2026-09-15 - Municipal and Legislative Operations Committee

0:00All righty.

0:04>> But I'm also determined to say

0:06something.

0:08>> Ready to go.

0:09>> Agreed.

0:15>> Good evening. [clears throat]

0:18Uh we are doing the standing committee

0:21of uh [clears throat]

0:23um municipality and legislative

0:26operations.

0:27Um today is what's the date of today?

0:3215th of September 2026.

0:35This is the standing committee meeting.

0:37And with me I have uh uh councelor at

0:42large

0:43Gary Rosen to my right and councelor at

0:46large Morris Bergman to my left. We also

0:50have u the chief financial officer Tim

0:54McGoti with us. And uh clerking today is

0:57uh Claire Robins with us. So with that

1:01uh Claire, would you uh go ahead with

1:04the virtual attendance call in

1:06information please?

1:08>> Through the chair, prior to doing so, if

1:10I could just take a roll call.

1:12Uh councelor Mitra,

1:15>> yes.

1:16>> Councelor Rosen,

1:17>> yes.

1:17>> And councelor Bergman

1:19>> here. Uh item 1A, pursuant to chapter 20

1:23of the acts of 2021 and in order to

1:25ensure active public engagement, the

1:27city of Worcester currently allows for

1:29both in person and remote participation

1:31at all city council and standing

1:33committee meetings. To partake in the

1:35meeting, you may attend the meeting in

1:36person here in the Esther Howland

1:38Chamber of City Hall or follow the link

1:40on the city's website to join via Zoom

1:42or dial the direct line. If you join a

1:45Zoom meeting by dialing in with a phone

1:46number, you may raise your hand by

1:48dialing star9. The phone number for the

1:50municipal and legislative committee

1:52operations meeting is 1-6468287666

1:59with the passcode or the excuse me the

2:01access code of 161499501.

2:06I'm also going to read an important

2:07notice to residents. Please be aware

2:09that our office has been notified of an

2:11ongoing scam involving the impersonation

2:13of city officials and departments.

2:15Scammers are fraudulently requesting

2:17payments be made for planning and zoning

2:19permits as well as city council

2:20petitions. All official emails regarding

2:22your petition will come exclusively from

2:24an atwormma.gov

2:26email address such as

2:27clerkworestermma.gov

2:30or via physical mail on the city of

2:32Worcester's official letterhead. Any

2:33legitimate hearing letter will always

2:35include specific application details

2:37along with the scheduled hearing date,

2:38time, and location. The city of

2:40Worcester will never request payments

2:42via wire transfer.

2:49I [clears throat] would like to go to

2:50item number two, approval of the

2:52minutes.

2:54>> Roll call.

2:55>> Councelor Rosen.

2:57>> Yes.

2:57>> Councelor Bergman.

2:58>> Yes.

2:59>> And chairperson councelor Mitra.

3:00>> Yes.

3:05We will be

3:07talking about uh item number 3 A and B

3:11and which were on hold for for the

3:14meeting of April 14th and we will talk

3:17about that but uh our uh auditor Mr.

3:22Robert Sterns is not here but uh chief

3:26financial officer uh Tim McGirthi has

3:29agreed to make that presentation at

3:32least the item number 3A which is

3:35transmitting an annual report concerning

3:37the other postmployment

3:40benefit which is OPB trust fund. So with

3:44that uh I would request uh um Mr.

3:48Mordisu, please help us with the report.

3:52>> Thank you, Mr. Chairman. Um, and I speak

3:54as a member of the other postmployment

3:56trust board. Um, there are nine trustees

4:00that are responsible for the management

4:03of the funds. The OPE trust is an

4:07irrevocable trust established under Mass

4:09General Law Chapter 32B section 20. And

4:13the trust is created and intended to

4:16support retirey health insurance. Um the

4:21city like all cities and towns in the

4:23state in Massachusetts is responsible

4:25for providing support to retirees that

4:28have vested that are part of the pension

4:30program uh for their health insurance

4:32needs. Similar to the city's current

4:34health insurance program, we cover 75%

4:37of a retireese's health insurance, which

4:40the the retiree covers the other 25%.

4:43Um, the uh city currently is not

4:47obligated under the law to put monies

4:49aside for that obligation. However, we

4:53do so through three different methods.

4:56Um, number one is through the budget

4:59process. We put an amount equivalent to

5:01about $1.2 2 million in FY27.

5:05Um that increases that amount increases

5:07about 10% a year. Number two, about 30%

5:11or 30% of our free cash at the end of

5:14the year is utilized and deposited into

5:17the OPED trust. And number three, a

5:20newer contribution component is a 1%

5:24contribution from new employees uh from

5:29um various staff. It probably covers

5:32about 60 to 70% of the staff. H actually

5:35I'd reduce that. I'd say it's probably

5:36about 40 to 50% of the staff across the

5:39city. Um it's all city unions and all

5:42city staff, municipal staff and most

5:45public school staff except for the EAW.

5:48So recognizing how large a component of

5:50the EA of the schools personnel are EA,

5:54those are the only positions not

5:55covered. So any position at the city

5:57side on turnover will begin

5:59contributing. Um this report is required

6:03under the law that the uh trustees

6:06submit a report to the city council

6:08updating on the status of the trust. The

6:11good news is that the trust has grown

6:13significantly over the last number of

6:15years. Um as of June 30th, 2025, so

6:19we're talking a year back. Keep in mind

6:22um the assets within the trust were $61

6:25million 61335147.

6:29I can tell you that number is now in the

6:3170s as we look at closing FY26. So as of

6:35June 30th, 2026, but at the time of this

6:38report it was 61335.

6:41Um we are seeing a good return on those

6:44investments about 9.59%

6:47of our return for that year. Of the

6:50contributions put into the trust last

6:52year uh in FY25 8.6 came from the city

6:57itself municipality about 1 million

7:00budgeted and 7.5 million through the

7:02free cash contribution. Employees

7:05contributed about 376,000

7:07through that 1% that I mentioned. Um

7:11expenses are very low right now as we

7:13recognize that our OPED obligation, our

7:16oped liability is significant. Um as of

7:21this time uh in 25 it was about $1.15

7:28billion of OPED liability. Meaning

7:31that's the actuarial analysis of all

7:34existing retirees and all current

7:37employees for when they become retirees.

7:40That's the assumption of all of the

7:42costs that the the OPB trust ultimately

7:46will be facing over the course of years.

7:49Um we have only

7:53um reserved about 61 million as

7:55mentioned in the OPED trust as of June

7:5730th. So we have a significant way to

7:59go. were about 5 uh 35% at that point in

8:04time in terms of our funding level for

8:06the OPED trust. We are not alone. That

8:09is consistent across the state and

8:12municipalities. Um very few communities,

8:15a handful have actually fully funded

8:17their OPED trust. There are many who

8:19have 0% funding of their OPED liability.

