Proposed City Operating Budget for FY2007 increases 3.7% to .5 million

City Manager O’Brien says fiscally sound spending plan is within City’s means

For Immediate Release - May 23, 2006
Contact: Bob Bliss 508-799-1175

City Manager Michael V. O’Brien today released the proposed City Operating Budget for FY2007 of $465.5 million, calling it a fiscally sound balanced budget that controls major cost centers, directs resources to public priorities and restores municipal services for taxpayers.

The proposed budget presented to the Worcester City Council today increases spending by 3.7 percent or $16.2 million. In recent years, increases in City revenues have been about 4 percent. O’Brien called the increase in this budget sustainable over the coming fiscal year and for future years.

“As City Manager, my unwavering commitment is to fiscal discipline through policies, programs and management practices that will keep the cost of City government within revenues. Throughout this budget, painstaking consideration has been given not just to the FY2007 impact of budgetary decisions, but to the sustainability of programs over the long-term,” O’Brien said.

The City Manager proposed to apportion the additional revenue available from an increase in state aid, the property tax and departmental revenues to:

A continued commitment to education by increasing funding for Public Schools by $7.9 million
Negotiate wage and benefit increases of $4.55 million based on the 9.25 percent model employee contract dating back to FY2004 with the expectation that current employees will pay20 percent of health insurance costs
Add $2 million for new streets and sidewalks to match $6.9 million from capital funds and grants
Pay $676,000 more for energy expenses to help cover a 100 percent increase in natural gas and other heating costs, and a 20 percent increase for transportation
Increase the snow removal account 23 percent or $300,000 to begin to properly budget and cover this expense
Improve quality of life programs, operational necessities and increased municipal service delivery by $1.9 million

To assist in making these and other increases available, the City Manager reduced the budget by $2.9 million through adjustments, cost reductions and program elimination necessary to ensure structural budget balance.

O’Brien said the increase in support for public education still leaves the Worcester Public Schools with a potential deficit between $8 million and $10 million for FY2007.

He said the impact of the 9.25 percent model employee contract, with the provision to have current employees pay 20 percent of their health insurance and new employees 25 percent, would save $10.2 million when put into effect for all employee groups and unions.

Without this reform, “Worcester’s taxpayers would be paying nearly $80 million for employee health insurance costs in FY 2007. These savings are due to the diligent and steadfast efforts of the Worcester City Council to support my work in this forward-thinking and mutually beneficial model contract,” O’Brien said.

The infusion of $2 million in cash to augment a $6.9 million investment in streets and sidewalks using capital and Chapter 90 funds will provide almost $9 million for “well maintained streets and sidewalks, elements of our public infrastructure that are indispensable for day to day quality of life for our residents and for economic development,” the City Manager said.

The additional $1.9 million for quality of life programs includes a new Housing Code Enforcement Director, additional funds for Veterans Services, the purchase of new technology in the Police and Communications Departments and two new positions to implement technology solutions citywide, and an increase in the Public Works and Parks Department to maintain parks and core services.

“I respectfully request City Council, and this community, to review, to deliberate and to consider approval of this recommended FY2007 Budget. My intent is to maximize our taxpayer’s return on the dollar value expended, to keep costs low, and to restructure government so that we can channel new dollars towards direct municipal and educational services and to enhance our quality of life,” O’Brien said.