Okay, good morning.

For the record, my name is Ben Weber.

I'm the District 6 City Counselor and the chair of the Ways and Means Committee.

Today is May 27th, 2026, and the exact time is 1019 a.m.

This hearing is being recorded.

It's also being live streamed at Boston.gov slash city-council dash TV and broadcast on Xfinity Channel 8, RCN Channel 82, and FIOS Channel 964.

Written testimony may be sent to the committee email at ccc.wm at Boston.gov and will be made part of the record and available to all counselors.

Public testimony will be taken at the end of this hearing.

Individuals will be called on the order in which they've signed up, and we'll have two minutes to testify.gov for the link, and your name will be added to the list.

Today I'm joined by my colleagues in order of arrival, Councillor Culpepper, Counselor Fitzgerald.

I have received a letter of absence from Councillor Louis Jen.

We're joined by our uh today or this morning by our chief financial officer, Ashley Graffenberger, and our budget director, Jim Williamson.

Um we're just gonna uh go past opening statements and wave those, and if you have a presentation, we'll hear from you and then we'll get to questions.

Well, uh, thank you, uh Chair Weber and other members of the Boston City Council.

Uh my name is uh Jim Williamson.

I'm the budget director here at the city of Boston, and I'm joined by the Chief Financial Officer Ashley Garfenberger.

Uh we appreciate this opportunity to uh discuss the FY supplemental budget and its impact on the city's finances.

Uh we understand the administration values, the shared responsibility of the city council to safeguard uh Boston's limited public resources and uh serve here that serve our city's residents.

The appropriation order before you explain the details of its financial transaction, and formally request uh your recommend recommendation for approval at the next city council meeting.

So what we uh we put both dockets, we know there's a separate hearing uh this afternoon with uh BPS on Docket 0131, but just for uh completeness uh in terms of the overall change to the budget.

Um, zero three zero is for 47.1 million dollars, and that's for snow and winter management.

Um later today, uh BPS will come in to speak to Docket 1031, a 22.8 million dollars supplemental for the public schools for uh health insurance and uh utilities.

Um just a little uh uh so the funding source that uh supports this appropriation, uh, these appropriations are free cash.

Um, and just for for context, I think it's been uh communicated a few times about this the level of free cash that the city has on hand.

Uh we started um FY26 by budgeting four million uh forty million dollars for OPEP, which has been uh our our standard practice for for several years now.

Uh and with these two supplements, the total seventy million dollars, that'll be uh a hundred and ten million dollar draw on on the free cash balance.

Uh, and we must remember that in addition to that, there's 40 million dollars carried forward into the FY27 budget.

So there'll be a drawer of about 150 million dollars through the two fiscal years, which is about 24% of the free cash balance of 601.

So we uh we understand that this is sort of reserved for extraordinary events, and I think uh the way uh we'll get into the snow and winter management and and speak to how it is sort of uh different from our recent year's experience with snow.

Um so the snow budget supplemental covers uh the snow and ice contractors for public works, the Boston public schools, parks and recreation, and the mayor's office of housing.

So uh the city provides snow and ice removal for all the roads open to public travel, municipal parking lots, public stairways, footbridge, bridges, paths, bridge pathways, and for uh MOH as a landlord uh of you know, sort of the owner of city-owned lots, they clear the sidewalks in front of those lots.

Um expense items include things like contractors, uh both emergency response and uh this year, given the accumulation of snow, uh several post-storm removals.

There's staff overtime, uh public work staff who are driving trucks, managing contractors, responding to inquiries, roadway treatment, which includes salt and other approaches to sort of treating the roadway to have a better response for snow removal and ice melting.

Uh this year, given the accumulation of snow, uh we rented snow melters.

Uh that was a sort of a uh an unusual sort of one-time expense.

Uh uh, where we store our snow that we remove from sort of major thoroughfares, business districts, things what we call snow farms, uh, and it's often sort of city-owned assets, but others uh property the city has access to.

Um, so for example, parking lots of golf, golf course, um, municipal and golf courses, things of that nature.

Uh, and given that um over time, some of the more uh other property has no longer in the city's um control.

Uh it's the number of snow farms has reduced, so snow melters became more important to make room in these storage areas to store it.

Uh and there's also sort of all the periphery costs of um of providing a snow response.

Um, so there's our central fleet is repairing equipment, you know, uh retrofitting it for snow response.

Uh and also within uh the snow preparation, we charge the um the debt service for like replacement of snow equipment.

So large, you know, um spread snow spreaders and plow blades and the like are in, and then even some of the more uh sort of lower level cost things like weather monitoring costs and things of that nature.

So um I guess snow in uh winter management highlights, and I and I know uh uh Chief Gove came down here and did a presentation uh in early March uh right on the heels of those those snowstorms, but um it's we we are not alone in dealing with these sort of uh variable snow uh occurrences in the city.

So uh and it's not uncommon for communities uh around the state to seek free cash supplementals to uh close uh a budgetary uh gap um for snow removal.

So it's it's um while there's a reporting deadline for the current fiscal year isn't until September 15th.

So communities around the state are going to their their select boards and town meetings to get these supplementals to close the books.

They don't actually officially have to report their snow and ice removal costs until the state.

But that's how um sensitive and how uh impactful it is to municipal budgets that the state separates that one cost item as a is something that they want to pay attention to would have all these state laws, you know, Mass General Law, Chapter 4431D sort of speaks to the emergency nature of snow removal and the fact that you can overspend your appropriation.

Uh the this past uh winter uh saw 61.6 inches of snow, marking the coldest and snowest winter in 11 years.

So we sort of fell into a little bit of complacency and not being uh sort of having this uh thing it was on average it was uh 2.1% below normal, reversing a 10-year trend where uh temperatures in the winter around here have been three percent three degrees higher.

Uh the uh the streets team and and other uh teams uh schools and and parks and MOH managed 20 different distinct winter weather events this winter, requiring almost continuous ice response during that extended cold period.

Um and just to highlight, there was sort of two uh major winter storms booked at bookend between a period of very cold weather.

So uh the January 25th to 26 storm uh was 23.2 inches of snow in a 36-hour window.

And I think uh those were notes uh taken from Chief Gove's sort of presentation before this body, you know, talking about how the city is responding to that storm, and the February storm as well.

I believe it was in early March.

Uh the the second storm, which was not regionally dispersed evenly, um, I think uh I think the southeastern Massachusetts and even into Rhode Island, they were more adversely impacted.

It was a name storm, winter storm Hernando, uh seven, but it in Boston it wasn't as as much accumulation as the previous storm.

So it was 17.1 inches during the blizzard of 2026 or winter storm Hernando.

Uh and ultimately, once FEMA did their sort of calculation of eligibility for FEMA, Suffolk County was excluded because we didn't hit our sort of you know, probably not doing the justice on the formula they use, but it's not a record uh in their mind to to unlock um federal resources and so um even before uh the uh the winter that we uh endured, we were trying we're working towards um uh closing what we anticipated of revenue that was not meeting sort of um uh you know the estimated amounts uh and also spending that we're well well acquainted with uh like public safety overtime and execution court spending, and then as as we've just talked about, things that are not as um consistent but snow removal.

