Document Salem_doc_b88e61cf0a

clw oF SALEM, MASSACHUSETTS Kimberley Driscoll Mayor }l4ay 23,2013 Honorable Salem City Council Salem City Hall Salem, MA 01970 Re: Proposed FY20I4 Operating Budget Gentlemen of the Council: I am pleased to submit for your consideration a $136,194,702 proposed Fiscal Year 2014 budget for the City of Salem. This represents a 1.05% increase over the FY20I3 adjusted municipal budget. As you know, every budget cycle seems to bring its own unique challenges and opportunities. I am pleased that we are able to present an operating budget that maintains our dedication to fiscal responsibility while also enabling us to lead Salem forward into the 21't century. Through disciplined fiscal management, we continue to prioritize funding for our core tenets of public education, public safety and the rebuilding of our aging infrastructure. We are able to undertake this work due to our past attentiveness to City finances and our collective efforts to reign in costly health insurance benefits. We are also seeing both public and private investments in Salem continue to rise, which will boost our short and long term economic growth forecasts. Some key factors to consider in reviewing this year's budget include the following: This year the budget increases funding to Salem's public schools by $2,094,529, or 4.06%. This level of increase is necessary in order to support existing programs within our public schools, as well as new expenditures related to school improvement plans and recently negotiated collective bargaining agreements. The School Committee is in the process of f,rnalizing the School Department budget, but the proposed number for education funding is consistent with our talks to date and will enable us to move forward with important goals, such as advancing high quality instructional practices, performing regular assessments of our work, implementing expanded learning time opportunities, and creating a culture of high expectations and accountability within all Salem schools. These investments are critical components of the District's accelerated turnaround plan and will help ensure that we make progress in meeting our annual student achievement goals. Salem City Hall - 93 Washington Street - Salem, MA 01970-3592 Ph. [PHONE REDACTED] Fax [PHONE REDACTED] Sec 1 - 1 ---PAGE BREAK--- Public Sa.fetv - Keepine homes and neighborhoods sa.fe A key priority of the FYl4 operating budget is a more robust investment in our city's public safety. The proposed budget includes additional funding for two new police officers, one starting in July and one starting mid-year in January. This will help us to restore positions lost in prior budget years and, more importantly, put us in a better position to respond to the needs of our growing City. rWorking with Chief Tucker we will assign any new staff based on a careful analysis of workload needs, in order to ensure maximum value to the Department. In particular, the Chief has placed a renewed focus on community policing initiatives. The addition of patrol staff will enable us to perfoÍn more 'park and walk' patrols and advance neighborhood watch initiatives. In addition, given the recent tragedies associated with the Boston Marathon bombings, we intend to place an even greater focus on our public safety planning for October. Public safety personnel will be working closely with state and federal agencies to perform both threat assessments and training exercises as we prepare for our month-long Haunted Happenings celebration. With respect to the Fire Department, we have proposed funding consistent with the existing collective bargaining agreement in order to hire an additional two firefighters, with staggered start dates in the new fiscal year. This will enable us to keep more apparatus in service throughout the year and be better prepared to respond to fire incidents and medical aid calls within Salem. Embracing Diversitv - Buildinq a stronger civic network As we strive to improve our schools and enhance public safety in the neighborhoods, one overlooked area of concern relates to embracing diversity within our coÍtmunity. Oftentimes, newcomers to our city find it challenging to understand and navigate the myriad of municipal programs and requirements, both within City Hall and outside of it.. In particular, new immigrants who may not be familiar with the language or the culture of our city. We hope to improve communication and outreach efforts to members of our Latino community by enhancing translation services and hiring a part-time coordinator