay and Jim, we can talk offline.

Absolutely.

Yeah, and we'll certainly we can work together to get get you the answers uh in in a briefing.

Yeah, that was the the hundred day special.

Uh we've we're now in 101 days of that.

But uh okay.

Uh counselor were all uh thank you, Chair.

The budget recommendations that come from the department, is that a form or how how is that communicated?

Uh it's it's typically like a memo or something like that, but it's it's it's iterative, there's a lot of communication.

Um we we often uh follow up with additional questions.

Um oftentimes, you know, uh these are busy folks, and we know that sometimes running up on a deadline, they they submit a budget in the case.

Oh yeah, three minutes, Jim.

Sorry.

Okay.

Um can we get a copy of the memos that each department submitted?

I believe Council Murphy asked for this before.

Um I think that's part of the RFI.

I think I think we did ask for that in the RFI and okay.

The memos from each department on their budget recommendations.

Yeah, perfect.

I'm not sure whether we're gonna get it, but please have asked for it.

All right.

And I think well, I mean, this is now Council Weber's question.

I get some time.

Um, sorry.

Yeah, and and then going back to that one of the last questions I asked in my first round.

What was the change in the in the debt repayment policy?

I know you said that were a little bit more flexible in the cost savings around that.

Um, and then on top of that, was there any other um what was also explored, like whether you changed it for a couple months, were you know seven more months explored and the cost savings around that?

And and if you don't have it now, I'm happy to do that.

I do want to so the uh policy previously uh stipulated that 35 to 40 percent of debt would be retired within five years, and 65 to 70 percent of debt would be retired within five years.

Uh the updated policy says that no less than 30 percent of debt is retired within five years, and no less than 55% of debt is retired within 10 years.

So it just gives us a little bit of flexibility.

Um I'm sorry for the original policy.

I think you said five years twice.

Uh oh, sorry, 65 to 70 percent within 10 years.

Okay, yeah.

Um so it just gives us a little bit of flexibility um on that repayment on that principal repayment.

Well what would that save us?

Is that the four?

It doesn't really save you money over the turn, it actually will end up costing us more.

It just because you're you're paying it down over a longer period of time.

Right.

And in the first in the next year.

So uh this is for future issuances.

So um the kind of save again, the savings that we're seeing in this uh recommended budget are more associated with refundings.

Oh, so this is for future, yeah.

Um I know we um project revenue um in a conservative way.

And I just have a few questions around that.

Um I heard my budget, but I no, I got like two more minutes.

All other questions have to be asked by Cul Pepper.

So yeah, feel free to on interesting cub.

I I know we're cutting it in half.

So I'm assuming that we're you know, projecting that interest rate would be lower.

Um wouldn't that then say like new growth and building permits would then increase?

Like they work in opposite directions in the past.

There's a bit of a lag when um development that happens out in in the city reflects itself in as new growth.

So uh I I think so building permits are are like an early indicator of economic activity.

So you have uh building permits and then you have occupancy permits, which are like where people are renting for scaffolding and cranes, and so like oh if people are doing less of that, there must be less building going on.

Um then so we we've just been watching watching that uh we're getting closer to our our budget and our new growth than actual new growth.

And some of it is is historic interest rate uh environment.

So you know, business folks are risk averse, so they're they're they're the because it's they would lose money if they weren't.

So they they are waiting to uh in in some of the geopolitical stuff interferes with with development.

Do I want to pull the trigger on something right now?

When I'm you know, I might in in uh monetary policy, you know, that is the tool in the toolbox for the Fed to stimulate the economy is the lower rates.

So if you when you ever turned into a recessionary period, that that's where um uh the Federal Reserve would go to try to stimulate the economy would be by cutting rates.

So as you can see, when it was almost zero in uh 2021, you know, we made four million dollars in in interest on investment because it's just that that was that's you know that was the rate environment was zero.

Uh right.

And and I know we're not down in building permit and we're not off the 43 million dollars projected in FY26.

Um then with the are we getting the third round?

Uh yeah, we'll we'll do a quick third round, but uh if you uh if there's something related to that.

Okay.

Um we do have an afternoon hearing.

Yeah, I mean, but it's capital.

I know.

Yeah, but I'll I'll I'll go for away from my third round.

Okay, okay.

Um I guess uh you know, just I have a couple questions.