Um so we went through a process of doing a more controlled hiring process.

Um so it one of the one of the things is it um uh actually, you know, uh in working with the mayor's team communicated to the council on the status of um the FY26 budget um towards the end of March, and we had already sort of uh try to capture within that projection to not overstate um uh the position we were in uh some of the savings that we're achieving.

And initially it was sort of uh sort of a controlled hiring approach with filling vacancies with some other very non-discretionary, very discretionary expenses like uh food travel, you know, uh swag, you know, which is sort of like city um non-union required clothing and things like that, but not the biggest cost element, but sort of a way to sort of manage costs without having uh a lot of impact on departmental operations, um, but uh continued hiring in essential roles where we where we were authorizing spending, so place places like uh E911 call takers, um, uh lifeguards, uh those sort of titles continued to fill, and actually, we've been successful in filling those titles, even uh uh sort of the much loved uh or or hated, I guess, parking enforcement offices loved inform in terms of regulating the curb, but you know, no one likes to get a parking ticket when you uh violate the the regulations.

But so those are things that are continued to hire.

Uh and then non-personal uh spending.

So we um we still maintain that those sort of more um discretionary spending controls, but also um, you know, given where we were and we needed to close that and have the benefit of knowing where the direction we were heading for snow, um, we put on a more stringent, and I think that communication with his historically has been a transition memo for departments getting ready to close out the fiscal year and getting ready for the next fiscal year, but also included provisions for uh controlling on non-personnel spending with sort of a way to sort of being very deliberative on how non-personnel spending uh so that that's driven again um uh you know uh some modest savings, but many of the savings that we achieved have been uh offset by counterbalancing sort of growth and expenditure items.

So we had more clarity on the security needs for world cup soccer, um had more information on the number of events, the duration of events, um, you know, other community-based events related to it.

So those have been baked in with uh with now the better understanding of grant awards, um, and then you know, uh uh increasing energy costs.

So we're we did see we sort of uh put in a more more accurate and more uh reflective of what we're seeing real time on costs related to energy.

So but um we do feel comf confident that with these offdated projections and some modest adjustments.

We we can with this uh uh 47.1 million dollars for the city in the 22.8 million dollars for BPS that we will end the budget uh on balance.

So with that, thank you.

Okay, yeah, thank you very much.

And again, so this afternoon we're having here in PPS on the their supplemental.

Um so I'm gonna go to my colleagues who enjoyed my Councillor Fitzgerald, if I didn't say that already.

Uh so counselor Culpepper, we're gonna eight eight minutes uh for a first round and uh if we need to come back.

We'll do that whenever you're ready.

Thank you, Mr.

Chair.

I don't want to get the mic.

So eight minutes.

Oh sorry, Councillor Culpepper.

Yeah.

Thank you, Mr.

Chair, for eight minutes.

I must say this is the first time since I've been at this microphone that I've been given eight minutes to talk, and I probably only have two minutes worth of questions.

So if I could save some of my time for later in the week when I really need that six minutes, I'd be truly grateful.

You know, Jim and I talked earlier before we got before you came in.

Most of my questions he's answered already.

I was asking him about the state budget and how it balanced and why we had the level fund.

But Jim, just talk about that a little bit more.

Because I think you helped me cut down on the number of questions I had when you started talking about anchorisma, uh talking about the state law and what we had to do in order to comply with the state law.

You I think Ashley sort of summarized it a bit as well.

So Mass General Law Chapter 44, uh section 31D allows for its pallies to exceed their snow appropriation.

The one caveat is that um uh you could do it automatically without any permission by um uh as long as you haven't reduced your prior year's appropriation.

So uh, you know, and I think that's a good rule because it's sort of you don't want to um sort of uh artificially lower something that is uh is a cost.

Jim, talk about that a little bit, so long as you don't reduce your prior year's appropriation.

So that that is sort of a provision of the the law that says that um uh you don't need to like seek any permission to like exceed it as long as you haven't reduced the prior years, you know.

So the current year appropriation is at least as much as the prior year.

And that's why we ended up again with that 22 million from the prior year.

Right.

And it's ideally it's it's um you should be having budgeting something on a consistent pattern of expenditure.

Um the problem is with snow and winter management, we haven't really established a consistent pattern of spending.

So it's in it in any dollar you budget um uh gets factored into the overall size of the budget and uh you know claims resources that may be available for any other part of the budget, and so we're gonna be at 70 million dollars overall for the snow.

And next year we can't, we don't we won't have a fiscal year 27, or the budget for fiscal year 27 is the same as it was last year, knowing that we could have we could be sitting here next year, same time with another 40 plus million dollar supplemental.

We certainly hope that this was like an extraordinary event that doesn't repeat itself every year.

Yeah, could be more.

I will defer to the streets cabinet, but it is based on the type of equipment, so like the hourly rate for a small pickup truck versus a big 10-wheeler versus a you know a big front end loader or or what is it that I would I would defer to them on the exact rate.

I know there was a contract year change in FY25, and the rates went up considerably in between fiscal year FY24 and FY25, sort of manifested itself a little bit in the in the deficit that we achieved happened last year, uh a more modest deficit, manageable deficit.

Uh but um that is and that's uh a function of contractors building in their labor costs, all of their overhead uh into those rates, uh labor, equipment, fuel, insurance, all of the like, which are all, you know, as everybody knows, are growing.

Um could you at some point give us to the chair a breakdown of the contractor spending, the staff overtime, the equipment repair, and um really interested in the snowmelter and those operations.

Remember, years ago there's a lot of discussion under, maybe rest in peace, May Manino of buying snow melters because New York had they had snow melters long before anyone and I thought we had bought some, but I guess not, huh?

I think we rented them the last time.

We didn't include it.

Is there any possibility of us starting to look at buy-ins, snow melters, because they save on sold?

They save on space.

Yeah, I I think a good sort of cost benefit of of the utility in a municipal environment.

What what you'll hear anecdotally that it's it's very challenging to operate them in a in a urban snow environment because it's it's our snow is not pristine like an airport or something, it's it's sort of got, and probably the airport is not completely pristine either, but uh we have furniture and you know, all of the we get the same snow New York gets.

Right, don't we?

Right.

Probably a little more of them, right?

But they've done so well with those snow melters, and so it's gonna save money.

Right?

Yeah, we we could certainly uh make sense to look into the uh and if you could just get those categories uh to me through the chair, uh and then I wanted to look at the number of private contractors versus the in-house contractors or city operations, how does that measure up and how are we doing whether we need to beef that up for the future or cut it down?

Just I just wanted to look at those numbers, then we can talk about them later, Mr.

Chair.

That's all I have, and I have time left.

Yeah, one minute and forty-one seconds.

I just so uh uh thank you, Mr.

Chair.

Just to follow up based on um what counselor co-oper was talking about.

So for first of all, uh uh I did look at chapter 44, section 31D, it's it's pretty clear, you know, just says uh that you can spend over for snow removal, you know, uh, provided that the appropriation for such purposes in the said fiscal year equaled or exceeded the appropriation for the for snow removal in the prior fiscal year.