to help the City engage and educate Latino families on important municipal programs. This initiative is part of an on-going dialogue with the Latino Leadership Coalition, a newly formed group of young Latino residents who want to work collaboratively with local government, and is aimed at channeling information both to and from Latino residents in an improved manner. While initial efforts may focus on the Point Neighborhood, we see this initiative as something that can be embraced citywide. Rebuilding our Asing In-frøstructur e rWith the City's quadricentennial just 12 years away, it is no surprise that keeping pace with our aging infrastructure is both a necessity and a challenge. This will require us to continue investments in our capital and operation budgets to allow for maintenance of roads, drains, and water and sewer mains, as well as parks and recreational areas. As costly as these items may be today, I can assure you that deferring current expenditures will only increase the cost to address these fundamental needs in later years. We are proposing robust investments in key corridors such as Canal Street, along with maintenance upgrades to aging water tanks and old water meters. Drainage improvements are planned to ensure compliance with new federal storm water regulations. In addition, we are preparing for proposed public utility transmission upgrades and have included funding to help us review and advocate for residents and businesses impacted by the proposed project. Salem City Hall - 93 Washington Street - Salem, MA 01970-3592 Ph. [PHONE REDACTED] Fax [PHONE REDACTED] Sec 1 - 2 ---PAGE BREAK--- [4/ater. Sewer. and Trash Enterprise In addition to the operational budget I am also enclosing an order to combine our water and sewer enterprise accounts, a practice just recently allowed and embraced by the Department of Revenue. Since many of our water and sewer expenditures are related, both by cost structure and billing, combining these accounts will create more flexibility and help us to moderate increases. Based on proposed needs for the next fiscal year, we expect that water and sewer rates will need to increase by effective July 1, 2013. As you know, previously we have increased rates by 9%o in water and 4o/o in sewer and held off on a multiyear rate plan so we could better evaluate the impacts of new meters and pump station upgrades. Over this time we have made good progress in upgrading our water and sewer infrastructure systems, but with a system as old as ours we continually need to make improvements. In addition, with the power plant coming off line as of June, 2014, we want to undertake some rate modeling exercises to gauge the impact of the plant closing, given that this facility currently uses in excess of 100,000 gallons of water per day. We will experience a significant decline in both revenues and water charges. This will undoubtedly have an impact on rates and we plan to analyze those impacts over the next several months. Please note that the proposed water and sewer budget includes payments for projects bonded and completed over the last three years to upgrade and improve the most antiquated parts of our water and sewer system. These projects include substantial investments in our infrastructure such as the relining of the water transmission line on Rantoul Street in Beverly, a main supply line for providing water to the city from Wenham Lake; initial review and partial rehabilitation of the Gallows Hill and Folly Hill water storage tanks, including the installation of mixing systems in each tank to improve water quality; two phases of the citywide water meter replacement program; and substantial upgrades of older, deteriorated mains throughout our cornmunity. In addition to increases related to capital expenditures, rates also need to account for the annual assessment from the Salem Beverly V/ater Supply Board and the South Essex Sewerage District. If these recommendations are approved, the average household will see a combined annual bill of $1,352 or just over $1I2 per month which is still much lower than many surrounding communities. The combined average annual water/sewer rates for these communities are $1,441. Salem's average water/sewer bill for FY14 would be $89 less per year than the average of our surrounding communities (see attached water/sewer rate comparison spread sheet). While I know it is never easy to vote for an increase in water and sewer rates, we also do not want to find ourselves in the position of neglecting expensive, but necessary repairs and upkeep to