Um but uh so I I think we heard from the Boston Policy Institute, you know, about decrease in commercial ri values, and we've talked about sort of pressures and you know what what we're dealing with and why we're seeing deficits and what we're looking at for next year.

I mean I uh absent I think from your comments was the decline in commercial real estate values.

I mean, how does that uh that reality you know impact our our operating budget um and our you know projections for next year in terms of you know what we're spending on employees and things like that?

Yeah.

Um so the great thing about our property tax system is it is sort of agnostic of value, right?

Um so the fact that property commercial property taxes are going down does not impact the amount of revenue we take in.

So our assumptions make no projections for overall value change, it just assumes that we will continue to generate the maximum up to the levy.

Okay.

It is there any way I know there there is a levy in terms of our our tax levy, it's like two and a half percent of all the value of everything.

So because the commercial values are going down, are we you know what about that levy ceiling?

I know the ceiling, I know we haven't really talked about it.

I think we're at like 1.5% of that.

We've never really been close, but is that a danger?

It's not.

We would have to lose 88 billion dollars worth of value for it to be a problem.

Okay, well um uh okay, and then so I in terms of the projected revenue, like I I thought there would be a revenue bump in June at least for the World Cup.

I mean, uh, but I I didn't see that.

Have you are you making projections about the world?

Is that included in your math?

Um so it's not because June is uh the last month of fiscal 26.

So um if we see a bump in uh uh excise activity from the World Cup, we'll see that reflected in our revenues for 26, which would be great because that will help us um offset some of the snow and public safety challenges we are forecasting.

Um and then there's a little bit of tail activity um for World Cup and tall ships and 250th in July, um, but it is pretty modest, so I think we do, you know, we're we're not assuming anything extraordinarily over and above our typical excise assumptions for spring uh for summer months associated with those events.

Um to the extent that that happens, it can help us offset costs associated with hosting them.

Okay, but we do we do expect, at least on the revenue side, maybe in the end it just we you know um it it balances out because of the increase you know overtime costs, but we are projecting some sort of re revenue increase over the normal.

There's there's there's been some projections for increased excise revenue um as a result of the World Cup being hosted.

It was relatively modest.

Um it was done by excuse me, an external group um that projected that we could see an additional, I think nine million dollars of revenue associated with hosting.

Um but we have not done our own internal update of that number.

Um okay, thanks.

Uh so I I we for I want to thank everyone for sticking around.

I'll I'll just I'll give you three minutes each and then uh we're gonna let people sort of gather themselves for this afternoon's councillor Flynn.

Thank thank you, Mr.

Chair.

Um I I just wanted to highlight a couple of issues and in Jim, I know I asked you what specifically in the budget is there for mass and chaos, but Mr.

Chair, through you, could I um have a question um answered uh what specifically is in the budget for mass and chaos yeah okay.

Um my second point I I did want to make is um I am concerned about the main street program, some of the misappropriation of funds I've I've heard about.

I've been trying to I've been trying to get more information on this.

Uh are you aware of any misappropriation of funds at Main Streets is that question for me or for Jim?

Neither of um there was that one uh allegation that came out a couple of months ago, which I believe is still kind of an active investigation, but beyond that, no.

Was that an isolated incident?

From what we understand, yes.

Okay.

Do we know if the if if that incident is being investigated by state or federal officials?

Um I that there's some ongoing investigation associated with it.

I'm not sure by who um I I do think it's critical critical that we account for every dollar we spend and receive, demonstrate fiscal discipline and accountability.

Um I I think that's important.

That's why I'm focused on that, and I want us to I want us to ensure that we're in compliance with city, state, and federal guidelines.

I don't want us to downplay an incident where federal funds are misappropriated.

Um let me let me go to an a question.

The chair of the Boston School Committee, well respected, Jareve Robinson, mentioned that we should have an audit of Boston public schools.

Um is she correct?

She said this two weeks ago, right before she was about to vote on the school budget, and you could you could tell she almost wanted to vote against the budget, but she said she almost needed more information to make a better decision.

She requested an audit.

Is she right to request an audit?

The Boston Public Schools are part of our annual financial audits.

Right.

Um whether or not the schools should receive a audit beyond that.

I you know, that's not sort of under Jim and my It's not under what?

I I I'd say it's not really under our scope to comment on whether or not they need a performance audit.

