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Somerville faces $8.1 million budget shortfall

Posted by Alix Roy  May 13, 2010 09:04 AM

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Somerville is facing an estimated $8.1 million budget shortfall for fiscal year 2011, which starts July 1,  caused largely by decreases in state aid combined with skyrocketing health insurance costs, Mayor Joseph Curtatone announced this week.

To close the gap, the city will be forced to eliminate personnel and raise fees while examining new ways to deliver city services, he said. Certain departments could be subject to restructuring or partial outsourcing if it means maintaining services at a lower cost to taxpayers, he added.

“If I can deliver a service with five people instead of 10, I will,” Curtatone said in a press conference on Wednesday. “There will be some positions eliminated.”

Those positions will not likely be coming from the Police Department, which Curtatone said would retain its staff through the next fiscal year. The following year “is a different ballgame,” he said.

Health care costs remain the single largest expense for the city and are expected to increase by $4.2 million next fiscal year. If those figures hold true, Somerville will be spending its entire state aid allocation on health care in fiscal  2011, Curtatone said.
 
“There's really no relief in sight right now,” he said.

Last year, the city took steps to reduce health insurance costs by negotiating lower contributions with unions and reducing the number of employees on the plan, shaving $2.6 million off a $9.75 million gap. This year, Curtatone said he will not support any contract renewals that do not address further savings with regards to health insurance. In addition, no salary increases will be considered, he said.

“We've got to respect the taxpayer dollars,” he said. “There's going to be shared pain and sacrifice.”

The city is already using $1 million from its $3 million rainy day fund to make up for decreases in revenue, but Curtatone said he would be hesitant to apply any more one-time fixes.
 
“We need to act today with an eye toward tomorrow,” he said.
 
Maintaining municipal services remains the goal this budget season and Curtatone said select capital projects – such as the rebuilding of the East Somerville Community School - will remain top priorities even if it means asking taxpayers to approve a debt exclusion to free up funding.

“The school will happen,” he said. “We're committed to that.”

On Wednesday evening, Curtatone gave his first presentations on the operating budget  to the School Committee and the Board of Alderman.. A final plan for closing the $8.1 million gap will be presented for approval in June.
 
“We want a budget that allows us to grow,” he said. “We have to bold and we have to be courageous.”

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