You know, uh so that's so if you what happens if you're if you we appropriated 21 million dollars in fiscal year 27 and we went over.

I think there's an approval process that we would have to go through in order to overspend our budget.

Whereas now, based on that law you decided, we can just do it without additional authorization.

But if you reduce it, there's other steps that you would need to go through in order to spend beyond that appropriation.

Okay, and then I I just before sorry, Councilor Fisher, uh it does it says that if you do go over expenditures made under the authority of the section shall be certified to the board of assessors and included in the next annual tax rate.

Can you explain explain what this appropriation does for the tax rate?

I guess.

Uh, so yes, I will do my best.

This has been an education that we have gone through to this year as we've been learning more about um overspending snow.

Um, basically, if you incur deficit in your snow spending in one fiscal year, the next fiscal year you would have to ensure that you are raising enough taxes to cover that deficit.

So you have to deal with it in the next year.

Um, and you're still capped by you know your levy and and prop two and a half and all of that, but you would so you would need to ensure that there is sufficient tax revenue that you're raising in order to cover that shortfall from the prior year.

Okay, uh I so I still I paused your time at one minute 38.

Uh but um uh but it's so so it basically are can you just expand it a little more?

So the fiscal year 27 budget, do we then have to put in an extra 47 million dollars?

So because we're doing the supplemental and hope that we'll have the council support in appropriating free cash, we won't be in that position, but should we, you know, if we weren't pursuing a supplemental, we would have to somehow account for it in next year's.

Okay, that that helps uh okay, thank you.

Uh Councillor Culpepper, did you have Ashley?

If we weren't pursuing the supplemental, you're saying that we would have to account for it next year?

And so, what if we weren't pursuing a supplemental?

What would that look like?

Yeah, well, I mean, the the big thing that Jim and I are focused on too is not having the city's books end in deficit this year, right?

We that would be not great for the bond rating, the bond rating, all of that, right?

So we're trying to cure that shortfall before June 30th, such that we don't end in deficit.

And so, if I may, um so the administration talked about using the use of free cash.

I think the mayor said it was fiscally irresponsible, uh, but we're using free cash this year was used last year.

What's the distinction in terms of when it's appropriate to use free cash and when it isn't?

Yes, yes.

Um, so I'm I pulled up, I anticipated that question, so I pulled up the guidance from the state on the use of free cash.

Okay, and um from DLS division of local services as a non-recurring revenue source, free cash should be restricted to paying one time expenditures, uh funding capital projects, or replenishing other reserves, and we do not recommend that free cash be budgeted for ongoing operational purposes, so really uh the one-time kind of unique emergency nature of the expense makes free cash an appropriate resource for the expenditure.

Well, you know, we have different interpreters of what non-recurring is, because I don't think snow removal is non-recurring, but uh, Mr.

Chairman, time is up.

Thank you.

I knew you wouldn't let me down, Councillor.

We got to even a um okay, Councilor Fitzgerald.

Um, thank you, Chair.

Um just thinking off your last comment though, it's it it just sort of gives more credence to support the supplemental.

I think it's fair to say we never want to go into a fiscal year planning to pull from reserves or free cash, but at the end of the year, you know, given any sort of circumstances that you can, and that certainly um I think it's a red flag for for the ratings as well, if uh the plan going into a fiscal year is is pulling from free cash.

So I I do understand it from that regard.

Um but I guess what's interesting.

Well, I'll start with the snow and then I have questions just about the how money works after that.

Um a lot of what I'm hearing is 2015 versus 2026, right?

But my interpretation is um costs have gone up, you know, labor's gone up, uh materials have gone up, etc.

Um, but what was the actual snow from 2015 to 2026 and what did we see that it was there any other difference the way we approached it uh in terms of how to move the snow?

Was it the was it a more I know there were more snow occurrences this year, I think, but there was more snowfall in 2015, and I think just a lot of people have asked me that question of like we did this you know 11 years ago and we didn't have to go 47 million over budget, so what was the purpose of that year?

I think if that if you could explain that answer to f to folks.

No, it's it's the exact question we all had the same with um so you in in 20 uh 14 15 it was 10 inches of snow.

Um slightly more uh uh number of um occurrences or events, 27.

Um, but we it's it's basically, you know, um 10 years later uh in terms of cost growth.

Um the uh the approach we actually pushed a lot on asking about how are you doing things differently?

And maybe uh this year uh the the number of uh removals was probably um, but it was uh event specific.

It was sort of it wasn't melting, it was uh it was accumulating, uh impeding uh mobility, um so ultimately we agree that with the approach and that it was necessary to for public safety and access and to do that.

Uh and then we were compounded by the fact that you have cost growth in 10 years, uh less space to store, you know, uh removed snow, and then the need to uh deploy rented melters sort of on emergency basis to sort of melt it to make room for more snow.

So um but uh the streets team had said they're not operationally, you know, on the snow fighting or emergency snow reform.

So they're following the typical protocols.

Yeah, okay, understood.

We also had the benefit of getting a FEMA claim in uh in 2015.

Gotcha to cover so that covered, do we know how much that covered?

It it covered about three million dollars of our cost that didn't have to go into the general fund, it was covered in a by FEMA.

By FEMA.

So three million of that, okay.

Were we over in 2015?

Did we do we go we went past our snow budget in 2015, similar to this year, right?

Um how much over were we then?

It was roughly 20 million dollars over.

20 million, three million covered by FEMA, so we had to absorb 17 million, and did we do a supplemental budget in 2015 as well?

Um we did not um have to do that in twenty seventeen.

But we just had enough of a buffer built into the budget.

To take that on.

Yeah, gotcha.

Um, so the 150 million uh that all together we're using, I understand that you know the 110 is one's coming from snow, the other will be for BPS.

Um, and that 40 million that we that's an annual thing, right?

Can you just explain to me what that's used for and we pull it out to start a fiscal year?

And I know we start right.

If I'm correct, and I know we just started this conversation saying uh usually starting a fiscal year by pulling from reserves, but I know that this is a consistent thing.

Can you just explain to me why it's a consistent thing and why it happens at the beginning of a fiscal year pulling from reserves, just so people understand?

Well, you're already pulling from there to start the year, why not just pull more?

Yes, so we uh historically budget 40 million dollars of available fund balance to fund our contribution to our retiree health care liability.

Um so that 40 million dollar revenue matches uh 40 million dollar discretionary expense, right?

We're not under the same kind of schedule for our um OPEB liability as we are with our pension, but it's a large liability, and so we want to start you know, make make some progress toward that.

So we we acknowledge that um expense with that one-time revenue source.

We don't always end up needing to use that 40 million dollars of available fund balance to fund that contribution.

So should revenues come in sufficient during the year, we can cover that expense without pulling in that fund balance.

Um, and so that happens in you know, some years where we don't actually need to use that that money to fund that particular expense.

Okay, but just just so for folks who understand, well, you're already pulling from that's what it's for, it goes to fund our OPEB, and that is just a continuous down payment as we because it is such a large nut that we have to we're just starting doing our fiscal responsibility to pay that down the road.

