The 1,000 signatures are in. Thanks to everyone for your continued support!

Come join us for the Kick-Off Party on Thursday June 10, 2010 7pm – 9pm at the Blue Shamrock

2011 proposed City Budget Attached is a copy of the Proposed 2011 City of Lowell Budget

It appears the Manager and his staff have done a very good job considering the State cuts in keeping services here in Lowell. The Budget Meetings begin next week.

Here are a few highlights of the 200 page document:

A summary of the Fiscal Year 2011 budget would certainly recognize the continued difficulties of City’s finances as a result of decreased state support over the past two-plus years. It would also recognize the difficulties of managing employee/retiree health insurance costs absent relief by the state in implementing plan design changes which could save the City’s taxpayers $3-4 million that could be used for restoring services, investing in infrastructure, building reserves, or providing tax relief.

The budget document that follows this letter is probably the most information laden that has ever been presented in the City of Lowell representing a continuation of the past three years as we have sought to add greater information to the dollar figures that most people envision when thinking of a budget. The intent of this effort is to make the document a tool for providing a better understanding of municipal finance including how the City derives its resources and how they are utilized

ECONOMIC IMPACT: STATE
We are, hopefully, nearing the end of an extremely difficult economic cycle.
During Fiscal Year 2009 the Commonwealth’s response to the economic downturn was to institute mid-year budget reductions known as 9c cuts. Lowell responded by reducing our budget by some $3 million, $600,000 of that coming from the schools. We accomplished these cuts by suspending hiring, enacting controls to reduce discretionary spending and persuading our bargaining units to accept furloughs.
Massachusetts felt the brunt of the financial crisis beginning in Fiscal Year 2010. The state revenue situation required extraordinary budget cutting, including unprecedented reductions to local aid. Local aid cuts in 2010 dwarfed even those from 2003-4. For Lowell the effect was disastrous. With local aid comprising 50% of our General Fund revenues, we are much more vulnerable to state aid fluctuations than many surrounding communities. Locally, aid declined from $156,618,643 in FY 2009 to $143,587,798 in FY 2010, a cut of more than $13 million. Assessments to the state cost us an additional $600,000. All told, the effect was just short of $14 million.

Net school aid had been reduced to pre-2008 levels. While that is no small challenge, net general unrestricted aid was cut to $22,576,838, $1.3 million less than it was in 1990. Unrestricted aid is used to support everything from road repair to funding the local obligation to our schools. By contrast, even though school aid was cut, it remained at a level that was 3.6 times the 1990 level.
Even though the trend moderated in 2011, there were further cuts.

Lowell’s Response
Throughout 2009 we elected not to fill most vacancies. This allowed us to reduce staffing in 2010 with only a small number of layoffs. Our unions, with very few exceptions, cooperated by deferring cost of living increases to 2011. In addition, we had successful separation incentives. Finally, we were able to secure grant funding to maintain, for the most part, public safety staffing.
From 2009-2010 we reduced public safety headcount by 3%, general government by 14% and public works by 28%. In total, staffing is down by 10% from 2007 to 2011, despite having many more grant funded employees now.

FY2011 Challenges and Context
The outlook for Fiscal Year 2011 presents an additional set of challenges including:

The deferral of salary increases that were to occur in FY10 will now begin on 7/1/10.
Employee and retiree health insurance costs, while improving, are estimated to increase by 10%.
General purpose local aid is projected to be reduced by another 4%.
Chapter 70 education aid is projected to be reduced by 3.7%.
Local receipts

Over the last 17 years an increasing share of the overall school budget has been assumed by the state as a consequence of the 1993 Education Reform Act. However, this should not be interpreted as a reduction in the City’s support for the schools. Over that same period of time the rate of growth in City spending for education has exceeded spending on discretionary non-school spending. This is particularly true over the past four years. In 2009, for the first time ever, the City met and in fact exceeded the state determined minimum spending requirement.

In recognition of the importance of the Lowell public schools to the City the FY11 budget proposes an increase of $1,170,000 over the level of direct school spending in FY10. This amount is in addition to the projected increase in indirect school spending for FY11 plus capital spending.

FY2011 Priorities
Because budgets and funding mechanisms have changed dramatically over the last few years, we have attempted to maintain stability in the 2011 budget. Where possible, we have attempted to apply additional resources to the priority areas of education and public safety.

The schools have been hurt in 2011 by reduced Chapter 70 aid. We have tried to offset this loss by increasing our local support of the schools. In fact, outside of benefits, the locally-funded school portion is where our budget grew the most, from 5.85% of General Fund expenses in 2010 to 6.25% in 2011.

One million dollars of this funding will depend on legislative municipal relief. Pending municipal relief legislation contains a provision to allow retirement boards to extend the deadline for fully funding liabilities to the year 2040. We anticipate that doing so will save us $1 million in 2010. Because the legislation has not yet been approved, rather than directly increase the school’s appropriation, we have created a reserve in the Manager’s Department to benefit the schools. Upon approval of the legislation, acceptance by the local retirement board and recalculation of the assessment, this money will automatically transfer to the schools.

If for some reason one of the following occurs–municipal relief legislation is not enacted, the final law does not include this provision, or the local retirement board does not extend the funding schedule–the administration has a contingency plan that will generate the $1 million. This contingency plan is a less attractive option, but it can be enacted locally.

What you will also see is a description of what each dept does and an organizational chart. Personal for each dept. is listed in the back rather than with each dept. as was done in the past. Lots of information to review.