8:23The city is okay. We're we're not great,

8:26but we're okay. and we will continue to

8:28fund that through the three methods I

8:30mentioned. Um, again, we're not

8:32obligated at this time to fund the OPEB

8:36in advance. Right now, it's paid as we

8:39go. We pay it out of the state city

8:41budget each year. Um but we are

8:43obligated to report the liability each

8:46year and hence this report out to the

8:48council and it is actually part of the

8:51aer which is the other item uh 3B the

8:55annual comprehensive financial report

8:57the OPED component is in there as well

9:00um the OPE trust so we're we possess

9:04these funds the city is not yet calling

9:06on these funds to support uh the actual

9:10funding of retirey healthare care. We're

9:12letting it grow to the point that it can

9:14sustain that kind of impact. What it is

9:16used to do is it funds the actuarial

9:19study that is done on an annual basis.

9:21Uh it also funds there is a small number

9:24of employees who were part of the

9:27airport when the airport western airport

9:29was a city-owned responsibility uh

9:32city-owned property. When the agreement

9:34was made with Massport, the city agreed

9:36to maintain its responsibility for those

9:39retirees. Hence their um their cost of

9:44health insurance is actually taken from

9:45the OPED trust. Um the funds are mainly

9:50invested through the Massachusetts

9:52Pension Reserve Investment Management

9:54Board or PRIM. It's a state entity that

9:58is an option. It's not the only option

10:01for investing municipal retirement and

10:03OPED funds. At this time, we have put

10:07those funds into that PRIM account. It's

10:10called the Prick Core fund. Um, we've

10:12seen, as mentioned, we're seeing good

10:14returns, 9.6% returns in FY25.

10:18Um, we had a three-year return of 8.2%,

10:21a 5-year return of 9.6. So, we're seeing

10:25a healthy return on those funds. PRIM

10:28does a good job. They also have a

10:29significant portion of our pension fund

10:31as well. Um, so we're comfortable

10:34leaving the funds there. As the fund

10:36grows bigger, it is expected that we

10:38will start to diversify the portfolio

10:40beyond just the PRIM account. Um

10:43although it's important to note PRIM

10:45invest within multiple, it's a managed

10:47fund. It invests in multiple different

10:48investment types. Um, so as mentioned,

10:52this report is here to inform the city

10:54council, make sure you're aware of our

10:56OPED liability, our OPED funding, and

10:59then the goals and objectives of the

11:01OPED trust and the OPED trust board as

11:04we go through each year and manage the

11:06funds and the investment process. I

11:08should mention the OPED trust is made up

11:11primarily of city employees and

11:13retirees. The beneficiaries of this fund

11:15are city and uh uh employees and

11:18retirees. Um there are three um external

11:23uh appointees coming from the city

11:25manager, the retiree um representatives

11:29and city employee representatives. A

11:31number of them are elected. There's

11:33actually an election process to um put

11:36folks onto the OPED trust. And then

11:38there are a few um uh created by the

11:43ordinance exeicio. Um it was Brian

11:46Allen, CFO of the public schools. It

11:48should now be Sarah Consalvo, the CFO of

11:50the public schools, Bill Bagley, the

11:53city's um human resources chief human

11:55resources officer, Bob Sterns, who

11:57serves as chair of the OPEB Trust

12:00Committee, city auditor, and then I

12:01serve as exeicio as CFO for the city.

12:05So, right now, I would say it's a good

12:07story. the OPED trust is is doing well,

12:10but obviously we have a long way to go

12:11to actually cover the the liability, the

12:14future liability of the city as it

12:16relates to to our um health insurance,

12:18retirey health insurance. I can tell

12:20you, and I know this has been discussed

12:22at council, the focus for the city is we

12:25are obligated to fully fund our pension

12:27under the law. We have to have that done

12:29by 2040. We have an actuarial plan and

12:32program to do that by 2034.

12:36When we finish fully funding pension,

12:38the focus will undoubtedly turn over to

12:40OPED. And even if it is not mandatory

12:43that we fully fund it, our goal would be

12:45to fully fund it. Right now, we pay

12:47about $25 million out of the city and

12:50school budget. So, the combined budgets

12:52that goes toward um retirey health

12:55insurance. And so, we're paying health

12:57insurance for people who no longer work

12:59here. If we can build the trust up to

13:01the level it can support that cost.

13:04Those are dollars that can be used for

13:05current operations rather than retirey

13:07health insurance.

13:11>> Happy to answer any questions.

13:13>> Uh I'll open it up for my um colleagues

13:17to have any question please.

13:19>> Yes please. Councel B.

13:22>> Thank you Mr. Chairman to through the

13:25chair to Mr. McGirthy,

13:29I guess one of my questions is how does

13:31Bruce briefly, how does the OPEC funding

13:35affect our bond rating

13:39through the chair? That's a very good uh

13:41question. So, OPED is one of the city's

13:43large liabilities. There's really three

13:46major liabilities that the bond rating

13:48agencies look at and focus on each year

13:51as we meet with them and they review our

13:52progress. Um, number one is debt

13:54service, the amount of debt that the

13:56city possesses and the debt service

13:58obligations that that entails. Number

14:00two is pension. The city's pension

14:03liability is a it's about a 1.7 1.8

14:07million total liability. We only have

14:10only uh probably 300 to 400 million

14:12remaining in that liability and hence

14:14the 2034 goal for full funding for that.

14:17Uh and then the third is the OPED trust.

14:20Um so they look at it as a 1

14:23one5 billion dollar obligation that is

14:26coming down the pike. Um they look at

14:29our annual payments for retirey health

14:31insurance and they assess whether or not

14:33they believe the city is a adequately

14:36preparing for that future cost and b

14:39capable absorbing the current cost on an

14:42annual basis. And so it definitely is

14:44something we look at, we talk about with

14:46the the rating agencies. Our focus on

14:50fully funding or on funding it to the

14:52extent we can in advance is a positive.

14:55Um and we report out kind of that annual

14:58incremental growth. Um I think I

15:01mentioned it's 5.35%.

15:03Uh if uh at the assuming our liability

15:06doesn't change with this next actuarial

15:08study with the 26 results, we'll be at

15:116.4%. 4%. So we're slowly but surely

15:14growing our percent funding on that.

15:17>> So if I if I may through the chair, can

15:19I conclude then, Mr. McGarthie, that if

15:21our bond rating remains as strong as

15:24it's been, then those that are rating us

15:28um are comfortable with the game plan

15:31regarding the OPED liabilities.

15:32>> Uh through the chair, I would opine

15:36that. Um, again, it's always a

15:38discussion point, but one of the things

15:40that the bond rating agencies point out

15:42as they do their analysis and rating is

15:44kind of our commitment to the financial

15:46integrity plan, our strong financial

15:48management, and part of the financial

15:50integrity plan is our commitment to

15:52fully funding OPED. We created the

15:53irrevocable trust in 2020, I think. Um,

15:57we've got this funding structure in

15:59place. We've added the 1% from employees

16:01over the last three or four years. So

16:04yes, I I would say they look at that

16:06very favorably in terms of the long-term

16:08perspectives.

16:09>> Thank you. Thank you, Mr. Chairman.

16:12Um, councelor Rosen, do you have any

16:14questions?

16:18>> Thank you, Mr. Chairman. Through the

16:19chair to Mr. McGorthy, do all retirees

16:23from Worcester

16:25pay for their health insurance 25%.

