[Music] good evening everyone thank you everyone for coming uh tonight to our first Community budget session uh my name is Michael Mason Jr and I'm the deputy city
manager of finance for the city of Chelsea um first off we appreciate you coming your participation um the in this process discuss the financial priorities and the plannings
for this upcoming fiscal year and so uh my my understanding is that this is the first presentation of this type where we're coming prior to city council um to to present the city's budget overall to
the community and try to gather feedback before we do our final draft and so I want to make sure that everyone's aware what we're presenting is in draft form a lot of the the data and the numbers will seem very final but they are indeed in
draft forms because I will try to identify areas where there could be changes and we're working through the budget um today or this evening hopefully we'll we'll get to touch on all of these I'm sure we will and you'll walk away with something at least
learning about our budget process and our fiscal 26 budget development timeline um as well as learn about what our key priorities were for this budget development cycle I will give an overview of Revenue
expenses um and I will touch upon at the end you know a brief High upper view look at the cap capital Improvement plan as well as the AR an update on our ARA stud and then we'll go into what's next
from here okay and I'll then open up the open up to the floor for any questions and answers so I first want to start off with the city's organizational structure we did do some changes uh uh last year where we have two Deputy city managers
of One overseeing Finance one overseeing operations with a set of departments that fall under them that both were poured up to the city manager for a great structure um this organization chart is how the city is Led and it also supports and how it's provided Services
um it also is part of how we develop our budget inter ternal our budget is um is developed on six uh budget policies six of them are Financial Strate Financial stability um ensuring
that we have a balanced budget any person developing a budget that's the important thing is to make sure that we're not going to have any over spending um as well as we want to support economic development for the city of Chelsea neighborhood enhancements um this is more important
as you see around us we're constantly improving our infrastructure Community Development um as well as strengthening Public Safety and governmental philosophy of being transparent you know this is one of those times where we're
having an open process to how government is ran we are here given a participatory budget session um so hopefully this information from everyone here will get fed up into the city manager's office to make any adjustments or at least under
consideration this slide is a timeline of the in an overview of our budget process and our budget development timeline for fiscal 26 so we've been developing the the upcoming fiscals Year's budget since last August we
started in in middle of August we started developing the capital Improvement plan it's it's a 5-year plan that looks at all of the capital assets of the city in any major projects that we are intending to do we we um reach
out to department heads and engage them annually in a cycle to identify what we believe are major needs and this will touch upon several categories whether it's physical buildings whe whether it's um technology implementations um we go
through we look at Al as well look at past projects to see are there any overlaps in any upcoming needs coming up are there any projects that we can clean up and clear out that may be outstanding um so we start off with that in August
and we move we continue to work on that meet as a committee until October um we met a few times we they identified all the projects that were are necessary and we then submit it to the city manager C city manager will review those uh list
of projects and determine whether they actually make the cut and whether they are deemed necessary and then after that level of review it is then made into a publication which is then published to city council It Is by February should be voted by the city
council taking a step back though and rewinding in December we then start the operational but development that is what keeps the city running that's the general fund spending and we we did a kickoff in December and we accelerated
the the timeline this year to try to meet earlier deadlines and try to have sessions like these and so we had a deadline in January for department heads to submit all their requests and needs which included any new additional Personnel requests any new substantial
expenditure requests that could be hey hey our contractor services are going to be much higher next year you know we would need to know that information during the budget development cycle in mid January those submissions were due along
with goals and accomplishments so they we asked department heads to submit their fiscal 26 goals but we also asked them to look back reflect what did you do well what worked what did you accomplish in the prior year and that's
what department heads submit and you'll see that all part of our publication when we do submit that to the community we then move and we uh we also in January is a notable deadline is that the governor's budget is usually released if there not a new governor