Um is there a percentage of that?

I know you said the 150 that we're pulling is about 25% of our certified free cash.

Is there a percentage that's given or guidance from the state that is sort of a uh a tipping point that they might say, hey, you never want to pull X amount more?

And and given uh I know I think right there's like 1.7, 1.9 billion of of free cash, 601 million of it is certified, which means that's what we can actually draw down from.

Um, if we're drawing down 150, knowing 40 of it is for the annual down payment for OPEB, and the other one, 10 is for um snow and winter management that is happening, BPS shortfalls that have happened.

Um I wonder if there is a how do we repay that and then you know, because you could just say, oh, if that's the safe amount to pull down every year, we could almost say, well, we'll pull we'll take away 25% every year.

However, I don't think that that that takes us very far fiscally, right?

So how is that money then put back in?

And have we budgeted, like at the end of the year, we'll have X amount over revenue that we'll then replace it with?

Is that how it works?

Yeah, so we don't um necessarily it depends on how you close the fiscal year, and so your year-end budgetary balance will contribute to that overall fund balance, which then is kind of the basis for the calculation of your free cash.

Um, so in the you know past couple of years where we've ended the year with a pretty significant surplus, I think in 23 and 24 in particular, um, that helped to replenish our fund balance and then therefore our free cash, and so it's really a function of you know how you end the year and how much of a surplus you have available to then kind of replenish that.

And then also, as I um have mentioned before, they start from a you know DLS when they're certifying our free cash, starts from a point of our available fund balance and looks at our balance sheet, looks at any, you know, receivables, liabilities that we have.

If we're able to kind of recur, you know, cure those receivables, that helps boost our free cash as well.

So it's it's a little bit of like increasing the the beginning fund balance that you're starting with, but also it's a bit of a balance sheet exercise, so between those two things that can impact your free cash levels.

And one more question, uh chair, and and actually I I have to ask this.

Given that, you know, a lot of our budget each year is based on new growth, and we're not seeing a lot of that.

And we talk about the surplus being able to fill in what we pull from free cash over the long run.

Do we have any uh uh equation laid out of you know the forecast of new growth and how much over revenue we might be and and the other things that happen in order to pay back the 150?

Well, I'll call it the hundred and ten, because I know the 40s annual.

So to pay back the 110 and how long, like is that does that happen in one fiscal year?

Like at the end of the year, like we put the 110 back, or does that come in in uh over several years?

And if you're thinking how many more, how many years do you think it would take?

And given right now, what little growth we're seeing, and knowing that that's gonna be a hit on the budget, will it take even longer to put this 110 back?

Yeah, I mean, most likely you're gonna build that back over time, but I'm thinking about how we ended fiscal year 2023 with a overall budget surplus of 192 million, and that was driven by interest income mostly.

That wasn't the federal, that wasn't the ARPA or anything like that.

That was our cash was earning a lot more money because interest rates were so high, and that's really what has driven, you know, really what drove the surpluses in 23 and 24, and now that those interest rates are starting to come down is a is a reason why we're sort of projecting that that revenue is gonna start to moderate a bit.

So I you know, I don't expect that we're gonna be in a high interest rate environment like we were in 23 again, but you you can you know, something could happen where you can replenish it in one year, but it seems unlikely.

So it's probably a a multi-year build back of that balance.

So I I only ask that to highlight that there is risk of if if interest rates are lowering, new growth isn't occurring, it will take longer to pay back whatever we pull down.

So we have to be very careful about what we pull down for and snow being a non-recurring is Counselor Culpepper likes to say, a recurring thing.

Um we hope to, yeah, you say it's recurring, right?

Uh we hope to uh well let's just fingers crossed for no snow next year, I guess.

Thank you, Chair.

Appreciate it.

Okay, and I think one question, Counselor Fitzgerald.

I I think asked, and I I have sort of a addition to that is at least what the guidance from the state would be on the fund on the balance, which I didn't hear an answer, and also my my add on to that is what is the what do Moody's and the rating agencies look at?

Is it the same number?

You know, so I'm not sure um if the division of local services has a particular percentage.

I feel like they must, I just don't know what often.

But we there is a guide guidance like general accounting principles or something like that.

Um, so I I can go back to that.

The city maintains a policy about overall fund balance levels and how much fund balance we should have, um, and that's that that's that larger starting number, that 1.2 um billion dollar figure.

Um our policy is that um that number should be uh no less than 15% of expenses.

We're currently at about 24% of expenses, so we're well in excess of our own policy.

Um, and I'm sorry, the second part of your question was what would the rating agencies look at.

So they they tend to look at that um larger unassigned fund balance number.

Um they're less interested in our free cash calculation specifically.

Um so they they tend to focus on that bigger 1.2 number, and even then they look at it differently, they include some things, they exclude other things.

So it's um, but they're they're focused on that larger number.

Yeah, and I'm just saying, so they're like got like we uh we're we said 15% is sort of the yeah where we want to be.

So does do the rating agencies have the same uh you know number that they're looking for?

Yes, um, so they have said to us Moody specifically this year has said that um uh for fund balance for a you know similarly situated triple A rated city like ourselves that we should be, I think at least 25 percent um of reserve.

So um, and based on their calculation, we're at 30 percent.

Um, so we're in excess of their expectation.

Okay, thank you.

Okay, so we've been joined by counselors Murphy and Flynn.

Uh Counselor Murphy, you beat Flynn uh across the tape there.

So uh you're up next, or do you think?

He was polite and he opened the door for me.

So that's how I got in first.

Um, that'll show up.

Yeah so sorry we were upstairs advocating for the cola increase for our retirees and just wanted to make sure I came down and just listened so I I know my colleagues have asked some questions don't really have any specific questions but thank you for being here.

Thank you.

Okay it's council Flynn's turn okay I'll give my time to call pepper I know we always want extra minutes I only use 30 seconds so if if you need to use some no Karishma do not encourage Councilor Culpepper.

Counselor Flynn you eight minutes.

Thank you Mr.

Chair.

Thank you to Jim and to um the CFO Ashley for being here for the for the work you're doing.

The administration has characterized the use of free cash as fiscally irresponsible or challenging yet the city has relied on it in each of the last three years I believe.

So is there a distinction that we're making specifically when is the use of free cash responsible versus irresponsible and how should the city evaluate the administration's recent use of it such as such as um OPEB.