Okay, who's whose scope would that be?

I I would defer probably to the Boston Public Schools.

Okay.

Um my final question is well, out of respect for my call, Chair, I I'll stop there.

Okay, thank you.

Counselor Culpepper, uh three minutes and I'm gonna cut you off at three minutes.

Thank you, Mr.

Chairman.

I wanted to through the chair make sure we get uh who are financial advisor or external finance or advisors are and I wanted through Jim to get uh the protocol for how the decisions are made with regard to budgeting whether it's a cut or whether it's an addition.

Okay, yeah, um, can I add you look I'm I'm pausing it?

I'm just in terms of financial advisor, you are you're talking about on the budget or the investments.

Investments, the investments.

Okay, yeah.

I can add Treasury is one of my departments, so I can answer that.

So we have a small portfolio of general fund dollars that is uh invested uh and we use uh firm called uh PFM asset managers to help us with that, but that's a small portfolio.

Um if you just give me a second, I'm pulling up.

They're PFM asset managers, so we call them PFMAM.

So they help us with that one you know, very small uh general fund portfolio.

Um just looking at our investments.

We uh have general fund investments in a number of banks as well.

Um and so that is banks.

What banks are those?

Um citizens.

Um we have a JP Morgan investment account.

The biggest one is this bank called MMDT, uh, which is the Massachusetts Municipal Depository Trust.

Um so that's where we have um uh uh uh a lot of our general fund dollars and uh sitting, um, and then a number of smaller um local banks leaderbank, Salem 5, Dedham, Rockland.

Um so it's spread out amongst them.

And there are no external advisors with regard to those investments.

So the only external advisors we have are PFM asset managers.

Yes, and then for our trust accounts, we have a um uh investment consultant um NEP NEPC.

Uh and I can't remember what that stands for.

NEPC.

That's for the trust investments, okay.

Is that it?

That yes.

Okay.

Thank you.

Um Councillor Culpepper, just so you know.

Hold on, Jim, I'm not I'm not ready for you yet.

Oh, I just want to put a little color on the interest on investments.

There require there's a requirement that it be very conservative and liquid, and that's why it's so connected to the um Fed fund rate.

It's not really high creative investments, it's really just a bank interest supposed to be.

No, I understand with regard to the banks.

I was looking at the other investments, mutual funds.

So do we invest in mutual funds?

Um, okay, I can bet you on that part.

You can give it because my time is running.

You gotta ask questions they know the answers to.

I wanted to uh I wanted to uh real quick ask about the economic opportunity and inclusion uh cabinet and the cuts there.

And I wanted to number one look at how much the cuts were, and how will these cuts impact existing program within the economic opportunity and inclusion cabinet office?

So so um I believe that cabinet had uh community-based grants as well.

Um so they would they would fall within that um uh sort of policy.

How much were the community-based grants?

Um well, I think in aggregate, it's it's 12 million dollars.

To be honest with you, I don't have the number for economic opportunity inclusion at the moment, but uh okay.

Can you get that to me, Jim?

Sure.

And then get me the total cuts to the economic opportunity, Mr.

Chair and Inclusion Cabinet.

And and I wanted to my question was what impact does those cuts have on existing programs, including workforce development and small business support initiatives.

And we can get that to you in writing if you want.

Sure.

I'll make sure we I'll make sure we get it to you right now.

Okay.

My colleagues at the is my time up?

Your your time is up.

Uh and I think any other questions you have.

I mean, we can certainly we'll we have this whole season to answer your questions, and we'll make sure you get the answers uh even if you haven't asked them today.

The question that I'm gonna submit to Jim will come through you, Mr.

Chair.

Yeah, I yeah, I mean we can yes.

I mean, I think that would be uh the way to proceed.

Okay.

Uh thank you, Jim.

Okay, thank thanks, Councilor Culpepper.

Council.

This question doesn't need an answer.

I just want to get them on record to the chair.

Um, and it's around new growth, which is budgeted at 40 million FY27.

Um, just wanted to know what is driving the forecast to draw from 79 million in FY26 to 40, 40 million FY27.

When was the last time we had new growth of only 40 million?

We know new growth is in three parts.

Part one is 121A agreement, properties coming back on the books.

Do we have that number for the past five years and projected for FY27?

Part two is the personal property growth or infrastructure growth.

Do we have that number for the past five years and projected for FY27?