our water and sewer system. Failing to make these types of investments jeopardizes the smooth operation of these systems and, ultimately, may cost taxpayers more in later years. We have done our best to plan for our capital needs while also being mindful of the impact on ratepayers. With respect to our solid waste collection costs, we were able to significantly reduce costs in FYl4 by soliciting bids for this service. We expect to save a minimum of $200,000 in our annual trash collection and disposal costs and a reduction in the trash fee from $16 to $15 per month for residents and from $24 to 522 for commercial use is also included for your approval. Salem City Hall - 93 Washington Street - Salem, MA 01970-3592Ph.[PHONE REDACTED] Fax978-744-9327 Sec 1 - 3 ---PAGE BREAK--- Balancing the City's operating budget is no easy task and I appreciate the hard work and cooperation our Department heads have put forth in the preparation of this year's budget. In particular, I cannot say enough about the extra effort made by our Finance Department, led by new Director Sarah Stanton and ably assisted by veteran Assistant Finance Director Nina Bridgman. Their tireless work ensured that the budget was ready for submission and in compliance with the high standards we set for ourselves pursuant to Govemment Finance Officers Association (GFOA) Distinguished Budget guidelines. The purpose of the GFOA is to enhance professional management of governments for public benefit by identifying and developing financial policies and best practices and promoting their use. Vy'e are one of only a handful of Massachusetts communities who annually qualify for both a Certificate of Excellence for our Comprehensive Annual Financial Reporting (CAFR) and a Distinguished Budget Award from the GFOA. I look forward to working with you over the coming weeks to enact the proposed FY 2014 spending plan for municipal operations. Very truly yours, Kimberley Driscoll Mayor Salem City Hall - 93 Washington Street - Salem, MA 01970-3592Ph.[PHONE REDACTED] Fax978-744-9327 Sec 1 - 4 ---PAGE BREAK--- FY20I4 Operating Budget and C apital B udget Overvieïy Kimberley Driscoll Mayor t Sarah Stanton, Finance Director May 23,2013 Sec 1 - 5 ---PAGE BREAK--- Proposed FY1,4 Capital Budget a Capital lmprovement Program (ClP) is the long term plan for capital improvements through the City (multiple year) Capital items are tangible assets or projects with a value of S2S,000 or more. Examples of Capital Assets are Fire Truck, DPW equipment, Buildings (purchase or major renovations), water and sewer infrastructure. ltems that are NOT capital assets include services, painting rooms or buildings, books, field maintenance, routine building maintenan Capital requests must have a depreciable life of five or more years. General Fund and Enterprise Funds Capital Budget is the spending plan for the upcoming fiscal year (FY14l Combined, the CIP and Capital Budget are tools that help professionalize how capital proje are identified, prioritized, and funded for all City departments. a a a a a o Sec 1 - 6 ---PAGE BREAK--- Proposed FYL4 Capital Budget Executive Summary - General Fund ' This Capital Plan has multiple funding sources, including grant funds, capital lease, one-time appropriations, and bonding. New for FV 2OL4 we are proposing CPA funding in the Capital Plan. ' The total proposed Capital Plan for the City of Salem for FYt4 is 55,880,700 . Long Term Debt: 52,480,000 " Grants and Other Financial Sources: $2,255,800 - Capital Outlay Fund: 5353,000 , Capital Lease: 5279,000 ' The list proposed is a scaled down list from departmental requests, with priority given to those projects that are supplemented by grant dollars or any other revenue sources that will keep net general fund expenditures to a minimum. ' Details on the General Fund CIP can be found in Section 7 of book your budget Sec 1 - 7 ---PAGE BREAK--- Proposed FYL4 Capital Budget Executive Summary - Enterprise Funds o Thg Enterprise Fund's Capital Plan has multiple funding sources, including retained earnings, SESD funds, and bonding. o Ih" total pr.oposed Capital Plan for the City of Salem's Enterprise Funds for FY14 is s1,275,000.00. o There will be bonding for water and sewer capital for FY}OI4 for the internal/external rehabilitation of the Folly Hills Storage Tank. All other projects will be funded with retained earnings and from SESD retained ea rn ings. o The list proposed has been reviewed and approved by the City's E nginee r. o Details on the Enterprise Funds CIP can be found in Secti on 7 of your