16:28everyone pay that

16:29>> uh through the chair. If they're vested

16:31and part of the city's pension retiree

16:34program, then yes, the the um it is

16:37important to note uh that includes

16:40educators who are on MTRS while MTRS

16:44covers the the mass teachers retirement

16:46system. While MTRS covers their pension

16:48component, the city covers their health

16:51insurance component, the city and

16:52schools. Um, so yes, anyone who's part

16:55of the city's health plan, it's a 7525

16:58split.

16:58>> So how many years do they have to be

17:01with us and then they leave and we still

17:05are obligated to pay the health

17:07insurance

17:08>> through the chair? Once you reach 10

17:10years and are vested in the pension

17:12system, you should be eligible for OPED

17:14from the city.

17:16>> Okay. And from what I just read online

17:19recently, they're expecting health

17:21insurance to skyrocket. I mean, it's

17:24high enough now. We all know that. But

17:26to really skyrocket,

17:28uh, like everything else, I guess. I

17:30mean, I was just We heat our house by

17:33oil and I guess a tank of oil is going

17:34to be like $1,400.

17:38It's just unbelievable.

17:40>> $1,400 for one tank. And I know it

17:42doesn't in the cold of the winter

17:43doesn't last a long time. So what do how

17:45do we plan ahead for these skyrocketing?

17:48I mean we have obviously trouble making

17:50payments now and you know having enough

17:53you know funding for health insurance

17:56but if it skyrockets out of sight what

17:58do we do?

18:00>> So through the chair that's exactly what

18:02the actuaries analyze as they look at

18:05our liability. Um our highest liability

18:08I have tracked back to FY19 on my list

18:11here. Our highest liability was in FY22.

18:14At that point, they um determined it was

18:17about a $1.5 billion liability. We're

18:21now down to the um at least in this

18:23case, 1.15.

18:25Um uh sorry, uh it was a $ 1.5 billion

18:29liability. We're now down to the 1.2

18:321.15.

18:34Um but that's part of the the equation.

18:36the number of employees, the age of the

18:38employees, health insurance rates, life

18:40expecties, all of that goes into the

18:43number for them to determine how much

18:45they think the city will ultimately have

18:47to pay for all retirees. And as you

18:50know, the insurance costs for the city

18:52this year were up 8%. Um, and that was

18:55after a concerted effort to reduce the

18:58potential increase in the health

18:59insurance rates. Um, if health insurance

19:02is on the same track going forward, then

19:04our liability will continue to grow and

19:06our percentage of funding will shrink

19:09accordingly if it outpaces our ability

19:12to put monies into the trust.

19:14>> And through the chair, the uh 1%

19:18paid by the new employees. So, is that

19:21yearly every year?

19:22>> Uh, through the chair, it's through the

19:24paycheck. So, it's a deduction on each

19:27paycheck. It's a 1%. So ultimately

19:30>> for as long as they work for the city.

19:31>> As long as they work for the city,

19:34>> right?

19:34>> Okay.

19:34>> We we have reached agreement with all

19:36the collective units on the city side.

19:38It's just

19:38>> And how long have we done that?

19:40>> It started I think FY23 were the first

19:43groups that started to contribute. Um

19:46and it's only on turnover of positions.

19:48So it's only for new staff. So longer

19:51term staff positions are not paying in,

19:53but when those are refilled at some

19:55point, that position will pay in as

19:57well. So eventually everyone will be

20:00paying that extra eventually

20:02>> through the chair. That's the goal. If

20:03that's the goal.

20:04>> Okay. Thank you, Mr. Chairman. Thank

20:06you, Mr. McGworthy.

20:08>> Thank you, counselors. Um, first of all,

20:11uh, Mr. McGoti, thank you for filling in

20:13for our auditor who is uh, not here

20:16today at this point, but uh, for you to

20:18volunteer to make his presentation. You

20:20did a great job. I think you know it

20:23all, and I'm very glad that you gave us

20:25a good idea about it. I just have a

20:27couple of things that I would like to

20:28clarify. Uh this retirement benefit

20:32covers everyone in the family of the

20:35employee if he retires.

20:37>> Uh through the chair, it covers the cost

20:40to the health insurance plan. I do

20:42believe after a certain age, you're only

20:45eligible for a twoperson plan as opposed

20:49to a family plan. And obviously, it only

20:52covers those up to age 26 in terms of

20:54dependence. You know, there is that same

20:56approach that other insurance plans

20:58would have for for um full-time

21:01employees, but it would cover the any

21:04insurance paid through the city, it

21:06would be part of that that coverage.

21:08>> And in case uh if the employee, God

21:12forbid, passes away, that covers the

21:14surviving spouse's health insurance as

21:17well. uh through the chair. I don't know

21:19the particulars, but it would depend on

21:20how the surviving spouse I believe it

21:22would depend on how the pension was

21:24agreed upon. If the pension for the

21:26surviving spouse continues, the health

21:28insurance coverage would continue.

21:30>> The employees are given a choice to make

21:32the selection.

21:32>> I believe that's how it works. We

21:34definitely I can tell you we definitely

21:35have surviving spouses in the system. So

21:38they there is a possibility there is a

21:40way for them to be part of the health

21:42insurance throughout.

21:44>> And as I see Mr. Mr. Mad we have a

21:47substantial amount of money you know $61

21:50million and it's being managed is there

21:53a investment committee or who oversees

21:55or monitors how it is done or how it is

21:59allocated for the investment purposes?

22:01>> Yep. So through the chair and you'll see

22:03it at the top of the report the um OPE

22:06trust is an irrevocable trust of the

22:09city. It's its own entity. as appointees

22:12as dictated under the law establishing

22:15it. Every community um is encouraged to

22:18establish an irrevocable trust. But

22:21there are um the four exeicios, the

22:24three represented who are appointed by

22:26the manager and then two, one

22:28representing an an elected active like a

22:32an active employee who is elected and

22:35one representing a retiree who is

22:36elected and that's where I mentioned um

22:38the human resources uh department

22:41actually goes through an election

22:43process, distributes ballots to all

22:46current employees and current retirees

22:49uh and Then the election occurs to put

22:51folks onto the the committee itself.

22:54>> And they have a term

22:56>> uh through the chair they do have a

22:58term. It is [snorts]

23:00um five years a fiveyear term

23:06>> although uh through the chair to that

23:07point the exeicios would not my term

23:10would extend as long as I sit within the

23:12CFO position.

23:14>> Okay.

23:15uh just for my uh information or

23:18knowledge purpose the PRIT core you said

23:21that's 61 PRIT stands for

23:24>> uh it's the um states pension reserve

23:28investment trust I believe um

23:32>> it is a fund established by the

23:34commonwealth that uh pension reserves

23:37investment management or uh pension

23:40reserves investment trust um it's a

23:44entity established by the state to

23:46assist municipalities with the

23:47management of pension funds, but they

23:50also will manage OPEB funds. Um they're

23:54similar structure.