Part three is new construction in FY25.

We had a building permit revenue of 47 million leading to that.

FY26 new growth number in its entirety of 79 million.

Now no new buildings come on the tax books and segments each year over the entire different construction period.

But I think looking at the prior year's building permits can give us a good estimate on the next year's new growth that relates to construction.

FY26, we're also estimating 47 million, but we're projecting new growth to go down to 40 million.

What's the reason behind that with the same amount of building permit revenue year over year from FY25 to FY26 today?

Just want to put those on the record.

Um, and I want to just jump into the I know I've advocated for in the past a multi-year operating budget on port on page 147 of the budget book.

We talk about multi-year budget plan.

Um can we get a copy of that multi-year plan and horizon?

Yes, yeah, we we published that in the adopted version of the budget.

Okay, so we couldn't get it um prior to we update it in the fall, so the latest version of our multi-year forecast is what appears in last year's adopted budget.

Okay.

Um the other question I have is around revenue um for those a few things.

Uh but one of one of the one of the things was jet fuel and then room tax.

Um we're trending to once 166 million through the first seven month.

Um, however, um, and and I heard FIFA is still this fiscal year, but there could be an uptick with the other events.

We are forecasting 162 million for FY27.

So we're actually going down, although we're gonna exceed um FY26 projections.

Um and the same thing with jet fuel tax.

FY25 is 42, FY26 is 43, um, but for FY27, um, with hopefully an increase of people coming into the city for these events.

We're projecting 30 million for FY27.

Um what is behind us under projected revenue, um, although we are you know exceeding expectations in room tax.

Um, and then there's events coming on.

Yeah, I think some of the the hotel occupancy again, the the events will happen in this current fiscal year.

Um we we are sort of um increasing the budget uh um for room occupancy.

Um it's going up by 14 million dollars, uh uh nine and a half percent.

Uh that's sort of oh, you're looking at projected versus actual uh FY27's budget, yeah.

Okay.

Yeah, it's really again it's not it's it's an estimate that we feel it's defensible for um uh revenue.

And that's that's sort of the the theory that when we go and get uh the tax rate certified, um primarily they're looking at your your valuations, but they did it for you what they call local receipts, which um uh in most communities, even in Boston, you know.

So uh property tax is number one, uh state aid is number two.

We have the local receipts is is the rest in some communities it's not very much at all.

So uh the due diligence that the OR goes through is they almost want you to have proven that you've got you've raised this you've um got uh revenue at least at that amount in the historical like an audited number before they would allow you to like increase it because you know they're they're also their role is to protect communities from you know uh wildly overestimating revenues.

No, and and just a couple more questions, Chair.

So you know, the cost of fuel we're all seeing the cost of fuel being way up.

Um and then you know, we're we for FY27 our projections on revenue on jet fuel tax is down 12 to 13 million.

Um that's the other point I wanted to make on that.

But going back to this reserve, um it's 1.2 billion dollars.

That's our unassigned fund balance.

Okay.

Um can you just um describe what that was made up of that?

Like is it yeah?

Yeah, I mean it's really any kind of um you know surplus funds that have developed and accumulated over the years and aren't assigned to a particular uh use uh in the budget.

So they appear in our financial statements, um so you can see that uh included there and kind of how we we arrive at that number.

Got it.

Um and then lastly, are we looking at rebidding any major contracts um to see if we there's any cost savings there?

Um some of our our larger reprocurements are not necessarily resulted in um savings.

Uh you know, so I think last year we uh uh encountered the um waste reduction collection con component of the contract, which uh in order to to sort of meet some of the service goals and finish times and operability, that that contract went up significantly.

Uh one of the things that we're concerned about more for FY28 is the um solid waste disposal budget.

So um in aggregate uh in the in the current budget, it's you know, it's a 77 million dollar uh cost to uh collect residential uh waste.

So I mean um Streets Cabinet can speak uh more intelligently on it, but it it's a market that we're challenged just based on some of the dynamics and business uh um terms that you know the the market of um vendors bidding on our work and then and then lastly um do we have any uh or is there like a list of any vacant city owned um properties or build-ins or commercial space?

Is there is there a list that we have or or keep it?

Um not that I'm aware of, we could always check with the public facilities department to see if that's something or PMD to see if that's something that they maintain.

All right, thank you.

