This was the first of three budget workshops for Fiscal Year 2026-2027, convened by the Middletown Common Council. Mayor Eugene Ocera delivered an opening overview of the city's fiscal challenges, followed by presentations from eight departments: Arts & Culture, Probate Court, Youth Services, Health Department, Fire Department, Emergency Management, Transit District, and Russell Library. Council members questioned department heads on proposed budgets, staffing, and operational needs. No votes were taken; the workshop was informational to inform council decisions.
This meeting is being recorded. Good evening, everyone. Please rise if you're able to do so. Councilwoman. Let's see. Councilwoman Spitola, please leave us in the Pledge of Allegiance. Thank you. The United States of America and to the Republic for which it stands. Our nation under God, indivisible, with liberty and justice for all. Okay. So you're all here for the first of uh three workshops. Uh today is Monday, April thirteenth, and we have our mayor who is with us, Eugene Ocera. He's sitting out in the audience, so we can't see him on camera now. We have eight departments that will be presenting this this evening. Along with the mayor, we have a subdepartment, arts and culture, probate court, youth services, health department. I know that Director E. Lac will be online, fire department, emergency management, transit district, and Russell Library. Okay. Thank you, Councilwoman Barkwell, and it's a pleasure to be here. And I have to say, this is the first time I've seen this room set up this way with the with the view of Court Street and the river, and I think this is the way it should always be. Okay, thank you, Mayor. Extra special. So let me begin um this process. I think it's important that you allow me to read into the record what what uh uh variables um are so important uh to consider when we propose this budget, the mayor's budget, because this was an extraordinary, extraordinary um set of variables. So I'm not gonna read my full narrative that you all got copies of, but I think it's important that um you allow me for a second to read into the record you know why we we are where we are. When I took office in uh June of 2025 as acting mayor, I had the honor of becoming your mayor following the November 2025 election. One of the first issues faced before me was the looming uh projected deficit driven by several fiscal shocks occurring at the same time, each reinforcing the other. But they are very real, and they require clear and honest explanation. Let me just point out that if the council and I just wanted to move this budget forward, a status quo budget that with the existing revenue we have this year into next year. We would have to we would be asking um for a five mil increase because there is a 14 million dollar deficit between the revenue we have this year and what we need for next year. Let me explain how that happened. Over the past two years, we have experienced revenue erosion combined with significant spending pressures and persistent inflation, creating a very difficult budget environment. The major factors have been a minimal growth of our grand list, something Middletown has not seen in recent memory, because property taxes, as we all know, generate the largest share of city revenue, and even small changes in our grand list have a significant impact on our budget. Despite a slight change in the SP bond rating this year, going from triple A to A plus, we entered the 2627 budget cycle with a fundamentally sound fiscal foundation, but there are intensifying cost pressures. Even with this adjustment, our bond rating remains rare amongst mid-sized Connecticut cities who do not have the advantage of large suburban tax base, which reflects the Middletown's longstanding, fiscal discipline, responsible debt management, strong reserves, and our combined commitment to meeting pension obligation. However, the convergence of several factors that include rising health care costs. Let me point out the city this budget calls for the city side, a 16.8% increase in our health care costs. On the BOE side, 8.8. The BOE is state insured, we're self-insured. I was just talking to our director of finance. This is an unusual year because we see across the state, these numbers are not coming down. Usually they start to trickle down. It's like a game that insurance companies play, perhaps. I'm not accusing them of game playing, but it seems to always come down. It's not coming down. There's also, of course, an exhaustion of federal relief funds, minimal growth in our grand list. Labor costs have increased during this same period. In mid-2025, five of the seven major union contracts expired. At the same time, include and that included local 466, UPSU, the police union, the Middletown Schools Administrators Association, the Russell Library employees. Only our firefighters contract, which runs through 2027, remain in effect.