23:55>> And just one last out of curiosity, if

23:57you know the answer that compared to

24:00other municipalities, our OPE trust

24:02fund, where do we stand like if you have

24:06any knowledge about

24:07>> uh through the chair? So, I've compared

24:09it to a few communities um not statewide

24:15and the data is a little dated. We get

24:18it through PRIM. They post how

24:20communities are doing. So, just for a

24:23comparison, um Holden close by is 31%

24:29funded. Paxton is 0% funded. Um so

24:33that's the range of our surrounding

24:35communities. The Commonwealth is 18%

24:38funded. Boston is 26% funded.

24:43Springfield is 1.75%

24:46funded. Cambridge, which you would

24:48normally expect Cambridge to be in a

24:50lead, is only 4.3% funded. Um,

24:55so, uh, we're we're in the mix. We're

24:59probably in the top half of funding

25:01ratios, but there's obviously a big gap

25:04between us and 100% funded.

25:06>> Well, once again, thank you for giving

25:09us the insight of it and uh looks like

25:12it's a good report. I'm glad u councelor

25:15Bergman clarified that it how it impacts

25:17our bond rating and thanks for answering

25:19that as well. Um anyone of you have any

25:23other question? If not, then I think

25:25I'll make the motion to file.

25:29that

25:29>> councelor Rosen.

25:32>> Yes.

25:33>> Councelor Bergman.

25:34>> Yes.

25:35>> And chairperson councelor Mitra.

25:37>> Yes.

25:40Thank you. Now we go to the see the item

25:45number 3B.

25:483B is the transmitting the city's annual

25:51comprehensive financial report ACFR for

25:55the year

25:57ended June 30, 2025 as prepared by the

26:00auditing department and audited by the

26:03certified public accountant from Clifton

26:06uh Larsson Allen LLP. So since our

26:10auditor is not here and Mr. Moti says

26:14that that is something the audit

26:16department should present. I would

26:18request that if my colleagues agree with

26:21to hold this report for now and we'll

26:24bring it back in future meetings. That's

26:28okay. Roll call.

26:30>> Councelor Rosen.

26:32>> Yes.

26:32>> Councelor Bergman.

26:33>> Yes.

26:33>> And chairperson and councelor Mitra.

26:35>> Yes.

26:37Thank you. Going to item number four

26:40which is the last item of the day on

26:43this uh subcommittee meeting.

26:45Communications of the city manager 4 A

26:49through 4G. These are all the uh

26:53transmission transmitting theformational

26:55communication relative to a financial

26:58update for past few months. But if you

27:01all agree then I would like uh Mr. Modi

27:04or Makodi to present only 4A which is

27:07the latest one if you agree with that

27:10>> through the chair. Absolutely. Um you

27:12know as you mentioned these are

27:13something we do throughout the year.

27:15It's a monthly update on the city's

27:17finances. It usually is submitted about

27:19two months post the close of that

27:22original month. Um so that all the books

27:25are finalized or at least at that point

27:28in time the books have captured most

27:30transactions for that month. Um and as

27:33you indicate the the June 30th is the

27:35end of the fiscal year. It captures the

27:38activities going on in some of these

27:39priorformational communications. Um June

27:4330th is the end of the fiscal year. Uh

27:45it was our last month of FY26.

27:49Uh we ended the year solidly. Um we are

27:53still closing out. Uh what what happens

27:56is um through June uh 30th, we then

28:01calculate all revenues received by the

28:03city, all expenses either uh expended by

28:07the city or acred uh obligations that

28:10need to go out of the the following

28:11month or two. Um we analyze all grants

28:14to determine whether or not we've

28:16received reimbursement for any grant

28:18expenses. We look at all capital uh to

28:21ensure that we've borrowed for any

28:23capital deficits within projects. Um

28:26right now we have a borrowing that will

28:28be completed. We're signing the notes

28:30actually tomorrow uh which represents

28:33about um 36 million in borrowing for uh

28:37ban borrowing anticipation notes and

28:39then $10.5 million in bond a long-term

28:4310-year borrowing. Um what this uh

28:46communication indicates is that um

28:50revenues for the year ended at about

28:52101% of the budget. So that's good.

28:55Revenues were a little higher than we

28:57expected. Expenditures were at 94% of

29:01the budget. That's good as well.

29:02Expenditures were below what we

29:04expected. Um so the result is we

29:06finished the year above. We finished the

29:09year in the black. Um, that's a great

29:13outcome. This was a challenging year. As

29:16you all know, snow was a difficult

29:19process this year, a difficult expense.

29:21The snow budget was 5.5 million. We

29:24ended up spending 10.5 million on snow.

29:28So, we had to find ways of um capturing

29:32unused budgets. At the end of the year,

29:35we do a lot of transactions through the

29:36city council to move monies from um

29:40departmental budgets with a surplus to

29:42departmental budgets with a deficit.

29:44Snow being one of those, one of the

29:46largest of those. Um we were able to do

29:48that because of the expenditure status

29:51within the fiscal year. Um the

29:53enterprise funds which represent water,

29:56sewer, golf, and off- streetet parking

29:59were fairly stable except I would

30:02mention sewer. sewer because of the

30:04Holden lawsuit and um a second lawsuit

30:09Ravoli related to um Route 20. The sewer

30:12ended the year okay, but its reserves

30:15were depleted significantly. Um and so

30:18over the next few years, it's very

30:20important that we build up the sewer

30:22reserves. It is something we talked

30:24about with the rating agencies as we

30:26prepared for the ban and the bond. the

30:27status of the the reserves. We think um

30:30sewer will be about three and a half

30:33million dollars of reserves coming down

30:35from 19 million of reserves at the end

30:37of last year. Um so a major change and

30:41I'm I have no doubt when we do the

30:43winter um bond rating presentation,

30:46they'll be asking further questions and

30:48looking for a strategy to make sure we

30:50can grow the reserves again over time.

30:53Um but other than that, the the various

30:56enterprise funds were fairly stable. Um

30:59golf had a good year. Uh water was

31:01stable, off- streetet parking board was

31:03stable. Um

31:06I think as we close out the fiscal year,

31:08we'll be coming back to city council in

31:11the probably November time period is

31:14when we bring in any free cash and new

31:17growth over budget adjustments that need

31:19to be had. Um, we'll also at that time

31:22be doing the tax rates. So, at this

31:25point, based on the data in front of us,

31:27based on the report that you see, I

31:28think we've ended FY26 fairly solidly.

31:32Um, we did just submit uh FY20 the July

31:36of FY27 to council um for this new

31:39fiscal year. But, as you can imagine,

31:41that's month one of 12. Um, and so we'll

31:45see as FY27 continues, you know, whether

31:48or not there are any dramatic impacts on

31:50either our revenues, you know, thinking

31:52of things like interest rates and how

31:54that affects our our interest income

31:57from our investment accounts and the

31:58like, um, building permits, motor

32:00vehicle excise, um, and valuations. I do

32:03think property valuations are still

32:05going up, but whether or not we'll still

32:08see that level of investment in

32:10properties or um uh people buying cars

32:14or you know kind of pulling permits for

32:16various things remains to be seen, but I

32:19think FY26 when we come to council with

32:21the final results will be good. Uh it

32:24looks like you know we were able to end

32:26the year clear.

32:29>> Thank you again for making the

32:30presentation. I would open up for city

32:33council and councilors Bergman and

32:36councelor Rosen to ask any question if

32:39you have on the report that's presented.