Yeah, I thought I thought we did a list of the vacant properties at least, uh maybe like vacant land, vacant land parcels, parcels, yeah.

There was a land audit on a land audit.

Yeah, yeah, I'm trying to think of like space, building space.

Yeah.

We've got a high school in West Roxbury to sell you empty.

Um you already tried they already tried to sell it.

Yeah, well, uh okay.

I so I I took just a quick question on amendments.

You know, we spend a lot of time talking about budget amendments and and programs, uh, and I get into sort of counselor Culpepper's line of questions about who's making decisions and what's going on.

What's what is the how how do the amendments get reviewed?

Are they singled out or do they just you know is that part of your department by department discussion?

Uh because they I think for the most part the last two years we put in the amendments and then they're not in the budget the next year.

So I guess how do you talk about it, uh, the amendments planning the next year's budget at if at all, and uh then how can we how should we look at them when we're planning on and spending a lot of time you know going through the budget looking to make amendments?

I think like any item, you know, we review things individually by department to you know assess it on its you know, as a standalone item, so we you know we tend to review things by department and individually.

But so there's there they're not I mean I I think when we f we first started doing this what uh I did two years ago, we the thought was it's in the budget, it's going to be in the presumption would be in the budget the next year, but I think in reality how this is played out, it's like sort of the opposite, like it's not in the budget, but um even with something like city housing vouchers, like is that amount that the you know I know the mayor mayors that raise the amount year to year, is the amount that we add into that considered like the sort of baseline for the next year, or what do you look at?

Yeah, I I think uh this year um so there's uh there's two different types of vouchers of project-based vouchers and um and then this tenant vouchers, and I think uh reductions in vouchers and the mayor's office of housing this year was was more of a uh temporary pause based on the fact of balances that the housing authority has on hand to sort of maintain that level of service.

Yeah, no, I meant like and I'm gonna get my numbers wrong.

If the city housing vouchers is the mayor sets it at 12 million and we add two million, so we're at 14 million.

When you look at the city housing vouchers for the next year, are you looking at okay?

Well, we're at 14, do we go up or down?

We're not sure, or do you just erase our amendment and then you know, just to use an example?

Right.

No, I don't think so.

Um, and that's really like a function of us building, you know, the team spends a good chunk of the time building up the maintenance budget, and so deciding, you know, in order to deliver the same level of services as last year, what's the appropriate number to assume is like our maintenance budget, and so well, I guess the question is are the amendments in the maintenance budget?

They can't they can be, but right?

It's like it it depends on like you know, if we're kind of evaluating it from a standpoint of what is needed to deliver the same level of service, it could be, but maybe the amendment didn't get spent last year because of reasons, right?

So it that's why we have to sort of evaluate them individually.

Okay.

I appreciate it.

Uh thank you for uh a good start to the budget hearing process.

Thanks to my colleagues for being around uh sticking around and uh uh I uh work with you to make sure you get the answers to your questions.

Um but that that's gonna be oh I'm sorry.

Council President, did you have any uh did you have one question you need to get off your chest?

One thing we had a home rule petition that went up to the state's house and was approved to raise the fines for uh code city of Boston code violations.

I are we uh effectively implementing those increased fines.

I'm thinking about revenue.

I'm always thinking about it.

Yes, um I'm so I'm not aware.

I think we would I I think uh we would need to come back to this body to actually increase them.

I'm not sure, I could be wrong.

Um but as far as I know, we have not assumed the increased amount.

As we've talked about before, there is a component of the code enforcement issue that is the amount we're charging, but there's also how are we ticketing, how are we collecting, how are we resolving the problem?

Um that's also a function of this.

We could, you know, raise the fine to whatever we want, but if we're struggling to get people to pay it, um I think we're working on on improving our information system so that we can actually have accurate addresses and things like that.

It's it's accurate addresses, but it's also um right, it's notice, it's accurate address, it's making sure that we're consistently ticketing an issue, that we're following up on an issue once it's been resolved, that we have an appropriate hearing process for people to go to to you know, uh appeal right.

So it's a it's a really quite complex cross-departmental ecosystem that we're making a lot of progress on, but there's a lot of room for improvement.

Yeah, that's wonderful.

All right, thank you.

Thank you for being here.

Okay, thank you very much.

Uh this hearing on Docket numbers zero seven three three to zero seven four zero is adjourned.