City Manager Submits FY16 Budget. FY16 Budget Hearing Schedule

A Message from the City Manager:

To the Honorable, the City Council, and the residents and taxpayers of Cambridge: 

I am pleased to submit for your consideration the proposed Operating and Capital Budgets for the City
of Cambridge for FY16 as well as the proposed FY17-20 Operating and Capital Plans.

This Operating Budget of $545,870,875 represents an increase of $15,011,510, or 2.83%, over the FY15
Adjusted Budget. The proposed Capital Budget is $85,276,290.

The FY16 Budget sets a bold agenda for the City that closely links with the priorities established by the
City Council. In the pages that follow, you will find the City Council goals and the City’s FY16 Key
Initiatives, which highlight growth in programs and new initiatives such as expansion of curbside
organics collection and a new STEAM Coordination Office. I encourage readers to review each
department’s budget narrative in detail to gain a deeper understanding of the department and its FY16
objectives and performance measures. Each capital project is also described in depth in the Public
Investment section.

Link to FY16 Budget Hearing Schedule

Download FY 16 Submitted Budget (PDF)

View FY16 Submitted Budget on Open Data Portal

View Key FY16 Initiatives (PDF)

FY14 was another remarkable year financially for the City. Our sound financial practices have left the
City with substantial reserves, including $160,500,000 in free cash, $134,000,000 in excess levy capacity,
$15,600,000 in Parking Fund Balance, and $9,700,000 in Water Fund Balance. It is anticipated that the
City will also end FY15 in a very strong financial position.

The City has used $33,430,000 in free cash to date. Major appropriations include $12,650,000 to lower the
property tax rate, a $12,000,000 transfer to the Debt Stabilization Fund, $6,000,000 to cover winter 2014-
2015 snowstorm expenses, and $1,500,0000 for the feasibility study at the King Open and Cambridge
Upper Street School. The City is also looking into acquiring land for a Public Works / municipal facility,
which will be funded through free cash.

The biennial citizen survey was conducted in September 2014. Survey results show that 89% of
respondents indicated the “overall quality of life” as either excellent or good and 92% of respondents
indicated that Cambridge was either an excellent or good “place to live.”

We will continue to use our five-year financial and capital plan, debt, and reserve policies and the City
Council goals as a guide in our long-term planning to maintain stability and predictability in our
budgeting and financial planning processes. Our financial projections indicate that we will be able to
produce future budgets that will reflect a moderate growth in the property tax levy, which is our
primary revenue stream. In addition, the City is projecting stable valuations in the near term with
moderate increases in the out years based on new construction, appreciation in values of existing
property, and major rehabilitations.

Major priorities that will impact the budget in the near-term include construction of the King Open
Elementary/Cambridge Street Upper School, Citywide planning efforts, redevelopment of the Foundry
Building, and recommendations from the Early Childhood and Net Zero Task Forces.

While overall economic conditions are steady, there are some uncertainties we will be watching in the
next fiscal year – most notably, the impact of possible federal and state budget reductions. The long-term
outlook for Cambridge continues to be very strong as long as we continue to efficiently manage
operations. This has been confirmed by our continued AAA bond rating. We have been able to absorb
operating and programmatic costs associated with expanding services, cover increased salary and fringe
benefit costs, and manage debt service costs with an aggressive capital plan.

The City Council and City Administration understand that choices made today impact future spending
decisions. Our effective short and long-term financial, economic, and programmatic planning strategies
will help ensure that Cambridge can continue to provide the level of services that residents desire while
maintaining the modest tax implications taxpayers have come to expect. I believe that the initiatives and
spending priorities recommended in this budget submission reflect not only the goals of the City
Council, but also the priorities of the residents and taxpayers of Cambridge.

Yours very truly,

Richard Rossi
City Manager

 View Entire City Manager Message (PDF)