32:41>> I I think I'll be relatively quick just

32:44a couple questions through the chair to

32:46Mr. McGirthy.

32:48I don't want to uh make this

32:50particularly make this particular

32:52assumption, but given that revenues

32:56were higher than expected, expenses

32:58lower than expected,

33:00how does that factor into the

33:02availability potential availability of

33:05the free cash that you're going to

33:06report on in November?

33:08>> Uh through the chair, it absolutely

33:10factors in. Um free cash is excess

33:15revenue and uh unspent funds. um but

33:19then is offset by outstanding

33:23obligations. Um I mentioned uh grant

33:26obligations where we may have build

33:28you're able to move a grant account into

33:31a deficit certain ones understanding

33:33those funds will be reimbursed to the

33:35city. If those funds don't come in on

33:37time that comes off the top. Um if there

33:41are capital deficits remaining as we

33:43close out the year that comes off the

33:45top. Essentially, the Department of

33:46Revenue wants you to hold monies aside

33:49to ensure that those deficits can be

33:52addressed if those dollars don't

33:54materialize. I don't expect a

33:56significant amount of that. Um, but it's

33:58possible. So, what we do is we take the

34:01information we have, and again, we're

34:02still closing out the year, although I

34:04expect it to go into DO in the next week

34:06or two. Um, we have to submit to DO by

34:09September 30th. Do then reviews all our

34:13numbers. they make the final

34:14determination on free cash and they get

34:16back to us. Um, and at that point, once

34:19we have certified free cash, that's when

34:20we come to council. But you're right. I

34:22I I I think it's it's safe to say that I

34:25think free cash will be higher than we

34:28would ever budget. We don't assume free

34:30cash when we put together the budget,

34:32but in this case, there is some excess

34:34that will be utilized. I will also point

34:36out that there are a couple funds that

34:38we are closing in FY26. we closed in

34:42FY26. Um we had most um specifically and

34:46and impactfully uh there was a carbon

34:49mitigation fund that the city maintained

34:51that was a reserve fund. The

34:54Commonwealth came out with a ruling that

34:56surprised a lot of communities that said

34:58that cannot be a reserve fund. Those are

35:00considered general fund revenues. And so

35:02that fund will flow into free cash

35:04because we have to close it out. It'll

35:06become available funds. So things like

35:08that can also impact free cash

35:11calculations as we go along.

35:12>> Yeah, I'm asking that question through

35:13the chair because there's

35:15[clears throat] always the hope that the

35:18there's an opportunity for some sort of

35:20tax relief out of the free cash, but

35:22sounds like it's premature right now,

35:24but optimistic. The second question I

35:27have through the chair and I'll finish

35:29with this and [clears throat] I was have

35:32been fortunate to be on this committee

35:34in the past. One of the things that I

35:37just wonder is there a built-in

35:39mechanism with all the numbers that your

35:42office looks at with this, for lack of a

35:45better term, a red flag that goes off to

35:47let you know that some deviation has

35:49occurred where you need to be concerned

35:52about and and how does that if there is

35:55such a mechanism, how does that get

35:57reported if at all to the council

36:00>> uh through the chair? I'll start at the

36:03end first. It would get reported through

36:04these reports that we submit on a

36:06monthly basis. Um we would highlight it

36:09uh in in the one in front of us. For

36:11example, we do highlight the Holden

36:12lawsuit and the potential impact on the

36:15um sewer reserves. The um

36:19the of we have three primary funding

36:22sources. We have state aid, we have

36:24local property tax, and then we have

36:26local revenues which are things like

36:28motor vehicle excise, building permits,

36:30licenses, fees, etc. Um,

36:35state aid we learn as soon as well we we

36:39believe we learn as soon as the state

36:41passes its budget that as you know when

36:44we bring in our budget to city council

36:46the the state budget's not concluded. So

36:48we bring in based on the governor's

36:51submitted budget. The state budget

36:53doesn't get finalized until about

36:55usually it's June 30th if not into July.

36:59And you can see in this report, we do

37:01highlight that the state budget was

37:03about 2 million plus 2.1 million below

37:07what we budgeted in the city budget

37:09based on the governor's submitted

37:11budget. Um so we highlight that right

37:13from the beginning once that number is

37:15set on property tax. The property tax is

37:18a fairly stable funding source. Um, the

37:21way it works is the city budgets the

37:252.5% increase allowed under Proposition

37:272 and a half and then we budget what we

37:30anticipate to be new growth. Um,

37:34those two components rep reflect the

37:37increase in property tax year,

37:40but property tax is fairly stable. Once

37:42city council approves that, we then

37:45through the tax assessment process,

37:47through the setting of tax rates, the

37:48city council takes that number and

37:50divides it among all the various

37:52property tax entities by voting on the

37:55tax rate. Um the only challenge we would

37:58usually have in the property tax is

38:02collections. if there was a

38:04significantly bad year in the economy

38:07where people couldn't afford to pay

38:09their property taxes or um uh people

38:12were going into foreclosure, that's when

38:14we would see the impact on the

38:17collection rate and we would see it on

38:19our cash flow. We haven't had one of

38:21those years for a little bit. Uh it's

38:23probably been seven or eight years since

38:25we really saw a kind of a real

38:27foreclosure challenge in the city

38:30broadly. Um but uh so property tax

38:34generally we're reporting on the

38:36collections the the normal collections

38:38you can see here collections were at 99%

38:41for the year. That's a little bit lower

38:44than we normally see but not by much.

38:46It's still within the vein and 99% out

38:48of 100 is pretty good. Um but it is

38:51something we watch as we go along.

38:52Nothing to worry about yet but we pay

38:54attention.

38:56The biggest well really two the biggest

38:58question on the on the general fund or

39:01general revenue side is the local

39:03receipts and that's where we would see

39:06warning signs happen. Um we do watch to

39:09see especially motor vehicle excise.

39:11We're very reliant on motor vehicle

39:12excise. It's about a 1718 million

39:15collection each year. Um the biggest

39:18motor vehicle excise bill is in February

39:20so we can see that collection process

39:22and how that how that's working out. Um,

39:25building permits we follow throughout

39:27the year just to see are we on target,

39:29are we not on target. Um, so we do see

39:32red flags when they appear on a monthly

39:34basis. The key though is if there's a

39:38red flag in one revenue stream but a

39:41real positive in another, we wouldn't

39:43feel the need to report. Right? If we

39:45think our overall revenues are going to

39:47be fine, we don't report on individual

39:49revenue line items. We we probably have

39:52over I'd have to count, but I'd say

39:55probably over 150 independent revenue

39:57line items that we track. Um so it's

40:00really reporting bigger shortfalls. Uh

40:03and then you get to the point and um we

40:06did it this year where the city started

40:09to hold back on new hires. we started to

40:12ask departments to withhold on new

40:14purchases that could have waited from

40:16one fiscal year to the other just to

40:18make sure our overall revenues and um

40:21budgeted expenses um match. And that's

40:24why I think you see the 94% on expenses

40:27this year is because departments to

40:28their credit listened. They they held

40:31off on filling vacancies. They, you

40:34know, held off on sending people to

40:36conferences or trips or buying certain

40:38items needed for the office. And so we

40:40were able to reduce expenditures and

40:42cover that snow deficit. Where you look

40:44at other communities and they're pushing

40:45for uh overrides and you know they're

40:49carrying the snow deficit. Do this year

40:51allowed them to carry the deficit into

40:53the next year. Nobody wants to do that

40:55because that hits your tax rate and your

40:57tax levy in that following year or

40:59reduces your expenses in that following

41:01year. Worcester was able to avoid that.