Thank you counselor so um I before you joined was sharing um guidance from the state the division of local services on their recommendation for when to use free cash and um I'll repeat it uh they say that it is a non-recurring revenue source and so free cash should be restricted to paying for one time expenditures um and that they do not recommend that free cash be budgeted for ongoing operational purposes um I was also um having a similar conversation with counselor Fitzgerald about this and that each year um is the city's longstanding practice to um put forward an operating budget that assumes a use of 40 million dollars of free cash to pay for um our contribution to our retiree health care liability um that's a discretionary choice um we're not on a schedule in the same way that we are with our pension obligation to fund that liability but historically we have made that um part of our budget um I don't think um in my time here we have actually needed to use free cash to fund that OPEP contribution that might be a different case this year um but we have not needed to use free cash to fund that um particular expense we've had other revenue available to cover it um and then just lastly I will say the last time the um the administration the council appropriated free cash was January 2025 for that one time housing accelerator um appropriation was at a hundred million dollars 110 110 million dollars okay um the 48 million dollars is that all for snow and winter management or will it go um to transfer to cover um you know execution of courts police over time what is our final snow and winter management number for fy 26 we spent 36 million in fy 2015 when we had 110 inches of snow in the second coldest month in Boston history how did we spend so much more one decade later with so much less snow yeah sure council flint yeah we we um yeah the it's um 10 years of of changes in labor uh costs uh particularly in the contractor uh realm um it's uh there has been a change in dynamic on the availability for in particular in the snow removal category of places to store snow uh it required um uh sort of the emergency procurement of snow melting operations to make room for the procurement so uh we also had the benefit uh in FY uh 15 of uh FEMA claim um there uh one of the uh we had two major storms uh this winter um the second of which, which was a a named storm uh that unlocked sort of uh there's a whole process whereby the governor petitions declare state of emergency.

Geographically that was more oriented towards southeastern Massachusetts.

So when they finally did the calculation, Suffolk County did not, is not eligible for a FEMA claim this year, so that's one of the point of comparisons, but uh it's it's largely um uh and also events specific uh uh very cold snap between two fairly significant storms, no melting, requiring a lot more removal.

Okay, thank you, Jim.

We were given a triple A bond rating in 2014 when we had seven percent of our operating budget in free cash.

We're currently at 13 percent, and even if we draw down to 450 million, we'll still be at 9% of our operating budget in free cash.

I guess my question is how long can we go in free cash to keep a triple A bond rating?

Um that's a great question.

Um I was uh mentioning that the rating agency is as far as we know are not necessarily focused on our free cash balance that's certified by the state.

They're interested in our overall available fund balance, which is that 1.2 billion dollar figure that we've mentioned before.

Um, and so they've said to us uh Mooney's in particular that similarly situated triple A rated municipalities should have at least uh 25 percent um in reserves um uh uh and we according to their calculation we're at um 30 percent.

So we're we're in excess of their um policy, but it's obviously something we look at really closely and evaluate uh as we're um you know getting ready to be rated and uh making these types of dis you know spending decisions.

Thank you.

I have two more minutes left.

Um does the overspending in snow and FY 2026 change the amount that we need to set aside by law for snow and winter management.

No, we uh we we one of the provisions of uh in Council Weber sort of uh uh read the mass general law that speaks to the ability to automatically overspend one of the the requirements of that automatic ability to overspend is that you maintain the same appropriation as the prior year uh at a minimum.

Um so uh we you know um snow appropriating for snow is not an exact science.

We we try to uh look at a good reasonable estimate of what we can expect for spending uh this year.

Obviously, did not uh meet the same pattern that we've achieved in the last you know um five or six years, so um we I think uh we've we set off uh five of the last six years had been um with a surplus, so um, but I think um uh uh you know it's it's a reasonable estimate to have for coming year of for snow removal costs.

Okay.

Do we have any revenue numbers through uh May 1st?

For the current fiscal year revenue numbers, I think we have them through um March 31st.

Okay.

Are you able to provide those?

Uh we can we can.

Yeah, we I think we can provide them to the committee.

For the chair, yeah.

I think publicly available.

Oh, yeah, yes, we will get those.

Okay.

Then maybe my final question is over the last several years, excluding last year, but when the city doesn't use all of this snow budget.

Tell me where physically that money goes into, and how many how much money has gone into that part of money based on just say the last four years or the exception of last year.

How much money did we put into back into the city uh city coffers?

It's um so you know one year, FY22, which was that that fairly large, that was the winter storm uh Keenan that it hit, but so if you net that out, I mean we were returning, you know, uh one or two million dollars every year, okay.

And then uh in FY22, we we spent about seven million dollars, and that was with a um FEMA claim that for that we were eligible for that that major uh F uh calendar year 2022 storm.

Okay, Mr.

Chair.

May I ask one more question?

Yes.

Okay.

Um many of the people or many of the people that plow this the snow, move the snow at contractors that the city pays.

Have we paid all the contractors to date?

I believe Streets is going through a process there.

It did require some contracts to be amended.

So I think the vast majority of the contractors have been paid, but there may be instances where they have to like formalize a contract change in order to make those funds.

Are you just talking like one or two first?

I would defer to streets by it's in that order of magnitude, yeah.

But for millions of dollars or for uh I think it's uh, you know, within the small millions of dollars, not you know multi-million dollars.

Well that's that's uh um an important information that I should know though, is if there's outstand basically outstanding bills that we haven't paid yet.

Um, we have we've captured within this projection all of the all of the that's projected and um well for the chair, could I get a list of the uh unpaid bills that we haven't um we haven't processed yet?

Okay, okay, yes.

Thank you, Mr.

Chair.

Is that okay?

Uh thanks.

A couple questions from the chair.

Uh then we can go to uh public testimony.

Is anyone here to give public testimony?

Okay, um so I I guess just in terms of uh the year-to-year stuff, is it possible to do a revolving fund for this?

So it like, because it seems like we we need the money every five, six, seven years.

I don't, you know, um have we looked into that?

Um yes, and this is something that the mayor has expressed interest in exploring the possibility of doing a snow reserve.

Um so there are municipalities do have the option to create you know a special purpose stabilization fund.

Um so we are exploring kind of what it would what it would take to both establish that and how it would operate.

Um, it would you know probably require um the mayor and the city council to make a choice to appropriate money into it, a choice to appropriate money out of it.

So um there's some kind of pros and cons of doing it that way, so we're it it's possible and we're exploring it.

Okay, um is there state reimbursement for uh like a snow emergency?

No, no, okay.

Not unless they, you know, we're you know, Jim talked about the FEMA, which we've gotten in the past, unless the state were to appropriate money for it.

There's not any kind of recurring pot of um funds made available.

Okay, uh let's see.

Is it comparing to 2015?

Is there was there any change in the way we've contracted?

Were there more contractors?

It was more competitive in 2015.

Yeah, um we've yeah, it's a three-year cycle on reprocurement, and and it's it's sort of priced out on the type of equipment and hourly rate on the type of equipment.

Um that's the vast majority of the uh public works vendors, um, schools and parks in the MLH might have a slightly different model, but probably similar in nature.

Uh those rates have obviously grown uh over over time since 2015.

Um also the amount of city workforce we've been just because of um challenging you know challenges in hiring folks with CDL license uh licenses and having them uh our uh internal workforce is not exactly the same as it was in 2015 um to be able to man city owned vehicles.

Um the goal the goal would be to try to and there is a strategic approach of like uh storm response to like activate city resources before you call in contractors, but I I would defer the streets on the exact approach.

Okay, um, and then uh just uh I think nearly the last thing for me.

So we're we're we spent time talking about DLS and you know non-recurring versus recurring.