coming into office is usually released in January and the reason why that's substantial city of Chelsea as you'll see in later slides is substantially funded by state funding and so if the government funding comes out and there's
some significant changes you know um whether they're positive or negative we have to understand in a Jer our other budget which is the expense all right and as we move into the next segment February to March over here get it right
here my pointing my shadow pointing we we as I explained before the CIP has submitted the city council but then we did all the submission with the department heads on the operating budget we as budget team meets with Department's heads and discuss the
actual submissions discuss what the actual needed debt through these requests to make sure that we're responsibly spending the taxpayers funds um it's very important that we're not just submitting requests that seem to be
nice to have especially during you know times when it's it's it's we're not sure what's to expect right we're not sure what our funding will look like our our even our federal funds so um we are we we are very careful and that's what we
got through in our in internal Department budget meetings and then we um we move into the next segment of after the budget team bets it out and sits with my with with me we then move it to the city manager level do our
final review and we come up with our final number right now we're we're pretty close but I'm not going to say we're like I said this the drafted uh stage right now because there are some pending items um after this we we we do
wait for an adopted budget from the school committee per per City Charter they have until April 2nd half a school committee approved budget right and then 30 days after that we do have to have a budget document to the city council by the first meeting in
June and sorry I should be I should put my phone to vibrat um um yeah in our first in our first meeting in uh June we hope to have a a budget hearing and an approved budget for fiscal 26 as the city council uh
agrees with how we believe that fund should be allocated sorry I'm sweating a little bit so I am and it's not because I'm nervous because I got a tile on button up to the top so so
are these are key priorities that F 26 so some some of the items that we you know the city management team has kind of discussed things that we feel as priorities that that the city needs and um you know what you'll see is is going
our values come through the budget and the budget decisions and so we're looking at increased investment into public safy so you'll see additional full-time equivalents to both police and fire departments you'll also see that we
put an investment into our future um specifically you know substantial increases to chela Public Public Schools um to support education to give quality education for our students as well as Investments to
Northeast Vocational School um we're seeing increased assessments we'll talk about why we're seeing those increase Assessments in the couple slides um we've had some administrative restructuring and that's to support support efficiency and improve workloads
um we have a couple of individuals here and I like to also give them a shout out um we have Edward Dunn and Alisa Ariana they're they're here um and they're part of the the new budget and Grant Administration team and uh they've done
a lot of work to get us to the point where we're at today with the bud and then last but not least um and this is not the only things we focused on give one second I'm G let my computer do its thing and leave this
um um we've also put support um additional support to city services and public work so we importantly um trying to enhance operational capabilities including bringing vehicle um maintenance in house um so that we can
save on stting on Contract Services um and you'll see that in as we uh go through the high level review of project but before we get into that we talked about how how do we how do we actually provide services we provide services by
collecting Revenue right so in fiscal 25 you'll see that this table here is comparing fiscal 25 budget the the to the what we're projecting for fiscal 26 R um our we have a couple major sources
so what you'll see is taxes taxes is a major source of um of which um we're anticipating a decrease of $8.5 million taxes will include personal property taxes but it also
includes excise taxes those are taxes for motor vehicles that are reg that are registered and garaged in the city of Chelsea it also includes um Hotel taxes meals taxes um
um in addition to power agreements that we may have so also we have charges for other services which is charges for other services includes trash fees and other fees such as motor vehicle marking SE charges and
then a licens and per permits um they these are basically level funding you know based on increases we increase them where we see that there's adjustments that can made but while conservatively projecting Revenue um so in some cases
this not might be our projections might not necessarily be aligned to what our actual receipts are then our findes and forfeits a lot of that is uh tied to some of it parking parking tickets right I'm sure many people get parking tickets I've received
a couple of my days here um and so and and I'll explain a little bit more about that and and so forth the cherry sheet is the the state revenue that I spoke about and so that's a list of items that the state provides reimbursement or