41:04But this is where you would see it. we

41:06would be reporting concerns through this

41:08monthly report. Um, and we, as I

41:11mentioned, we do it on the aggregate.

41:12So, if we, if we saw a shortfall in

41:14revenues that was likely to impact us,

41:16we'd start to insert that in and say

41:18we're watching X and Y. The one thing I

41:20should mention though is the enterprise

41:21funds. The enterprise funds are a little

41:24trickier. um water and sewer. The way

41:27credits work, we don't get a real good

41:29picture of how that department is

41:31working that we credit certain costs on

41:33the city side with water and sewer

41:35funds. Um so they have immediate

41:37deficits up front, but then they're kind

41:39of covered by revenues over time. Um

41:41golf, if you think about it, golf has

41:43two real seasons during the fiscal year,

41:45the late summer, early fall and then the

41:48spring. So there's a big period where

41:50golf revenues dry up essentially. So, we

41:53have to kind of follow it throughout the

41:54year. Um, off- streetet parking is a

41:57little more consistent, but um the

41:59enterprises because they're reliant on

42:01their own revenues, it makes it a little

42:04um more important but harder to kind of

42:06follow whether or not they're they're

42:08going to break even until the last few

42:10months of the fiscal year.

42:11>> Okay. Thank you. Thank you, Mr.

42:13Chairman. [snorts]

42:15>> Council Rosen, do you have any question?

42:18>> Yeah, quick question.

42:19>> Sure.

42:19>> Thank you, Mr. Chairman. to the chair to

42:22Mr. McGory. So I because of the Holden

42:25land uh lawsuit, the saw reserves went

42:29down substantially. I know somewhere

42:31around 19 million to 3 to four million

42:33in that area. And how important was us

42:36to have 19 million available? Is that

42:40something we've had take the last 10

42:42years? Is there have we ever had any

42:44situations that we really needed to dip

42:46into that money? because it's

42:48substantially lower now and are we in a

42:50danger point because it's so low

42:52compared to the past through the chair.

42:54>> So through the chair it's it's a good

42:56point. Um it's important to note the the

42:59decrease was because of two lawsuits the

43:01Holden lawsuit and the Ravoli lawsuit.

43:04So um both of them hit during this

43:06fiscal year and that's where you saw

43:08that that um $16 million drop about 10

43:12million for Holden, six million for

43:14Ravoli. Um the the good thing that uh

43:19existed over this past year is um the

43:24sewer reserve used to be a lot lower as

43:27defined as a sewer reserve. Um we've had

43:30in the past a sewer connection fee

43:32reserve where if a new project is

43:35connecting into the sewer system they

43:37have an obligation to pay a certain fee.

43:40That fee used to go into its own reserve

43:43but there too working with do they

43:45wanted it combined. They felt that the

43:47sewer connection fee was part of the

43:49sewer reserves. It should be

43:51incorporated into the sewer reserve

43:53account. And so the two come becoming

43:55combined increased the sewer reserve by

43:59had to have been n or$10 million that

44:02was a sewer connection fee rolling in.

44:04Um so 19 million was one of the highest

44:07levels of the sewer connect of the sewer

44:09reserve in at least a number of years.

44:12Um are we in a danger zone? Not a danger

44:17zone in the sense that we at least have

44:19reserves of about three and a half

44:21million to as a buffer on revenues

44:25coming in and expenses going out. I will

44:27say it's below our policy. Our policy is

44:29to have two months worth of reserves in

44:32case of emergency.

44:34um two months is probably about 6.5 to 7

44:39million. Um so we're at half our reserve

44:42policy. So we absolutely need to

44:44increase it um to make sure we have that

44:46coverage. That's I think what the rating

44:48agencies will be looking at is whether

44:50we've met our policy. Since we haven't

44:52met our policy, they'll they'll focus on

44:55that. Um the one thing that they will

44:58look at is even though it's an

45:00enterprise account I believe the

45:02assumption of the rating agencies which

45:04is fair is that the general fund the

45:06city as itself would cover a shortfall

45:09in an enterprise account in the end of

45:11the day. Generally speaking the

45:12enterprise if you pay a sewer bill it

45:14goes into the sewer fees. It goes into

45:16the sewer reserve. It's used for sewer

45:17expenses. If there was an emergency,

45:20could the city's general fund step in

45:21and cover until the sewer reserve

45:25becomes whole again? Yes, we've done

45:27that in the past. Not in my memory of

45:30water and sewer, but you'll recall the

45:33golf um reserve, the enterprise was

45:36covered for a number of years where the

45:38it was part of the general fund budget.

45:40It's part of the budget appropriation

45:41every year. Um and even though it's not

45:44the same type of enterprise um for DCU

45:47during COVID, that was part of the

45:49budget appropriation is the city used

45:51tax levy to support the DCU when it was

45:53shut down under COVID. Um generally

45:55speaking, that is a self-supported um

45:58vehicle. It doesn't need that, but the

46:00city will step in in an emergency.

46:05>> And through the chair to Mr. McGory,

46:07this might be a better question for the

46:09city manager, but it's a good one for

46:11you, too. And you know, on most issues,

46:15the administration makes recommendations

46:17to the city council. Whether we decide

46:19to take them or not is certainly up to

46:21us. Why doesn't, and I've always

46:23wondered this, why doesn't the

46:25administration make recommendations when

46:28it comes to setting the dual tax rates?

46:30I know we we have choices. We have all

46:32these choices, but uh it's a big issue

46:35in Worcester.

46:36you know, the are we being fair to

46:38businesses? Are we being fair to

46:40residents? Should we eventually move

46:42towards a single tax rate? Should we

46:44keep the dual tax rate? These are all

46:46important issues. And I just felt I've

46:48always felt that the administration

46:50should speak up that at least that one

46:51night that we talk about it and make

46:54their recommendation. You should move

46:55the rates closer. You shouldn't, you

46:57shouldn't touch them. So, whatever it

46:59might be, is that a question you feel

47:00comfortable answering?

47:01>> Uh, through the chair, I feel

47:03comfortable giving you a answer. an

47:05answer, not necessarily the answer

47:06you're looking for. Uh, so I think

47:09historically in Worcester, that has been

47:10the purview of the legislative body. Um,

47:12to your point, I don't, in my history,

47:14we've never provided a recommendation.

