Unless Newton overhauls its budgeting, the city could face an $8 million shortfall next year and a gap as large as $25 million by fiscal year 2016, Mayor Setti Warren said Monday.
‘‘Not changing the way we do business is not an option," Warren said in an interview before he presented his five-year financial forecast to the Board of Aldermen Monday night. "We can’t stay with business as usual."
According to Warren, business as usual in Newton involved using free cash and the city’s capital stabilization fund to make revenues and expenditures match - a practice that he said can paint a false picture of a city’s fiscal stability.
"What we needed to do, and what we have done, is provide a snapshot of what our revenue line and our expenditure line really look like," Warren said.
One way Warren and chief financial officer Maureen Lemieux want address the budget gap is through zero-based budgeting, which requires department heads to justify expenditures before budgets are allocated.
Other strategies include mapping the performance of city departments, collective bargaining with the city’s unions, and encouraging economic development.
"If we pursue these strategies aggressively, not only am I confident that we will be able to address our budget needs for 2012, but it will also put us on the right track for the next five years," Warren said.
However, Warren and Lemieux added, the budget forecast does not include the numerous infrastructural improvements needed throughout the city.
A separate report details some of the highest priority capital projects in the city, including an estimated $15 million needed to complete demolition of the old Newton North High School.
"We were very conservative with that estimate, and hope to see it come in at around $7.5 million," Lemieux said. "If so, that would mean that the entire Newton North project would come in at just under $190 million."
Newton North is not the only school in need of repairs. The capital improvement list sets aside $5 million for high priority renovations to other schools. The district is still identifying the schools most in need of repair, and will hold a special school committee meeting to address repair questions on Oct. 20.
"Currently, the school department is vetting numbers on enrollment projections, which are expected to keep rising," Lemieux said. "That’s another concern."
Warren said his office had hired a new buildings commissioner, Stephanie Gilman, to conduct a thorough capital improvement assessment of all roads, buildings, and public facilities in the city. The assessment is expected to continue until June 2011, and will be informed by a series of town hall meetings Warren plans for residents to express opinions on repair priorities. The meetings will begin in November.
Warren said that he is not anticipating requesting a Proposition 2 1/2 override in fiscal 2012, but he will wait to hear from residents and Gilman before making a final budget proposal.
Sarah Thomas can be reached at firstname.lastname@example.org.