So um I I think I differ uh uh with Councillor Copeper on the snow being a recurring thing, but um, can you just distinguish between so using the um free cash for the snow removal appropriation, like looking at the DLS guidance, distinguish between snow removal, the housing accelerator, and youth jobs uh and help us understand or help me understand uh how that rule would apply to each of those or what your thinking is on those.

Sure.

Um so you know, after the counselor asked the question, I was thinking, well, yes, we do acknowledge that snow is a recurring expense, which is why we every year in our budget budget, you know, 22 plus million um for that cost, but what is not common is for us to spend significantly more than that, upwards of 70 million.

So if we were kind of historically spending 70 million dollars on uh our snow removal, which we are not, um then I think that's the difference, right?

It is it is not um and the the last uh five or six years of data show that we're you know more or less appropriately covering the recurring cost of snow within our operating budget, and so this kind of one-time extraordinary amount over and above that would be appropriate use of free cash because it is truly um extraordinary in one time in nature.

Um the other housing accelerator and youth jobs.

Yep.

Uh another example of a one-time program where um it is intended to be kind of a a one-time seeding of a program that will revolve, and so there's no need to continuously refresh that appropriation.

Um so that is a a one-time program that does not require additional resources, and then the youth school year jobs, that has been a program that has been continuously funded in the city's uh annual operating budget for the last um several couple of years, um, and there's an ongoing expectation that that you know that those recurring costs will continue to be funded, and uh so if you were to fund that with a one-time source, that should not materialize in the following year, you would create a mismatch in that expense and create a cliff um in the city's budget.

So that is unique in that it is a uh the expectation is that it is a recurring expense for the city.

Okay, um, okay.

Thank you.

Uh let me see um and just I in terms of uh I I guess we talked a little bit about the snow melters and um I thought that I I that there was a debate between like buying them and having them maybe sit around for the last eight or nine years uh as opposed to leasing them, like what's the how do you how do you like is it if you add in can you do the math like uh do we save money by leasing or do we is it cost yeah no I I don't have that sort of cost benefit analysis, but it it is that is the the rent versus buy um analysis that you would you would do.

Yeah, because I I think um infrequent use sometimes probably is not a good sort of maintenance um model.

So, yeah, you know, if you you didn't use them for seven years, that you know the reliability of them actually being workable um might might be challenged.

Okay.

Okay, uh, I guess last question is so after sp uh you I think you identified it was a hundred and fifty million that's coming that is currently or uh budgeted where if we pass these appropriations coming out of free cash and next year's OPID.

Um is there how do you anticipate that impacting like the review of our reserves?

Uh are we getting what the percentages are gonna be and um based on our revenue projections?

Um we we haven't done the calculation of our reserves.

I think we would wait until year end because there's again a lot of um other inputs kind of into that.

Um but that is definitely something that we will be monitoring as we close fiscal year 26 to get a sense of what our reserve balances will be um and then be thinking ahead to next spring when we go out for ratings kind of how we're being viewed.

Okay, thank thank you.

We've enjoyed my Madam President, Councilor Braden.

Um I'm giving people eight minutes uh so eight minutes, I'm sorry.

Do you do you want eight minutes to gather your thoughts?

How about this?

We're gonna take public testimony, and then uh if you have any questions, we'll come to you.

Okay, we've got a uh after hearing from about a hundred folks uh last night.

I'm relieved to say there's one person on the list.

Uh so uh, Mr.

Maynard, uh, you don't get eight minutes.

I'm gonna give you two minutes uh and whenever you're ready, introduce yourself and then I'll start the clock.

Thank you.

Uh my name is Gregory Maynard, and I'm the co-founder and executive director of the Boston Policy Institute.

Snow and police overtime are perennial sources of overspending in Boston's budget.

So why does Boston have this extraordinary FY26 deficit?

The answer is overspending on health insurance.

This isn't BPI's analysis.

In the letter introducing the very supplemental appropriation that is the subject of this hearing, Marewu wrote, quote, the spike in health insurance costs for city employees was a current year issue.

That raises the question, why was Boston's FY26 health insurance spending forecast so inaccurate?

This is a question that the city hall officials at this hearing, budget director Williamson and CFO Grafenberger should be able to answer, according to municipal health care experts.

For a self-insured city like Boston, the process to make the following year's health insurance forecasts starts in the fall.

Outside vendors work with city officials to analyze the last two years of medical and prescription cost data, then add the current trends.

Those projections are provided around Christmas, and then numbers are picked by February.

This work is well documented with slide decks and memos, and often includes presentations to bodies like the public employee committee.

Unfortunately, even with all that careful preparation and analysis, FY26 wasn't the only health care spending estimate that was wrong.

Something also went wrong in FY27.

The reason we know that is because BPS was forced to add 16 million dollars to its health insurance spending on March 25th.

March 25th, for those who don't know, was the day the school committee voted on the BPS FY27 budget, almost two months after BPS first issued its budget on February 4th.

That last minute addition, especially given the FY26 deficit, should be a flashing red light for this council.

Unfortunately, this council does not seem to agree.

The council did not hold an FY27 budget hearing on either health insurance costs or the people operations cabinet, which oversees the city's health insurance program and has a 337 million dollar budget.

Something seems to be wrong with Boston's health care spending, and this council needs to figure out what it is.

Thank you.

Okay, Councillor Braden.

Good to see you both.

Um sorry for my lateness.

I was um in the district.

Um I'm just wondering, uh the snow um supplemental request for snow removal is 47 million.

Um does that mean we went over our budgeted amount of what was 20 million?

What do we budget?

And then is that 47 over and above what we'd budgeted?

So does that mean we spent 60 67 million on snow removal?

Yes.

And do we have a breakdown?

Like is anyone and looking at that, like really getting into the weeds on that one?

Because it seems and I know it was what was it?

40 inches of snow?

Some 50 inches of snow.

And I think the problem was we didn't nothing melted, so it stayed around for a long time.

But 67 million for two storms seems pretty excessive.

Um any thoughts on that?

Um yes, so we are definitely uh working very very closely with streets to understand the drivers there.

Um, and um in our presentation earlier, we talked about how those two major winter storms were of course, you know, a huge driver.

You mentioned nothing melted.

Um, but aside from those, there's you know, 20 other winter weather events, right?

Like little things, you know, freezing rain, they have to go out and you know salt the roads, right?

So there's the big storms, but then there's kind of that those kind of day-to-day things that add up as well.

Um, and I think you know, the big difference this winter too is it was much colder than expected, so nothing was melting.

We got no assist from the you know the weather.

Um, so yes, I think there's uh huge opportunity going into next winter to work closely with streets to understand the drivers there, and it is work we intend to do.

Okay.

Um then uh you know, we underspent our snow budget for several years in a row.

Like, we have this is the unpredictability of climate change.

Um we underspent the is there a way that um the money that we underspend do do we have a snow day of that?

Do we have a snow day fund or how do we manage that?

Unpredictability of it?

We don't, um, but it is something under state law, um, a municipality can create a special purpose stabilization fund, and that's something that the mayor has uh talked about.