funding for um mainly you will see that's the substantial part of that is Chapter 70 Chapter 70 is a Formula that funds education in equ manner in the state of Massachusetts and then you have unrestricted government Aid or general
government Aid um a and that's also part of the chish amount which is that one is substantially increasing by 8.1 million the substantial uptick in that of that funding is chapter one Chapter 70 which is tied to the student Opportunity Act
um student Opportunity Act was some uh consistent of formula changes that changed how the state would um decide what would be Equitable for students that were economically disadvantaged or income special education or um
multilingual uh learner students so this is a pie chart demonstrating what we are projecting our current revenues to be at um and the chair sheet number may change usually it goes through different stages through
the budget process so that number that I did quot on the previous slide made a just as it makes its way to make Ways and Means at the state level but for the most part it it it shouldn't it wouldn't be it would be immaterial for whatever changes so I wouldn't be coming back to
you later on saying hey this chart looks substantially different where our state revenue is going to go um substantial decrease um but currently the state the state funds over 5 55% of the city's budget through the Cher Revenue the
other large parti as you saw was about a little bit over 9% is tied to the taxes um and I want to make a joke about it cuz I I do it bothers me sometimes but I appreciate the jobs that our um the parking people do um it's a it's a small
amount with actually funds the budget the parking tickets and whatnot it's less than a percent that gives you the perspective of as efficient as we are maybe giving parking tickets you know it is that's not something we make bu not we're trying to make business off
actually we're trying to use it to to incentivize or um activity and movement of our businesses in areas where this part and so here is an overview and a comparison of fiscal 25 to um budget
spending to projected expenditures for fiscal 26 now what I would say is that if you notice I'm not sure for those that were who could see the numbers at the bottom the total the total number down here these numbers St the same so in a balanced budget revenues equal
expenditures that's what they told us in the account right you know I give you a dollar you give me a coffee there's there's an exchange right and so here you'll see that on both sides we're projecting a
$17.5 million increase year over-ear um and in that what I will say is that um you'll see that I'm not going to too long here but the there's there some large stick outs which we'll we'll we'll talk about once again we spoke about
chapter chapter 70 and a student Opportunity Act it requires a substantial uptick as we get additional chapter 78 it also increases the foundation budg which requires the city to provide more to education cuz that is
um it's it's as a need but it also this this budget also reflects what our desire to remain committed in our partnership with the school to public schools and support um you'll see that we'll have an up tip in debt
service that's a substantial percentage up tip it's increase of 1.7 million year over year as well as you'll see Public Safety as I said we're investing in public safety you'll see another 2.1 million substantially going into public safety the area that we don't control is
State assessments so while the state gives us money they also take they give it and they shall take it right and so one $1.1 million are increased in the state assessments that those are the places that we actually do not think all
right similar to the revenue and how the rep the budget is funded here a breakdown in terms of how much money goes into each of the different categories and so substantially education is a big portion we we really
support our future I was one of those kids in the um the school system and I graduated from cha Public Schools um I really value what the schools offer here and I'm glad that we're supporting them in such a manner as you'll see that the second biggest um initiative is public
safety 12.7% of the St you know to it's a lot of organizations 10% is the overhead of an organization and the overhead to run and operate our our agency is at 3.6% which I say it's proud and good that we are operating at that
level of efficiency and if you if you think about it we are also providing our employee Banes at 8% and almost 10% of our budget once again is controlled by state which we do not have any control
so if you remember there was a 7.5 $7.5 million increase so these are the substantial changes that we're projecting and I say that because we once again we this is very early draft phase so Chelsea Public
Schools we we are committed to our education of our students we've been they're going to get they're seeing about a $10.5 million to support the the needs of students in child contractual obligations so we have collecting
bargain agreements most of our workers are in Collective Mar leaders and they're seeing between 3 and 1 12 to 4% increase in terms of cost of living adjustments that's outside of whether they're whether they are entitled to an actual
step increase some salary tables where people each year will get a step increase after successful completion of work um they also get titled sometimes to longevity cling analysis all of those items um weti Spate about a $3.9 million
