All right.

Good evening, uh ladies and gentlemen.

And welcome to our first budget hearing for the fiscal year 2027 budget.

Um, like all city uh council meetings that this meeting is being live streamed and recorded.

City council and committee meetings can be viewed on the City of New Bedford's homepage under quick links, then meetings.

All right.

So at this time, I am going to uh have our CFO come up, Bob Ekstrom, give a little presentation and overview um of our budget.

But uh before that, I just wanted to uh to my colleagues, my new colleagues and uh those uh older colleagues uh uh counselors, uh that uh the finance team does a great job at um uh getting turnarounds to our questions asked here in these meetings.

So uh I thank them.

Uh we all thank them for their speedy work, uh working with our department heads.

Uh Superintendent O'Leary is here, and uh very uh happy to uh work with all of them and get those turnarounds quick on uh question answers to our questions.

So I thank them for for that, Sharon and Bob.

Thank you guys.

Uh so I'll call up Bob at this time.

Good evening, counselors, and welcome to 2027.

I guess I'll be the first one to uh to wish you a good new year here, about six months earlier from the real thing.

It's the nature of this job though.

You uh we just get finished with fiscal twenty-five and we're starting fiscal twenty-seven's budget.

I'm really in twenty-six, and sometimes I forget that.

But uh as you can gather, this is uh this has been a bit of a challenging spring.

Uh you've uh you've heard some of the uh you've heard the mayor speak uh about a starting balance, which is probably the greatest gap that I've seen in my twelve to fourteen years here.

Uh we started off with about thirty-two point thirty-two and a half million dollars.

Starting gap of thirty-two million four hundred and ninety-two thousand.

The mayor had alluded to this uh in his uh presentation last week.

Uh the highest I've ever seen before is about twelve million dollars.

However, I think that was back in the Ari days, and he may have not counted some of the requisition, uh some of the requests that departments submit for enhancements such as for new programs, uh new initiatives.

And I did include that because it's all it's all on the table for us to consider.

So obviously uh we're not state state law requires us to produce a uh balanced budget to you.

So to get from 32 million four ninety-two down to a balanced budget took a little bit of work this year, as you can gather.

So first of all, uh we uh we had to pretty much decline any requests from of a from our department heads for anything new this year other than their existing baseline budgets.

I'll tell you briefly what baseline means.

Okay, baseline means all your existing personnel, but they get any kind of cola increases or uh step increases that they were deserving under the unit C provisions or under their own collective bargaining agreements.

It also includes any kind of contractual increases, same services, higher prices.

Solid waste is a good example.

Uh, capital waste services had as had increased prices in years two and in year three.

That is a baseline cost.

That increase uh from year two to year three is baseline.

Other than that, we had to eliminate, as you can as you can see, seven seven and a half million dollars.

That's a lot of no's to have to tell our department heads who worked quite tirelessly themselves in trying to put together these plans.

Now part of that is uh part of that no is is no not right now.

And for some time now, for the three years, we've been pushing all of the capital requests off to the CIP program.

Uh we we've took funding of capital improvements out of the budget when I first came back as CFO.

The only exceptions that you see in your in your budgets now are for small reserves for like, for instance, for IT.

They don't know when machinery is going to break, they have to put a new server in, something goes wrong, something like that.

So we had uh DPI, fire, police, D FFM, IT have small reserves for capital.

And we're also getting rid of the last of the old lease purchase arrangements that uh that we used to use quite frequently for our for uh for purchasing vehicles.

It's a tool that I do not like very much.

Uh it comes with a very high implicit interest rate.

So what we did was we pushed all the vehicle purchases over to the CIP now.

So bonding it in the CIP is in the range of, depending on how long we go out, it's in the range of about 4 percent, which is about half as much as we were looking to pay in lease purchases.

So after all those no's, we had uh some back and forth with the school department.

We've made an adjustment to the school budget once again this year, 4.5, almost $4.6 million.

And I'll explain that a little bit more later.

Uh but basically it comes down to um two line items.

One is under the net school spending formula for Chapter 70, and the second one is for other net school spending expenditures uh that are not eligible under the net school spending formula.

Finally, you're gonna see later on, I'm gonna show you the individual actions that we took, but uh the city administration, department heads, we all got together, we met several times.

In fact, seven councils were involved in some of our meetings where we presented uh some of our findings to date, and we eliminated seven point seven million dollars from existing baseline budgets on top of all the other cuts that saying no to to uh to the uh the any enhancement requests and the four point six million dollars to school.

We said no to seven point seven in city costs as well.

Uh so this final uh number gets us down to a to uh to a levy that uh um I apologize, that second arrowed bullet, that 12 million seven hundred twenty-eight is actually net.

The actual tax increase was higher than that, but we eliminated some of our so-called one-time funding.