And so Jim's team uh and myself are exploring what it would take to create one, um, how we would administer it, how many would go in, how many could come out.

So it's uh a possibility that we are exploring.

Um I know we're gonna talk about the BPS supplemental this afternoon, is that correct?

Um, and then I'm just curious about in terms of the breakdown of the cost for snow removal, uh much of it is um you know, city labor versus contractor contracted services.

Is there a breakdown on that?

Yes, and I think we've um and I'm sorry, you may have to do that.

No, it's okay.

Um, we I I think it might have been counselor Culpepper asked for a similar breakdown, and so we um committed to a false fighting that.

Excellent.

And um did any was there sort of um uh any vendors increase their uh cost or their their charges if you went above a certain amount of snow?

Is that was there any any sort of um yes, Councillor?

Uh it's largely the biggest uh contract, it's an hourly request on the type of equipment, so we can change it's been on a three-year cycle, so FY25 was a contract year change in the streets you'd say the rates for those uh similar pieces of equipment went up significantly in with the contract change.

So uh well different, it's it's different rates per type of equipment from the smaller truck to a 10-wheeler removal equipment, front end loaders, all of it have different price points.

Do we have any lessons to learn from other places like I know Montreal gets a lot more snow than we do?

It's a lot colder.

I've been there in April and it's freeze you frees you to death.

But um do we have any lessons to learn from other places that obviously get like places like Buffalo or Montreal or places that get more snow?

I think it's it in order to invest in equipment that you would only use every five years is probably not the best investment, but any thoughts on that?

Yeah, it's a good question.

I think you know, Jim and I might defer to the streets cabinet and the team that actually does the operations on that, but certainly something we can talk about with them and um bring back to this body.

And um in the letter from the administration, uh it was described as a one time cost, uh, an extraordinary one time cost.

Uh what is it is it actually extraordinary?

Like, is it extraordinary might be something that happens once in 20 years?

But you know, I I don't know the unpredictability of our climate is is really a challenge, but um do we have what sort of understanding do we have of of an extraordinary one-time cost?

Yes, I mean if you look at our um snow expenditures over the last, you know, you know, five, ten years.

Um, um this is definitely an outlier year.

Um Jim was mentioning earlier, you know, we typically return, you know, one to two, you know, with the exception of you know, uh FY22, which was a major winter storm as well.

Um, we're typically returning one to two million a year.

Um, that's left over at the end.

Yes, exactly.

So um that's kind of been our recent experience.

So this, you know, relative to those years is extraordinary to have um such a high expense, and you know, it's not our expectation that that continues, but should that be our you know uh reality?

We'll obviously all have to work together to adjust the amount going forward, but hopefully that is not the case.

We have very unpredictable reality these days.

Um just in terms of um supplemental.

I know we have to draw from uh free cash to balance the budget at the end of the year.

Um, and then it's it's like a one-off.

What are we doing to make sure that we don't have to draw on pull on supplementals um again next year?

Yeah.

Um I think this you know, conversation about revenue forecasting is part of it as well.

Um, you know, I think we have um for 27, you know, really were thoughtful about our revenue forecast to make sure it was sufficiently, you know, there was sufficient revenue to balance budget, but also you know, conservative enough so that we have some flexibility to absorb um any extraordinary events like this.

I mean, of course, like you know, there's gonna be things that you just can't foresee, right?

So we we we wanna make sure that we're being thoughtful in our revenue projections such that we have some flexibility to absorb this, um, and we think we've struck that right balance, but you know, we'll see what the next year brings.

And we're really fortunate that we've um had many good years and we've been able to build reserves so that we're in a position to be able to do this.

Many municipalities in Massachusetts is a much more dire choice.

Um their reserve levels or free cash levels are running really low, so um we're fortunate that we're in a good place to be able to deal with this um in this year.

In a situation where we have extraordinary weather events like this, like I know further south in Taunton and the South Shore got hammered.

Like they got 50 inches of snow in one storm.

Um they does the state have any any help for municipalities in those sort of circumstances?

Nothing normal and recurring.

Um, you know, they could make a choice to appropriate funds in their budget to cover these costs, but there's no like recurring program.

Um sometimes there's FEMA reimbursement available, and some of those South Coast towns were eligible for FEMA reimbursement for the um February snowstorm, but we unfortunately missed the rate of accumulation by like an inch or something.

You know, we were we were just shy, and so we weren't able to draw down any FEMA reimbursement for um any of the storms this year.

Okay, thank you.

Okay.

Uh thank you.

Uh Councillor Flynn, if you have some follow-ups, just you know, for the record, uh anyone watching online.

We did hold a pre-budget hearing on health care spending with uh Chief Grafenberger, I think Mr.

Williams Williamson's here as well as Alex Lawrence to talk about health care spending uh and uh generally we don't hold a hearing just with human resource services in our budget process because they're you know, they're budgeted pays for the health insurance and they're basically paying the payroll of all the departments that were coming before us.

So um just if anyone wants to know what what our thought process on that was, can you just clarify before we get to Councillor Flynn?

So I know there's some negotiations with the PEC about GLP ones and things.

Do we have to revisit that uh going into next year?

What's the plan?

Yes, so we are um in the middle of a seven-year contract um for health uh plans with our public employee unions, um, and we are in the process of negotiating the successor, the next successor five-year successor agreement, um, which will go into place uh for FY28.

So we are in the process of um that negotiation now with our uh union partners, and um it's you know, those types of issues are on the table.

I guess Michael, I thought something had been negotiated with like utilization management.

Is that in effect?

Is that in a fact, yeah?

Yes.

I mean everything, you know, we were negotiating the successor contract, so I guess anything can change in that in that next contract, but we were able to work with um the unions to essentially reopen the contract that we're in currently to provide for that utilization management, which yielded savings, yes.

Okay, thank you very much.

Councillor Flynn, uh four minutes.

Ashley, the negotiation with the unions on that issue.

Who is the lead point person for the city?

Um it's a group of us.

Um it's uh shared um negotiation with the finance cabinet um and the people operations cabinet in close collaboration with um uh the labor relations team.

Will Mandarini?

Um Renee.

Oh, is Lou part of that?

Um he's part of the team, but yeah, it's a it's a large group between finance and people office.

Um I asked a question, I don't think I received the answers at that hearing you mentioned about health health care uh for city employees.

The month-to-month spending in FY26, um, are you going to provide that to me?

That's the re information I request to see how much it increased each month.

Yeah, I'm uh if you I can pull up, I think we we did get your um request, counselor Flynn.

I uh believe we responded, but I'm I'm happy to pull it up.

Okay.

Um, so how much did we spend on health insurance for city employees in FY26?

For six months.

So health insurance, the uh FY26 appropriation is 250 million uh 307,372.

Is that encoding BPS?

Uh that uh actually BPS budgets uh for their own health insurance.

Well, but add that in, Jim.

How much is how much did BPS?

Uh I don't have BPS as health insurance, but hold on one second, see if I can find it.

And then part of that, Jim, how much did we overspend?

I I don't I think that caught us off guard.

Um the weight loss drug.