comes off the top so that limits us to new services and things that we can actually do the provid um we have a a lease agreement with uh uh a large Bank tied to a project that
has a balloon payment in this year it's a onetime payment so in the uh previous Ci City Administration that engaged in the a project that in order to save on interest long-term interest they they
they negotiated agreement to have this balloon payment that occurs this fiscal year it's an uptick of about1 $1 million so that's also making it very difficult for us to adjust the resources
right and and use for items next year this should go down that that that another large increase that we're seeing this year that's not only being seen by us is health insurance so other communities
in the area those that are in GIC and those that are not are seeing increases of about 16% year over year we we have a consultant that uh we worked with for years that is also
projecting a 16% increase but years ago the city city management made a and the city management City Council made a major a made really good decision on how to best use the funds for the city which was to become self-insure and what that
essentially means is that the city would insure all of its employees that means as well as all the expenditures that come with it they receive all the benefits so over the year over the years we've had a trust fund that's gained a
balance so there are going to be good years and there are going to be bad years so we've approaching some of the bad news all right and so um we're seeing a 16% increase in cost however we are going to do a balance
weight approach to this so we are increasing our budget by 10% of the heths and we are going to have to use some of our trust fund balance to weather the store this way that we're not getting
too far behind where the rates are and we're not doing a big shock later on to our employees and to the system next thing is um Northeast vocational school so part of the education funding element is Regional
School payments the Northeast vocational school is a large portion of that those assessments are going to go up substantially this year because of the new school construction so whenever um for the most in most C St especially in
today's climate construction costs are extremely high especially for high schools I believe this school was cting over $300 million so most communities do not have the cash on hand to just pay $300 million nor do they probably
generating enough for to FR each year long construction projects happen so they borrow money and so the the money that's been borrowed has to be paid back and now the way a is going to pay that that is by assessing all the districts
that have students enrolled in the district so the more enrollment you have the more part of the debt you pay so Chelsea is the number two and we we have over 250 students that are uh attend Northeast location and that's the
portion of the debt that we're responsible um is when we over $800,000 in the first year each year that we have this enrolment we will have to pay um this this course that we've you know we've engaged and try try to uh in
different ways to try to look at this differently and try to see if this should be set up differently but um you know we'll keep trying to advocate for that another item is retirement appropriation you have to take off so that is increasing as well that's the
number that we don't control we get it comes from an agency and tells us this is what you're going to pay and we pay contracts we obligated for the waste of trash removal you have a contract that's going to go up by about 7 8% and
that's the the dollar amount so if you add up all these numbers it definitely adds up more than $ 17.49 million right so we had to do some reductions right so one of the areas we looked at reducing was the salary
Reserve last year we had a high salary Reserve because we have a couple of pending Collective Burg agreements um outgoing while we developing the budget so we don't need as much money in the salary Reserve this year we do have I think one unit that's
still um we're still bargaining with and at this point we're we're going to try to have some kind of dollars earmarked as well as any other dollars that are required um for any other changes um such as uh you know when employees are
seeking reclass or we looking to change positions in the toet this is the funding source that you would have a couple dollars in there so so there's a little B of money in here but not much and then we also had to go back and kind of rightsize the budgets we went in and
started to look at well how the department spend in the past um and so we started to see that some departments had a little bit of extra money in there that you know they were turning back money every year why would we budget money there if we need
other other um priorities that so we did do some Department budget deductions um that is leaving me right now with about $400,000 to what we're going to call as budget additions and I will go in to talk about what those are but before I do that I want to talk
about budget efficiencies so budget efficiencies is areas where we can look at in reduce areas of budget where something may be un underutilized or um not providing value to the city from our perspective so
these are the few of the roles that we so we reduce another $238,000 from reducing about 3 and2 positions one is um an emergency dispatch position is been DED for a while uh trying to fill these positions been difficult and with uh upcoming