47:17Um, you know, we're always happy to

47:19bounce ideas off counselors if they're

47:21interested in talking through some of

47:22the elements of it, but we defer to the

47:25council on the on the decision. I will

47:27also point out that um Worcester and I

47:30believe this is because of city past

47:32city council requests. We divide our tax

47:36options

47:38down to the second and third and fourth

47:40decimal point. As you know, there's a

47:42massive list of options of tax rate

47:45choices each year. Um it doesn't need to

47:48be that way. It's just how city council

47:51has asked for the data. Um there are

47:53communities that pick among three or 10,

47:55you know, instead we have 120. Um so

47:59it's always fair to say if you'd prefer

48:01a shorter list of options because when

48:04you're talking the difference between

48:060.001 and 0.002,

48:09you know, the argument or the debate is

48:12really not as substantive versus 0.001

48:15versus 0.01 versus 0.1 or whatever it

48:18might be. Um, but I think it's it's

48:20definitely a conversation for the city

48:22manager to say um, you know, if the

48:25administration should weigh in. I will

48:27tell you though, um, at the end of the

48:30day, there's not a quantitative answer

48:33that we could solve for the city council

48:37in its debate. I think there are more

48:39qualitative kind of judgments about

48:41impacts on cost and economy and the like

48:45that we could add to the discussion but

48:47I don't think we could simply say this

48:49is the right tax rate

48:54>> through the chair to Mr. McGory. So

48:56what's your opinion on the the future

48:59city council moving tax rates the two

49:02tax rates together? I'm not asking it

49:04that night. ask it right now with this

49:06meeting just your own personal opinion.

49:08>> So through the chair what what I will

49:10tell you is um tax rates tend tax rates

49:14are paid by property owners. Property

49:16owners in the city of Worcester tend to

49:18have more wealth than the overall city

49:20of Worcester residents. Um if you look

49:24at do and its analysis when we do the

49:28calculation for chapter 78 and the like

49:30um incomes in Worcester have gone up

49:33considerably. So as we look at ability

49:36to pay the you know what can people

49:38afford. I think looking at the city's

49:41overall incomes is not really an

49:44accurate measurement of who pays the

49:46taxes the property tax. I think it's

49:48looking more at property owners and

49:50their ability to say to pay and

49:52according to do that ability again

49:55they're not analyzing it for tax rate

49:57purposes but according to do the ability

49:59of the city residents to pay education

50:03costs has gone up significantly hence

50:06our contributions to schools has gone up

50:08considerably and so I think that to me

50:11begs that question of whether our

50:12ability to afford taxes has gone up

50:14similarly we are the lowest compared to

50:17any the the average tax bill for a

50:20single family home is lower than all of

50:22the surrounding communities except

50:24Lester and it's one of the lowest in the

50:26state versus the average commercial tax

50:30rate is one of the highest in the state.

50:33>> And my final question is this. Few years

50:36ago when I was previously on the

50:38council, we took a vote to put the CPA

50:42question on the ballot. I guess the

50:44folks who supported the that question,

50:48you know, didn't really want to get all

50:50the signatures. I can understand that.

50:51And we had the ability to put it right

50:54on the ballot and we did that. And I

50:56voted against that. And I'm starting to

50:58think that might have been one of my

50:59worst votes. You know, I'm sure I've had

51:01a few others along the way, but uh do

51:04you agree that was a bad vote on my

51:06part? [laughter]

51:07How important how important has the CPA

51:10become to the financial

51:10>> I see the chair? I don't see the CPA in

51:12this memo anymore. [laughter]

51:14>> I know, but it's part of our financial

51:16picture. So, how important has it been?

51:18I can't turn back the clock obviously,

51:20but it seems to me that maybe I didn't

51:23realize even that night when we took

51:24that vote how important this would turn

51:26out to be for the city of Worcester.

51:28>> Yeah. through the chair. What I can say

51:30is that the Community Preservation Act

51:32has raised significant sums. Um, you

51:35know, the budget for FY27 is 8.9 million

51:38for the CPA, the um, uh, CPC, the

51:41Community Preservation Committee. Um,

51:44that's going towards open space,

51:46historic preservation, and affordable

51:48housing. Those are dollars the city's

51:50never had for those purposes, or at

51:52least not at this level. How much of

51:54that is from the tax

51:56>> uh of that amount? Um it's it's a

51:59combination. The state contribution uh

52:02we've received two to date there's an

52:06well let me say this. So to answer your

52:07question directly of the 8.9 we're

52:10assuming 700,000 will come from the

52:12state but we don't know until the fall

52:16when the state calculates that prior

52:18year collections as it related to the

52:21community preservation act funding

52:22revenues. Um, so of that 700,000, but

52:26that's not fair because that's includes

52:29carryover from prior years. So each year

52:32I would say you could assume we receive

52:35about anywhere from 700 to 750,000 from

52:38the state for our efforts on community

52:41preservation or the CPA act. Um,

52:45if we had gone with 3%

52:49then it would be a higher amount. The

52:51amount is based on the percentage the

52:53community commits. 3% community. We're

52:56one and a half percent. Our CPA is one

52:58and a half% of the tax bill. The um uh

53:02um if we had done 3%, we would have had

53:05additional rounds and received higher

53:07funding from the state, but 700,000 is

53:10contributed on an annual basis.

53:12>> Thank you, Mr. McGirthy. Thank you,

53:14Chairman.

53:16[snorts]

53:16>> Mr. Bwin, go ahead. I guess it's

53:18probably more of a comment than a

53:20question, but Mr. McGirthy, feel free to

53:23to respond if you want, but the tax

53:26discussion is going to be coming up in

53:28October. So, I don't I don't want to um

53:31have us get too deep into that now.

53:32We'll look forward to that in October.

53:34But your response to councelor rose an

53:37interest to me because um if do is

53:40saying that sounds like what you're

53:42saying is that do is saying that a lot

53:45of property owners of worester can

53:46afford to pay more. Um, one of the

53:49factors I didn't hear and maybe I missed

53:52it or maybe it just wasn't included in

53:54your response was the value of the

53:56houses. I the incomes may have gone up

53:58but for particularly for younger people

54:00to get into a house, it's a half a

54:03million dollars and um I would just

54:06challenge do's observations about

54:10property owners can pay more taxes if if

54:13they're looking at the segment of young

54:15newer owners. I'm not commenting on

54:18older owners that maybe have put money

54:20aside. Maybe they're at a higher end of

54:22their income bracket. Maybe they bought

54:24the house at $100,000 and you know now

54:26it's ballooned up to half a million. But

54:28if you're a younger person buying a

54:30house now for half a million dollars.

54:32I'm not sure how much more taxes you can

54:34pay and I don't know the DOR factored

54:36that in or not. So you feel like

54:38commenting fine. Otherwise it's fine

54:40too.

54:40>> Yeah. Through the chair. I just want to

54:41be clear. Do was simply opining. Well,

54:44they were simply providing the data set

54:46of the incomes in the city. They weren't

54:49talking about property taxes.

54:51Ultimately, their numbers go into the

54:53education formula. Nothing to do with

54:55tax rates. But according to do um our in

55:00using 20 FY23

55:03to your point, property values in the

55:05city were 15.4 billion. In FY27,

55:10the equalized value is 24 billion. So it

55:13increased by about $9 billion. Property

55:16values.

55:17Incomes were 4.6 billion.