Um, but if we if we were looking at the month to month spending closely, we would have noticed the price um increase going up significantly.

Is that is that accurate?

Yeah, so uh BPS is FY26 uh health insurance budget was 134 million dollars.

Okay, part of the supplemental that you're being discussing this afternoon uh helps cover the overage of that for that account.

But were you were you looking at each month and seeing how it went up?

So you knew right away the the what was going up, right?

I think it's um for schools they they actually do their their own projection and their payrolls are not necessarily as even as as say city department given the summer payrolls and the like, but uh through the fall they were identifying um a health insurance exposure and it sort of came to light um you know as as we approached early December immediately.

It was part of that larger um uh shortfall when they enacted spending controls in November near to December.

Okay.

Um but you are able to give me that month-to-month spending.

Yes.

Uh I do remember there was some uh reports we might have already done it, so um sorry I I I believe we got the month to month spending.

Okay, it was uh shared with your office.

I'm just when when we received it, uh, still waiting for that to come through.

Okay, um, but uh and and anything do you have any follow-ups?

Yeah, wasn't there wasn't there an opportunity maybe for, and this is something I've recommended, but having BPS um coordinate and and stay stay with the city of Boston as part of some of the streamlining process of health insurance, so we're all kind of under the same system that might save money.

I know that's something the teachers union wouldn't likely support.

I think it's seems likely the mayor's office would support something I've recommended.

Isn't that an opportunity for us to save money?

Um so the way we budget for health insurance each year, and we you know, between the city and BPS, it's really formulaic where we um take how many expected you know members we have and then the you know expected rate, and so it's it's really there's no there's not necessarily any economies of scale to be gained by combining them because they are sort of created as one.

We're all under the same agreement.

Um we just put you know the the budget for BPS health insurance in that overall BPS budget.

So from what we can tell on the finance side, there's really no um economies of scale to be gained by combining them all on the city side, um, because we you know we we give that budget to BPS based on the formula of what we expect each year.

Okay, that's that's not something I support.

I want us to combine them.

I think it does save the city uh money if we put it all under one umbrella instead of instead of um doing two separate separate um systems.

Um I think the teachers union that's always been supportive of the mayor supported, and I I thought the mayor supports it as well, um, but you're saying we can't get that done.

It's not that we can't get it done.

I'm just saying that I don't uh from what we've been able to look at, there's really no savings to be gained by combining them because they are currently the same system.

We just split the appropriation into two places.

So there's not two systems, there's not two different, you know, health plans that you know people are being managed under.

It's really just taking a central appropriation, budgeting it across two locations.

And then my f my final question I was downstairs um testifying in support of uh city re city retirees and advocating for a little bit of dignity and justice for retirees, they're not making a lot in their pension, they work hard, um, they're not they're not getting wealthy, they're struggling to make ends meet.

Is the city going to support them in their advocacy for a color, um a cola increase of three percent and also the the extra support that they're they're requesting as well.

Um so we will review the request, but what I will share is that particular as it relates to the cola base.

I think the ask has been to increase it by three thousand dollars.

Yeah, I believe so, yeah.

Um, and so the uh impact of that would be a $90 million dollar increase to the unfunded liability in the pension system.

Um, and should we choose to try if we were going to try and stay on our schedule of being fully funded by 2028, it would require a significant increase in the city's operating budget to fund that didn't this didn't the city um 2028 didn't that wasn't it um didn't they re readjust that recently?

No, the funding schedule is still to be funded by 2028.

But didn't the mayor support um support the colour base and the call or increase that's what the retirees told me that they they got a commitment from the mayor that the mayor would support them and in the city administration now is it doesn't seem like they're in in support of it.

Maybe I have that wrong, but is that is that a fair um analysis of it?

I'm not sure about what you know the mayor has said to the retirees directly, but I know that we have supported the COLA increase over the last couple of years at three percent, and in fact, I think it was in 2023 we voluntarily increased it by five percent.

So we went above and beyond um in 20, I think it was 2023 and have supported the the three percent cola in other years, but the cola base, um, given again the significant increase to that, you know, speaking as a CFO, um significant increase to the unfunded liability and the very limited window by which we would have to actually fund that unfund new unfunded liability, it would mean you know a forty-five million dollar increase in the operating budget for FY27 and 28 in order to meet our schedule.

Right, no, I understand that.

Um I'm I'm asking for a little bit of dignity for um city retirees.

I've I've seen them uh they've been in the city, they've been working since the 1970s.

Um they weren't getting paid much back then, and they were plowing our streets, they were educating our children, putting out fires, helping the elderly, and uh they didn't have big salaries.

I I look at them now and they're barely making ends meet um in in this city.

The high cost of housing, the h the the high cost of food, they they're telling me that they're they're barely making it, and many of them that own their own homes um are struggling to pay their um tax bill as well.

I'm just asking for a little bit of consideration for them.

I'm not asking for them to be wealthy, I'm just asking for dignity and retirement.

But um, I guess that's a conversation for another day.

Thank you, Mr.

Chairman.

Okay, thank you.

And so just looking at the uh information requests from the uh the health care hearing.

Uh it I the requests we have down for you and for there was no month to month, it was year over year spending.

No, mine was mine was month to month.

I'm just uh so based on uh our our question to them for on your behalf was uh was year to year.

No, we have that's we can get month to month.

Mr.

Chair, that's inaccurate.

I specifically asked month to month.

Okay.

Well uh that's if if it's month to month, that's how you will know if if the cost is going up significantly year to year, it's too late then now.

You need to look at one month and the next month and see how much the percent increased or decreased, and that's how you factor things in.

Uh, but I specifically asked month to month.

Okay.

Well, uh, we will get the month to month.

That's a big difference month to month in in year to year.

I agree.

I so uh our I just I just want to be I just want to be on the record that I specifically asked for that and I and I'm still waiting, Mr.

Chair.

Okay.

Well, they they responded to our request for year to year, and we got that.

But that's not but that's not what I asked, Mr.

Chair.

I uh yes, if I I apologize for the miscommunication.

Uh we will get the month to month uh data.

Uh okay.

Uh Councilor Braden, do you have a follow-up?

I'm just curious about the the health care budget for um BPS.

How many million did you say it was?

134 million, 143.

134.

And and this is technically it's it's like a split, it's it's the same program as we as we have uh split into two pieces.

So bringing that into the city to put it all in one bucket would mean that you would you would you would take that 134 million dollars out of the BPS budget and it wouldn't really it wouldn't really move the numbers uh because you'd have to take the money out of the BPS budget, correct?

Yeah.

Okay, that's good.

Thank you.

Okay.

Uh thank you very much.

If that's that's all, uh counselor Flynn.

Uh yeah.

Uh okay.

Well, I just want to thank thank you very much.

Uh um and uh for all this information and uh we'll uh process it and and uh bring this up.

I guess my my question is when does this have to be approved uh to prevent further harm harm?

Um uh by the end of the fiscal year, um, June thirtieth.

Okay, okay.

Well thank you very much.

Uh this morning's hearing, and I look forward to seeing my colleagues this afternoon for BPS.

So this morning's hearing is now adjourned.