changes in the department there may not be a need to fill it so um that that POS that position is being removed from the the being budget for fiscal 26 in the assessor's office we had a clerk floating position and fiscal
25 we we we had a person in it at the very beginning and they actually sought for different position in City home it's been left vacant ever since the beginning of that of the year um and so the department through recruitment
practices finding the right count of people and training have determined that there's not a need for this position so at the end of the year we use this position to fund something else which I'll discuss on the next slide we're no
longer funding it in fiscal 26 um and we have some adjustments in the HR department where you'll see that immediately in the next slide where these positions are offsets to some adjustments um and in instruction so you'll see that the human resource
director um Human Resources um has a human resources system that was added so basically a full-time position that's able to better support the the the growing needs of the human resource department and as well we've added a change the HR manager role to an
assistant director role and what you'll notice that that a lot of the Departments um we've been doing like this initiative across a lot of the Departments adding assistant director roles to provide greater support um for the office for leadership for for
additional like support in terms of dundy as well as succession plan um so this is great um for leadership in those departments um as well we have U an additional ad to the police department
um the police department went to a recent schedule change um went to a 4x4 and there was an additional need to cover this schedule this schedule's also helping um reduce the burnout of the police officers which hopefully will reduce the
overtime so this is investment is in ultimately the cost saving measures um as you know we had a lot of fires last year um and so we we want our community to be safe so um the department the fire department's goal
was to get there firefighter count to 110 um right now we were trying to get to 104 with additional four firefighters unfortunately due to the budget constraints we had a cut back and we're
rolling out two fir FS now we are trying to negotiate that leas debt payment and see if we can restructure it um due to the project still being still on going if we can do that um we might look at trying to reach that Target again
at um but right now we have two firefighters the earlier I mentioned about the the Department of Public Works bringing in vehicle maintenance in in house um we will be bringing in a mechanic supervisor and an adding a
mechanic to cover those services so that we can do all of our work in House at a CH and the the position that I talk about not filling an accessors we we had a a community health worker that was originally funded by the American Rescue
plan out um we have now brought that on um to the general fund we saw value in position and we were to eliminate that c of assess cover that at this for 25 and this is like that for the fiscal 26 budget and then there was other various
adjustments to make this all work out which are people switching in to either class changes or out of grade changes or um small changes that are not as noteworthy to be put on the screen um that level out to be about
$225,000 so that's basically it for the operating budget Capital Improvement plan this is um chart to this uh overall see year one of our fiscal 26 CIP and of that of the operating budget
$625,000 coming from that for the total year one we're um budgeting around $19.8 million um to go to these variety projects of equipment acquisition Public Safety surface enhancements um parks in open space being the greatest utility
enhancement and public building facilities most of this is going to be planning to con earnings to our Enterprise funds and our bonded um and and since we are in a great position I'm sorry the most the biggest category to free cast um so long as we keep
generating that so um and then is to provide an arer update arer was supposed to be fully obligated by um um well ARA was is was a Federal grant that communities received it was
an act signed by was divided in March 2021 which was the help of Co recovery uh the city of Chelsea had categories that they had established for the oper standing um and the city had received $4.3 million so the very variety of
projects would have fall in one of these categories um besides administrative expenses we have Capital Improvements and Acquisitions so um an example of this project would be the emergency uh 911 renovation project um we've also had projects like
environmental health food security housing projects whether that's trying to help uh the the development of more affordable housing or acquisition of housing um there was mental health and mental and behavior health initiatives um a minor amount towards Public Health
um there was small development uh Business Development um where there was incentives to try to support small businesses or start new small businesses and then Workforce Development um this all a total to the 40.3 so last time we reported this we we had we we're
at the point of obligating all funds we had to obligate at least $15 million more funds at this point we obligated everything we're at 25.4 million spending and we have about $14.9 million left to spend now what's important about this and the reason why it ties to the