55:21Today they're about 5.6 billion. So

55:24incomes went up about a billion dollars

55:26during that time frame. And to your

55:28point, costs have gone up across the

55:30board. You know, housing costs have gone

55:32up. Where people are spending their

55:34money has gone up. I'm simply observing

55:36that incomes in the city have gone up

55:38significantly. Um and that when you

55:42think about the tax rate, the tax rate

55:43is borne by property owners and property

55:46owners are a median their median income

55:49is higher than the normal like the

55:52average or median income of the city as

55:54a whole.

55:57>> Thank you councelor Bergman. Thank you

55:59councelor Rosen for your very

56:01informative generating questions. Um I

56:05thank you for again presenting this. I

56:07have two questions to you quickly. Uh

56:11last year for you brought about the snow

56:14issue of the snow last year fiscal year

56:17we had 5.5 million uh allocated for the

56:21snow uh cleaning budget and then we had

56:24to pay more to the DPW. We ended up

56:28giving about 10 million and uh this year

56:32this fiscal year also we have the 5.5

56:34million. So I'm just wondering that

56:37because we had an experience of lot more

56:40expense are you are we expecting is

56:44there any changes that is done because

56:46of that?

56:48>> So through the chair um snow is one of

56:50the hardest budgets to set because it's

56:52complete guess. We've had years where

56:54we've barely touched the snow budget and

56:56we've had years where we've gone over

56:58the snow budget. And so it is one of the

57:01only budgetary items that the state

57:04allows you to carry a deficit into a

57:07future year. So um if we have a deficit

57:11in any account, we must close that

57:13deficit prior to the end of the fiscal

57:14year. So by June 30th, deficits in in

57:16city accounts must be closed or um

57:20you're in trouble. Uh snow, however, if

57:24your snow budget exceeds what you can

57:27afford and um as long as you didn't

57:31artificially decrease it in the prior

57:33year, you can actually carry that

57:35deficit into the next fiscal year and

57:37pay it in the next fiscal year because

57:38they recognize that communities have to

57:41estimate what snowfall might look like

57:43and if it's a bad year, it's a bad year

57:45and that might take two years to cover

57:47the cost. Um that's what I think a lot

57:49of communities will be doing this year

57:50is carrying it into the future year. So

57:53past is not prologue when it comes to

57:55the the snow budget. What we have done

57:59is um we carry under the financial

58:01integrity plan a five-year look back

58:04where we take an average of the last

58:06five years to determine what the snow

58:09budget should be. Um, we had had the

58:11budget in the past at six. We We had

58:14started I can just I can go back in time

58:15here. In 2004, the original budget was

58:18about $1.2 million. That was low. We

58:22were always running deficits. From 2004

58:24to 2015, we were always in a deficit

58:27situation. Um, and so the city made the

58:31decision to increase the snow budget. It

58:33went up to 4 million, then 4.2, and then

58:366 million. We carried it at 6 million

58:38from 2018 to 2024. And during that time,

58:41it never went over budget. And we always

58:43had an excess that we gave back. And so

58:46in 2025, we reduced it from 6 million to

58:48to 5.5. We had an excess that year. And

58:52then in 26 was the first year we had a

58:54deficit at the 5.5.

58:57So our average five-year average now

59:00because of the 10.5 is about 5.6

59:03million. We did 5.5 million this year. I

59:07think we'll have to see if this year,

59:09you know, the question is was it a

59:10result of the snowfall or was it a

59:12result of increasing costs? You know,

59:15what what wage we set for um private

59:18snow companies coming in, what wage we

59:20set for city employees undertaking the

59:22snow work that impacts the snow budget,

59:25whether or not we see snow or a lot of

59:27snow or a little snow. So, it it's going

59:29to be one of those where this year was

59:31definitely an outlier for all

59:33communities. We're going to have to see

59:34though if the the resetting in the next

59:37few years is higher or the same as it

59:39was before. And if it's the same, we're

59:42safe. If it's not the same, we're going

59:44to have to continue to increase the snow

59:46budget. I will say the challenge of the

59:47snow budget is that's money's put aside

59:49that are not available for all the other

59:50purposes of the city. And so the more we

59:54increase the snow budget, the more we're

59:56taking out of the discretionary elements

59:58of the the overall city budget each

1:00:00year. Oh, we can all pray for a mild

1:00:02winter hopefully. Second question I had

1:00:05is about the CPA we're talking about. I

1:00:07know that we still write a check to make

1:00:09the payment. Is that now in the system

1:00:12that it can be paid online?

1:00:14>> So, yes, the CPA can now be paid online.

1:00:18>> Oh, great.

1:00:18>> Um, our hope, expectation, goal, and

1:00:23everything else is that it will actually

1:00:25be on the tax bill in January. So

1:00:28instead of being a separate bill in our

1:00:30old system, it had to be a separate

1:00:32bill. We anticipate being fully live in

1:00:34Tyler Munice starting in January for tax

1:00:37at that point the CPA will be on the tax

1:00:40bill and it will be able to be paid in

1:00:41all the ways the tax bill can be paid.

1:00:44But if someone still has an outstanding

1:00:46CPA bill, there's none due right now,

1:00:48but if they did, they should be able to

1:00:49go online and pay it.

1:00:51>> Thank you so much. Appreciate it. I just

1:00:53want to let everybody knows who are

1:00:55present here that this is a uh city

1:00:57council's uh municipal and legislative

1:01:00operations standing committee meeting. I

1:01:03would just like to I don't know if

1:01:05anyone of you had anything to say on

1:01:07that MLO meeting. If not uh deputy clerk

1:01:11uh Robbins, is there anyone online

1:01:13waiting for us to say anything? I just

1:01:15wanted to make sure that everybody had a

1:01:17chance

1:01:18>> through the chair at this time. There

1:01:19are no members of the public online.

1:01:21>> Okay. All right. U with that then I

1:01:23would like to uh seek a motion to

1:01:26adjourn the meeting

1:01:27>> through the chair. Prior to doing so um

1:01:29is your intent to file items 4 A 4 B 4 C

1:01:334 D 4 E 4F and 4G.

1:01:36>> Yes. I would make the motion to file all

1:01:38those reports and uh roll call.

1:01:41>> Councelor Rosen.

1:01:42>> Yes.

1:01:42>> Councelor Bergman.

1:01:43>> Yes. [clears throat]

1:01:44>> And chairperson councelor Mitra.

1:01:46>> Yes. Uh we just like to make an

1:01:48announcement to everybody that uh this

1:01:50committee is going to meet again this

1:01:52month at the end of the month where we

1:01:54will be discussing about the charter

1:01:57review. So anyone of you if you want to

1:02:00make you know your friends know about it

1:02:02please do so. This is going to be on

1:02:04September 28th Monday 5:00 in this hall.

1:02:08So please do come and we'll be we'll be

1:02:11making everyone be aware of this as

1:02:13well. Okay. So with that I would seek

1:02:15the motion to adjourn the meeting and

1:02:17thank you for coming.

1:02:20>> Councelor Rosen.

1:02:20>> Yes.

1:02:21>> Councelor Bergman.

1:02:22>> Yes.

1:02:22>> And chairperson. Councelor Mijra.

1:02:24>> Yes.

1:02:25>> Just a vote to