budget book Sec 1 - 8 ---PAGE BREAK--- Proposed FYL4 Operating Budget o General Fund total: Sf 2L,g4g,72O o Enterprise Funds: S L4,244,982 Woter, Sewer, and Trosh o Total Budget: S136,L96,702 o L.Osyo increase over the FY2013 adjusted municipal budget o Revenues = Expend¡tures... Therefore, budget is balanced!! Sec 1 - 9 ---PAGE BREAK--- Proposed FYL4 Operating Budget Key Factors of FY20L4 budget o Ed ucation : Strengthen ing ou r com m itment to first class public schools. o Public Safety : Keep¡ng homes and neighborhoods safe. o Collective Bargaining: Beginning the steps for the next round of successful negotiating. o Water and Sewer Enterprise: lmproving aging infrastructu re, increasing efficienci€s, a nd maintaining affordable rates for users. Sec 1 - 10 ---PAGE BREAK--- Financial Overview - Revenues Revenues of the City are budgeted into the following categories: rþ Tax Levy (including new growth) * Local Receipts State A¡d (Cherry Sheet Revenue + MSBA Reve n ues) other Financing Sources (Golf Course, Witch House, and Harbormaster Receipts; supplemental appropriations from Free Cash/Avai lable Fu nds) Enterprise Fund Revenue Sec 1 - 11 ---PAGE BREAK--- Financial Overview - Revenues rst I her Fnance Souræs r tnd¡ t% 2% Rese d t% ¡ Lo ceipts t2% 62% TOTAT S t25,464,689 Sec 1 - 12 ---PAGE BREAK--- Revenues - Tax Levy o FYL3 Tax Levy Limit = 517,955,293 o FYL4 Tax Levy Limit = S80,504,L75 o Projected Excess Levy Capacity = 52,970,306 FY14 Levy Limit is an estimate Needs finol opproval from DOR in Nov/Dec Prop 2% increase = 51,948,882 New Growth ¡ncrease = 5000,000 Estimated by Assessing Department Reflects development from FY2013 qÈ .lt Sec 1 - 13 ---PAGE BREAK--- Revenues r Local Receipts o Local Receipts Fyj.3 Estimated = SL4,L92,624 FYI4 Projected = S14,408,835 (increose of 52L6,211) PILOT: L0 .76%0 decrease (-Sf+9,000) L2INs Parking Fees: I.45% increase (530,000) New Meters and Sensors Fines and Forfeits: 18.42% increase (5L40,000) Better traffic & meter enforcement {t & Sec 1 - 14 ---PAGE BREAK--- Revenues r Local Receipts Parking Study: lmpacts on Revenue " ln FY 2013 the parking study made many recommendations on changes in rates, hours, and time limits that made it challenging to estimate the impact to local receipts. ln FY 2OL4 we anticípate a slight increase based on FYL3 trends. Parking Study changes include: Sharp reductions in rates in certain areas lncreased time limits at meters Additional meters with tiered rates New smart meters on main roadways lncreased hours of enforcement Changes in fine structure for violations Sec 1 - 15 ---PAGE BREAK--- Revenues-UPDATE Lo cal Receipts- N on Recurring Footpr¡nt Agreement Valuation of Plant is very d¡ff¡cult to assess at this point. Hold Harmless agreement of S3m made up the difference from !Y2OL2 actual receipts (S+.75m) and FY13 agreement (St.75m) Hold Harmless agreement good for five years from FYL4 to FYL9 Sec 1 - 16 ---PAGE BREAK--- Revenues - State Aid FY13 State A¡d FY14 State A¡d (HWM budset) - ch. 70: s20,979,459 È UGGA: s 5,972,679 !È Other: S L,L50,g75 s ch.70: ' UGGA: ð Other: S20,7sg,5g4 S 5,834 ,7sg S L,5G5,807 TOTAL: s28,160, L4g TOTAL: 529,003,1L3 '6 Sec 1 - 17 ---PAGE BREAK--- Revenues = Other Financing Sources FY20I3 þstimated) FY2OT4 - Golf Course: - Witch House: " Harbormaster: " Electrical: Ssezt Srzg¡< Szon< S¿oI o o o a O Golf Course: Witch House: Harbormaster: Electrica l: TOTAL: Srsok S¿ot S1.o9m - TOTAL: $1.04m These funds pay for the operations of the respective departments. Sec 1 - 18 ---PAGE BREAK--- Revenues r Enterprise Funds FY2013 (estimoted) * Water: 55,522,060 " Sewer: 58,783,034 " Trash S6so.oOO - TOTAL: S t+,99s,095 . Revenues for Water enterprise funds were supplemented by General Fund appropriations in FY 2013 as follows: " 52L8,738 raised on RECAP - S200+k anticipated to be funded by free cash on 6/30/L3. - TOTAL: it+,O}l ,349 . Rate increases of 5%o recommended for water and sewer for tY2Ot4. . One year rate increase recommended so that we can reevaluate in FY 2Ot5. . Newly negotiated waste ma nagement agreement a ntici pate to save City 200+k in FY 2Ot4 and beyon d. FY20t4 " Water: - Sewer: ' Trash: 5s,624,959 57,797,389 S58s,ooo Sec 1 - 19 ---PAGE BREAK--- Revenues - Enterprise Funds ti Three year rate structure proposed for water and sewer enterprise fu nds. Sewer rate increase: FYL4 5% increase FYL5 4% increase (not submitted for vote) FYL6 3% increas€ (not submitted for vote) Water rate increase tYL4 5% increase FYL5 4% increase (not submitted for vote) FYL6 3% increase (not submitted for vote) êr' Sec 1 - 20 ---PAGE BREAK--- Revenues - Enterprise Funds What are the effects of the FYL4 rate increases? A5% increase in water will increase the average water bill by 52L20 (S4 to S+¿s) A5% increase in sewer will increase the average sewer bill by 5+Z.ZO (Sso+ to SeoT) The overall annual cost of a typical household (90,000 gallons /Vr.) would increase by S0+.