budget is that we will continuously assess the programs that are funded by AR some of these programs might be valuable and Worth to consider to incorporate in the future services that should continue going forward but they would also have be compared to current
programs was not something where which is added to the budget something else may need to be removed to cover those programs so um it was it was lovely to get $40 million of funds and we'll continue to spend responsibly and continue to the community uh this is another visual
representation about by uh categories about where percentage wise where each of spending is that and then obviously we spent a lot more money in Capital Improvements that supported the city um with using uh ARA funds and then I want
to get to West I feel like I'm moving pretty quick but um there you missed anything you can ask me questions at the end so what's next April we intend to well by April we continue to hopefully have this budget Cline tuned and ready
to go um we'll have another need for a budget presentation um that be a refined version of this a little shorter um we'll have a release of the fiscal 26 budget book and hopefully we'll have a new online portal that will also
represent uh a new transparent way of looking at our budget book that's been worked on with the communications team under Devin fields and U Li Martin and um with the budget members here um for open go and then we will have budget
meetings with city council I believe in May 12th to May 14th um there's a few days where we have F city council and go over our budgets with them and with the department heads we will then move to June for a budget hearing and hopefully the city council will vote to approve
this budget and then uh July will'll implement the budget and uh I just want to thank you all for being like bear with me through this process through this budget uh it was I was honor for me to present to you all today and I just want to make sure you
we sure that um a lot of energy and effort goes to building this budget and we I mean I love doing it I love serving this community um we're just committed to trying to fund what we believe are the essentials um definitely given the
uncertainty at the federal level we are not like really inclined to fun the nice to haves at the moment um the federal uh decisions that could significantly impact places like the state of
Massachusetts and city of Chelsea um so we we can't just build a budget around worst case scenarios nor would we about to build multiple budgets at this point in time during this level of uncertainty uh at this point I encourage you all to
ask questions engage any questions I just have a I have a general question the school budget is that it's most of the budget is that like in all cities yes in
many cities um schools are very expensive yeah you know between 60 65% in most places um and so we're we're slightly under 60% so it's a great question but I just think that you know
um and a lot of times I I would say school performance school and how schools work is also reflection into property values it's it's it it's more than just you know um just a dollar and the bo soort of speak it's also it's
important to fund the future right you know um fund people like myself to get up here and come back and serve the city CH and you know make sure that you come back to City ch any other questions thank you for that question wow I must have been really
informative if there's no other questions yeah sure question so or feedback give me feedback too listen I was Googling a lot of the terms you were using okay not going to lie
with full time and what it mean hard you know uh but so I'm really excited that we have this actually before was fin uh how can community
members support this process the capital Improvement plan already was presented back in jary I saw a few of the slides uh um how it was to SP so how can I
help guide here this process where do I act yeah that's that's a great question well first off I think this this meeting was the first of its com right and the goal was to hopefully have participants
come here provide feedback um and we would like to double down on this next year and if it first starts with the city creating a process that's uh more more open and collaborative so we're going to do that for the next budget
cycle meaning we'll come up earlier and do more of these types of presentations that are not per se me talking outward and telling you what's happening but um more just SOL listening feedback and giving real just Trend data and moving
forward and just handling communities and probably at different locations I think it makes sense not just to do at the senior center finding Community tets where where people feel comfortable going into a building and they know where it's at um another two is you know you have my information right um a lot
of people have do have connect uh like connected devices you know reach out to the contacts on the website send we have an email address that can send um questions through or concerns through and that get fed to the right people and
they do respond and they do answer so I think that's another way you currently can do that um and uh am I missing anything Mr malz or Mrs SKS so that I think apparently that's I think the the venue is to do that obviously you can talk to your counselors right your
council is a very great sounding board to that they will come and reach out and let us know on any feedback that they're hearing as well thank you for that all right [Music]