Setti Warren, Newton Override

City of Newton Fiscal Budget 2017

Dear Resident,
Earlier tonight, I was pleased to present to the City Council my proposed budget for Fiscal Year 2017.
Below are some highlights from my remarks this evening, as well as links to the full text, and the budget document itself. I hope you will take a moment to read it through.
Thank you.

City Finances

Before I first took office 6 years ago, our budget was not oriented towards delivering outcomes for Newton residents. In 2010, our finances were in bad shape and the outlook was bleak:
  • the City was facing an annual structural deficit projected to be more than $40 million by 2013;
  • our expenses were growing by 2 percentage points more than our revenues every year;
  • there was no emergency or rainy day reserve account;
  • our pension trust fund had suffered a significant loss in principal;
  • we had not even begun to think about addressing our other post-employment benefits, or OPEB, which is “health insurance for retirees”; and
  • our triple A bond rating was in jeopardy.
Through hard work and dedication and an unwavering, disciplined focus on a strategy of zero basing our budgets, making data-driven financial decisions, and restructuring our union contracts we have been able to eliminate the structural deficit and get our expenditure growth in line with our revenue growth.
In addition to balancing our budget, we recognized that it was important to establish a reserve fund for emergencies or catastrophic events.  I am proud to announce that with the City Council’s approval of the Rainy Day Docket Item and this budget, we will begin FY17 with almost $19 million, a full 5% of our FY17 operating budget in a rainy day reserve.
Our pension fund, which had suffered significant losses in the crash of 2008, continues to be a top priority.  And while it was acceptable when I first took office to have a plan that fully funded our pension liability by the year 2038, financial sustainability requires more. Therefore, this budget includes an increase of $1.9 million to continue to support a funding schedule aimed at fully funding the City’s pension liability by the year 2029-almost a decade ahead of schedule.
Commitment to this funding schedule is an integral component of my administration’s plan to address OPEB liabilities and is therefore key to the City’s long term financial stability strategy.
Recently, we announced that a third party actuary has confirmed the Administration’s funding strategy, which will enable the City of Newton to eliminate the City’s unfunded pension liability by the year 2029 and the OPEB liability by the year 2042.  The actuarial valuation of the City’s OPEB Liabilities for the fiscal year ending June 30, 2015 confirms the administration’s plan is financially sound and sustainable. The valuation by Financial Risk Analysts, LLC, is in keeping with the national standards of practice of the actuarial profession and is in accordance with Governmental Accounting Standards Board Statement 45, or GASB-45. The FY17 Budget contains a $350,000 increase in the OPEB appropriation, with that allocation now totaling more than $1.7 million.
And finally on our finances, not only have we been able to maintain our triple A bond rating with Moody’s Investor Services throughout the past 6 years, this year for the first time we went beyond and also asked Standard and Poor’s to rate the City. As many of you know, in January we were pleased to announce that Standard and Poor’s also assigned a triple A rating to the City, citing, and I quote, “strong management, with ‘good’ financial policies and practices under our Financial Management Assessment methodology and strong budgetary performance, with balanced operating results in the general fund.”
This is a major achievement. With this double triple A rating, the City of Newton has joined a very small group of municipalities who have earned triple A ratings from these two highly regarded institutions.
As you’ve heard me say many times before, education is the bedrock of our community. Our commitment to preparing all of our young people to meet their full potential is unwavering.
The Angier School has opened on time and under budget, the Zervas School community has moved to Carr, as part of our comprehensive, multi-year school facilities plan. A plan that is smart about using swing spaces to minimize disruption as well as embark on an aggressive school buildings upgrade plan in the most cost effective way possible.
The Cabot School project continues to meet major milestones and in September our pre-k program will be moving to the recently acquired Aquinas property and the Ed Center basement will be renovated to house Central High.
Additionally, the School Department budget highlights investments in both students and staff to ensure Newton continues to deliver a high-quality education to all students. In developing the FY17 budget, NPS paid special attention to dedicating significant resources to continue to improve student achievement, close the achievement gap, and support the positive social and emotional development of all of our students.
Over the past five years, achievement gaps in high school English language arts, math, and science MCAS have narrowed. We have seen significant increases in the enrollment of traditionally underrepresented students in higher-level classes at both high schools. This initiative began as a pilot at Newton North and has now expanded to Newton South. The schools continue to expand special education programs so that most students can be educated within the district.
NPS continues to pilot exciting initiatives in the area of science and technology. This year, the DaVinci Program, an interdisciplinary project based approach to learning science, technology, engineering, arts, and math, is being piloted at Newton South with 10th grade students. This successful pilot will expand to 11th graders next year. Schools have introduced the teaching of computer coding at the elementary level and plans are underway to expand coding lessons in the coming year.
Condition of Roads
Six years ago my administration inherited crumbling roads and sidewalks and no comprehensive plan for maintaining and updating our city’s infrastructure. Addressing this serious need has been another priority of my administration and that has been-and will continue to be-reflected in our budget strategy as we invest in our infrastructure and look at our community’s needs in the coming decades. We continue to use the $1 million dollars allocated from the override in 2013 each year to make sure we have safe, updated infrastructure. We are working extensively on upgrading our sidewalks and intersections to be ADA compliant, making them safer for all pedestrians. In FY17, we are installing over 300 ADA compliant ramps at 71 intersections across the City.
This year, for the first time, under the direction of Public Works Commissioner Jim McGonagle, the City will be using a data-driven approach to our streets with StreetScan, a pavement inspection service that utilizes rapid-sensor inspection technology to diagnose surface and subsurface roadway defects. StreetScan was also a 2015 MassChallenge finalist. Working with them will provide us with the data, tools, and cutting-edge methods that will help us formulate optimum strategies to maintain and improve our roadways. This will produce an organized data-driven approach for pavement management.  This technology will lead to our development of an accelerated street paving action plan based on empirical data and best practices. We expect to present this accelerated action plan to the public in the fall because we know how important it is to have quality roads and sidewalks in our city.
Smart-Phone App Parking
I am also pleased to announce that this summer the City will deploy a citywide mobile parking app, which will allow any driver parking at a metered space to have the option of paying either by phone or by coin. We believe this will be immensely more convenient for visitors to our village centers and are excited to roll out this parking initiative.
BigBelly Trash/Recycling Units
In addition to the items listed above, this year’s budget includes the installation of
340 BigBelly smart, solar-powered stations, many with compactors to enable the City to improve waste and recycling management volume, collection, and efficiency by delivering real-time data to a web-based dashboard.
To view the full text of my remarks from this evening, please click here.
To view the budget in its entirety, click here.
Setti D. Warren
City of Newton, MA
Setti Warren, Newton Override
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