+o (Sr,28B to Sr,352l The average annual cost of surrounding communities ¡s S1,440, making Salem's average cost SSg less than the surrounding communities Sec 1 - 21 ---PAGE BREAK--- Enterprise Funds Current C apital Prog rams Conal Street I mprovements (Water/Roadway) rc s ø Citywide M eter Re plocement Prog ro m Folly Hill water storage tonks South River Bosin upgrode -è Sec 1 - 22 ---PAGE BREAK--- Financial Overview r Expenses Expenses of the City are broken into the following categories: City Expenses: (General Government, Public Safety, Public Works, Human Services, and Culture/Recreation) Fixed Costs (including Health lns and Retirement) Debt Service Ed ucation Enterprise Funds State Assessments + d i4 Other Financial Uses Sec 1 - 23 ---PAGE BREAK--- Expenses: City No fixed Costs FY2013 (odjusted) & t + i& åì General Gov: Public Safety: Public Works: Human Svc: Cu lt/Rec: TOTAL: S s.om itt.9m S g.sm S r.zm S z.gm S29.9m S +.sm Si.8.9m S 3.Gm S t.2m S 2.4m Sgo.sm FY2OL4 " General Gov: " Pu blic Safety: ' Public Works: * Human Svc: * Cu ltlRec: TOTAL: Sec 1 - 24 ---PAGE BREAK--- Expenses - Fixed Costs [Employee Benefits) FY2013 o Medical lnsurance: Sf L.8m o Retirement: Sg.l-m o Non-Contributory Pensions: Szgk o Wc: Ss23k o Unemployment: Sg50k o Medicare: FY2OL4 o Medical lnsurance: Sf L.7 o Retirement: Sg.5m o Non-Contributory Pensio Szsr o WC: S870k o Unemployment: S300k o Medicare: TOTAL: TOTAL: s2g.3m 522.9m Sec 1 - 25 ---PAGE BREAK--- Expenses - Debt Services FY2013 * Long Term: 55,754,908 * Short Term: S 39,797 " TOTAL: 55,794,705 o Th¡s represents only General Fund Debt Service (includ ing schools). FY20I4 - projected " Long Term: $+,Egl ,820 " Short Term: S 652,227 - TOTAL: Ss,o+0,047 Sec 1 - 26 ---PAGE BREAK--- Expenses - Education FY2013 o North Shore Vocational " Assessment: S1.603m o The City joined the Essex Aggie - NSV merger: " This will add a "debt service" assessment to the "tuition" assessment " Debt service assessment will begin in FY15 FY2OT4 o North Shore Vocational " Assessment: Sf.g+S m Preli mi na ry assessment o Essex Aggie/NSV merger - new school - FYt4:5Zl0k (int. only) - FYLS: (p & " FYL6: sSr+t (p & ' Assumed that FY15 will be the highest payment (level principal bond payments) Sec 1 - 27 ---PAGE BREAK--- Expenses r Education [SPS) FY2013 Budset FY20L4 Budget (Adiustedl Salem Public: SSf.6m Charter School: S L.OLm TOTAL - S52.Gm TOTAL - Salem Public: SSZ.6m Charter School: S 1.06m Ssg.Gm a o Sec 1 - 28 ---PAGE BREAK--- Expenses - Enterprise Funds FY2013 FY2OL4 s Water: {u Sewer: ù Trash: S 4.8m S l.Lm S 2.8m . Water: o Sewer: . Trash: S 4.8m S G.9m S 2.4m . TorAL S14.7m . TorAL $14.2m Decreose due to the renegotiation of the trash contract for FYL4. Sec 1 - 29 ---PAGE BREAK--- Expenses - State Aid [assessments) FY2013 FY2O14 - HWM Total Assessment: 55,550 ,473 Total Assessment: 55,6q+,448 Breakdown of major accounts: Breakdown of major accounts: * MBTA: ss73k - Charter School: Ss.gm " Essex Aggie: s262k " School Choice: s1s7k O MBTA: (increase by SfO,OOO) . Charter School S+m (increase by Sroo,ooo) . Essex Aggie: S2ook (decrease by Soz,ooo) . School Choice: ' 5273k (increase by Sgs,ooo) Numbers ore bosed on the HWM budget proposal. There has been a 5L00k decrease funding, but there hove been íncreoses ín above major occounts Sec 1 - 30 ---PAGE BREAK--- Expenses r Other expenses Fy201J = Sfm Fy201Q, = S1.6m Snow and lce deficit: So Overlay Sgzs,349 Cherry Sheet Offset Sls,ozq Snow and lce deficit: Szoo,ooo Overlay ' $9oo,ooo Cherry Sheet Offset Szs,6g1 Sec 1 - 31 ---PAGE BREAK--- Other things to consider... Future of Footprint Power Plant site " Long term financial ramifications . OPEB liability = SI4S million ' Started OPEB Trust in FY20L2 -5027,506 (current batance) " F¡nancial reserves policy has been modified to continue funding th Trust o Aging lnfrastructure * South River Drainage - Ca na I Street . Water Tank Repairs/Upgrades . Fixed Costs containment ' Pension Liability " Health lnsurance - Sick Leave Buyback Sec 1 - 32 ---PAGE BREAK--- FY 14 Budget Summary ' FY20L4 budget is balanced and manageable. o Health care savings and judicious budget practices in prior yea is allowing us to make needed investments in public safety, schools and infrastructure. o All labor contracts have been settled through 20L4. ' A renegotiated trash contract will bring savings to the City for the next few years. ' Health insurance costs are down due to employees migrating t less expensive health care plans. o New projects are coming on line, bringing additional revenues increasing the commercial tax base and helping Salem support needed infrastructu re im provements. Sec 1 - 33 ---PAGE BREAK--- ,tll¡ ¡e El - t ti Sec 1 - 34 ---PAGE BREAK--- City of Salem: Mission Statement o To enact the will of the people through their active, inclusive participation and to provide the services they demand in a quality and cost effective manner by: ' Practicing responsive effective governance " Unrelenting efforts to improve service quality, cost and effectiveness - Create and maintain effective partnerships, both public and private Be accountable to citizens and each other for our actions ' Uphold the highest professional and ethical standards Sec 1 - 35 ---PAGE BREAK--- Financial Updates: GFOA ' Government Finance Officers Association (GFOA): GFOA s mission: - To enhance and promote the professional management of governments for the public benefit by identifying and developing financial policies and best practices and promoting their use through education, training, facilitation of member networking, and leadership ' Awards from GFOA to City of Salem for Finance/Budget Certificate of Excellence - CAFR/Annual Audit " For the last seven years (FY05-FY1-1), the City of Salem has been recognized with a Certificate of Excellence for our Comprehensive Annual Financial Reporting (CAFR). Distinguished Budget Presentation Award - Annual Budget " For the last five years (FY09-FYL3), the City of Salem has received the Distinguished Budget Presentation Award. - Recognlzed as a published budget that meets criteria as a policy document, an operational guide, a financial plan, and as a communication device. Sec 1 - 36 ---PAGE BREAK--- Financial Updates: Reserves Free Cash and Stabilizatton Fund . Free Cash Trend FYLZ: s2,525,929 .FY11: 3,249,238 FY10: 7 50,607 FY09: 1,26L,200 FY08: 1,tt4,950 tY07: 69t,L49 . Stabilization Fund Trend FYLZ: s3,453,722 FY11: 2,736,777 FYL0: L,9L3,9L3 FY09: L,489,907 FY08: 6 48,947 FY07: 487 ,980 . Per stabilization fund policy, the City continues to fund this account with 20% of certified free cash each year o [,fndesignated Fund Balance June 30,20L2: -S5,i.93,199 Sec 1 - 37 ---PAGE BREAK--- Financial Updates: Poli cy Free Cash and Stabilizatton Fund o Policy - Free Cash (Sz.s2 miilion certified tyrz') . 20% to Stabilization fund 20%to Capital lmprovement fund L0% to OPEB liability trust fund Balance used to fund unforeseen or extraordinary expenses that may h a ppen . Policy - Stab¡l¡zation Fund - (Sg.+s milion in Fy12) Any drawdown of fund will be funded by certified free cash in the following year Strict circu msta nces for use of a ny Sta bilization Fu nd City has never had to use stabilization fund under Mayor Driscoll SS.g million funding target by 2015 of general fund operating budget) Sec 1 - 38 ---PAGE BREAK--- Financial Update: FY2013 Budget FYL3 Balanced Budget with SZ.O million of unused levy capacity Both Operational and Capital Budgets are responsible and well pla n ned operational budget focusing on education, public safety, and controlling fixed costs Capital budget is scaled down from departmental requests with priority given to projects supplemented by grant dollars and other revenue sources " 78% reimbursement from MSBAs Green Repairs Program on SS0.S million Sec 1 - 39 ---PAGE BREAK--- Financial Updates: Other notable facts /figures FYI} Unused Levy Capacity - Sg.Z million FYI} General Fund Revenue - 52 .2 million over budget Adoption of Health Care Reform resulting in: S1.5 million savings in FYL3 health care budget iZO.q million reduction in unfunded actuarial accrued liability (UAAL) - 20L0 UAAL = 5L7L.4 million " 2OL2 UAAL = s145.0 million Creation of OPEB Liability Trust Fund and Retirement Anticipation Stabilization Fund Sec 1 - 40 ---PAGE BREAK--- I mportant C¡ty I nitiatives: r Redevelopment of Salem Harbor Station property Power plant's closure poses s¡gnificant opportunities & challenges for the City Currently pays $4.75 million in tax & host fees Proposed redevelopment already underway r New Salem Whart development This project will provide a major economic boost to the City and the region, in particular to the tourism industry Phase 1 completed & Phase 2 currently underway r Robust Public & Private lnvestments proposed/underway New $135m T Commuter Rail Station New $200m PEM Campus Expansion Blubber Hollow Mixed Use Developments Sec 1 - 41 ---PAGE BREAK--- Salem Harbor Power Station o Constructed in L95L o 3 Coal-F¡red Units/1 O¡l-Fired Unit o Currently pay S4.75m in revenues o Station decommissioning June, 2OI4 o City has completed a state funded re-use analysis of the Power PIant Site o Station recently purchased by Footprint Power o Footprint proposing a new gas fired power plant + responsible for clean up & remediation of site o Hold Harmless legislation in place through 2OL6 o Proposed development allows for mixed use on site, including better use of port and more public access Sec 1 - 42 ---PAGE BREAK--- Salem Uf/hafi r Phase 1 Began Feb I,20LL r $lM Seaport Council grant and $300,000 City Council Appropriation I Phase 2- $2.5M Federal Ferry Discretionary Program Grant Sec 1 - 43 ---PAGE BREAK--- City of Salem: Waterfro nt D evel opment Phase lbegan February I,2}tl-: Construction Cost Sf.¡M funded with SfV award from Seaport Council and the balance by a Salem City Council Appropriation. lncludes: Shoreline Stabilization (Seawall), Site Utility Services, Final Grading, Site Paving & Striping, lnterim building. Phase ll: Funded with SZ.SM Grant from Federal Ferry Discretionary Program plus a SGOOk grant approved at last Seaport Council meeting. Begin Pier Construction and Partial Dredging this Fall at conclusion of ferry season New ferry operator this year has significant plans to grow and expand Salem operations base a a a a o Ferry service available for commuters and visitors Sec 1 - 44 ---PAGE BREAK--- MBTA proj ect . Proposed new SESm MBTA Salem Commuter Rail Station ' Salem lntermodal Station one of the busiest commuter stations in T system . 3l- trains and 16 buses daily ' Permitting and design underway and construction set to begin in Spring,2OL3 . Expected completion is Fall,2Ot4 : f - ' 1- . .r.i. ìr.: : Sec 1 - 45 ---PAGE BREAK--- PEM Expansion o a a o PEM has raised Ssoom for expansion & endowment of museum L4th largest museum in the world Proposing 175,000 sf addition to downtown campus Expect significant downtown economic development impact Sec 1 - 46 ---PAGE BREAK--- Citywide development proj ects r Blubber Hollow Development r St. Joseph's Church redevelopment r Highland Avenue Wal-Mart project r US Biological on Technology Way r Transfer Station r Szetela Lane r Salem State L¡brary and O'Keefe Center lmprovements r New Gateway Center Sec 1 - 47 ---PAGE BREAK--- r- _ Address: 72 67 -69 & 7L Mason Street Residential: 130 units (apartments) Commercial:5,540 SF Current Taxes: Stg,¿06 Estimated Taxes: SZS0,OOO Salem Suede Commercial: t40,750 SF (includes community space) Current Taxes: 553,682 Estimated Taxes: 5425,000 r Street and 44 Boston Street Address:401 Brid Residential:0 un 28 Goodhue Street Address: 28 Goodhue Street Residential:44 units Commercial:6,000 SF Current Taxes: St3,0¡0 Estimated Taxes: St+S,000 Address: 3 Harmony Grove Road, 60 & 64 Grove Street Residential: 1,4L units (apa rtments) Commercial: 17,000 SF Current Taxes: St8,Z09 Estimated Taxes: S250,000 Salem O¡l & Grease Sec 1 - 48 ---PAGE BREAK--- Salem Oil and Grease Salem Suede Sec 1 - 49 ---PAGE BREAK--- Salem Suede uuu Rendere,à V eu - From Acrose 3l Sec 1 - 50 ---PAGE BREAK--- Boston and Bridge Street - Gateway Center t.'ìì 'Ae Sec 1 - 51 ---PAGE BREAK--- Summary o City continues to have balanced budgets, sound financial practices, and increased reserves (Free Cash/Stabilization) ' Development in the City continues to be robust (including Salem Harbor Station) . Tourism continues to be strong . Overall outlook is positive Sec 1 - 52 ---PAGE BREAK--- or Schedule Goal/Objective Department Status Source Priority c of Salem - Lon and Short Term c Plan Su - Fiscal Year 2014 Underuav Underwav Onqoinq Onqoinq Onqoinq Onqoinq Onqoinq Onqoing Onooinq Onqoinq Onooino Ongoinq Onqoing Ongoing Pending Ongoinq Onqo¡nq Ongoing Undenray Executive and School Executive & School Executive & School Executive & School Executive/MlS Alt Executive & All Departments Executive Planning & Enqineerinq ISD, DPW, SchooI Executive Executive & Finance Executive & Finance Executive & Finance Executive Executive, Police & Fire Police & Parking Executive Planning & CD Short and Medium Term ShortTerm Short & Long Term Short & Long Term Short & Lono Term Short & Long Term Short & Long Term Medium & Long Term Short & Long Term Short & Long Term Short & Long Term Short & Long Term Short & Long Term Short, medium and lonq term Short Term Short & Lonq Term Short & Lonq Term Short & Long Term Planning - Short term, lmplementation - medium to lono term 1 1 1 1 1 1 2 2 3 3 3 'l 1 1 2 1 2 1 1 Mayor Mavor & State Mayor Citizen Survev Mayor Citizen Survev Mayor Citizen Survey & Mayor Mavor Mavor Mavor Mayor Mayor Mayor Mayor Citizen Survey Citizen Survey Mayor Mayor To raise the level of success for all Salem Public School Students (SPS) to amoung the top 10% of the Commonwealth's gateway Cities. To successfully implement the school districts Accelerated lmprovement Plan and Bentley Turn-Around Plan with demonstrable results To Strengthen school-community partnerships in building a culture of high expectations for all student success. To offer a quality education GENERAL GOVERNMENT lmprove communication with citizens lmprove responsiveness and assessibility to City departments and employees Look for ways to deliver City services more efficiently and effectively lmplement regionalized services to enhance services while saving taxpayer dollars Community recycling incentives and green energy initiatives Maintain and upgrade City buildinqs & infrastructure Undertake green energy initiatives FINANCE + HUMAN RESOURCES Submit a balanced budqet to City Council Five year financial plan and capital improvement plan Financial stability - stabilize property taxes and continue to build reserves in Stabilization and OPEB Trust Funds. Update all Collective Bargaining Agreements to reflect all language changes, side letters of agreements, and salary tables Maintain high level of Police and Fire Services Traffic & parking enforcement in neiqhborhoods ECONOMIC DEVELOPMENT Work with new owners of Salem Power Station to redevelop Power Plant site and harbor Blaney Street Wharf development EDUCATION Education Education Education Education General Government General Government General Government General Government General Government General Government General Government Finance Finance Finance Human Resources PUBLIC SAFETY Public Safety Public Safety Economic Development Economic Development Sec 1 - 53 ---PAGE BREAK--- Schedule or Goal/Objective Department Status Source Priority c of Salem - Lon and Short Term ic PIan Summa - Fiscal Year 2014 Pendino Onqoinq Underwav Underwav Onooino Pendino Pendino Onooinq Pendino PUBLIC SERVICES + ENGINEERING Onqoinq Pendino Pendino Onooino Onooino Onqoino Planninq & CD Plannins & CD Planninq & CD Planninq & CD Planninq & CD Planninq & CD Planninq & Parks Executive & Tourism Planninq Enqineerinq Plannino & CD Planninq & CD Planning & Enqineerinq Planning & Enqineerinq Planning & Enqineerinq Planning - Short term, lmplementation - medium to lonq term Short & Lonq Term Short & Medium Term Short & Lonq Term Short and Medium Term Planning - Short term, lmplementation - medium to lonq term Planning - Short & Long term, lmplementation - medium to lonq term Planning - Short & Long term, lmplementation - medium to lonq term Short & Long Term Short term Planning - Short term, lmplementation - medium Short Term Short & Lonq Term Short & Lonq Term Short & Lonq Term I 1 2 2 2 2 1 1 2 1 1 1 1 1 1 Mavor Mavor Mavor Citizen Survey Mayor Mavor Mayor Mavor Mayor Mayor Mayor Mayor Citizen Survey Mayor Mayor South River dredqinq & development Encourage responsible private development and new growth opportunities Work to begin cleanup and development activity at Universal Steel Propertv Revitalization and lmprovement of the Essex Street Pedestrian Mall Create Point neighborhood revitalization Dlan Enhance and encouraqe use of waterfront lmplement the Winter lsland Master Plan as part of maintaining and upgrading the City's infrastructure, includinq parks TRAVEL AND TOURISM Continue to lmprove upon Citywide management of Haunted Happeninqs & other communtv events lncorporate more public art throuohout the Citv Enter into new five year agreement on collection and disposal of solid waste and recycling Build mixed use parking garage facility at MBTA commuter rail station New Senior Center/Gateway Center Maintain and Upgrade City lnfrastructure - Roads, Parks, and Water and Sewer svstems Continue to advance the South River Basin flooding mitigation project Continue to advance Canal Street improvement oroiect Economic Development Economic Development Economic Development Economic Development Economic Development Economic Development Parks & Recreation Recreational Cultural Cultural Public Services lnfrastructure & Facilities lnfrastructure & Facilities lnfrastructure & Facilities lnfrastructure & Facilities lnfrastructure & Facilities Sec 1 - 54