This presentation was originally made at the June 14th Medford City Council meeting.

Medford’s City Budget is in crisis. Long-term underfunding means shrinking city departments, worsening conditions in schools, no plan for crumbling roads and buildings, and any potential hindrance, like the inaccurate revenue assumptions in FY23 budget process, derailing the City’s progress.

See the full presentation below or click here for a PDF link.

Medford doesn’t raise enough revenue to pay for the level of city services, public schools, and building and infrastructure maintenance that our residents deserve. The reasons, like Proposition 2.5 revenue limits and lack of commercial development, go back decades.

The City was headed off of a budget cliff before COVID, and ARPA funds are just helping to bridge the pandemic-induced gap. If COVID and the pandemic impacts had never happened, Medford still would have faced a massive budget shortfall between what we spend and what we need to spend to meet the needs of the community.

The Mayor’s FY2023 Proposed Budget before June 1st had an $11.25 million structural deficit (using one-time funds to balance budget) and estimated needs deficit (difference between what we spend and actual spending needs) of over $41 million.

The FY20 structural deficit was $0. From FY21 to FY23, the City used free cash reserves & ARPA revenue replacement to balance the budget, creating a structural deficit. The needs deficit has also increased over that period, making chronic lack of public services even worse.

Key takeaways of our long-term budget issues:

1. City budget has an unstudied and unknown needs deficit
2. Starting in FY21, the city budget began to have a structural deficit
3. We need a plan to address issues 1 and 2, and our options are limited.

The FY23 Budget Process rested on inaccurate assumptions that led to last-minute cuts to the proposed budget. The administration assumed $7-8 million+ in ARPA revenue replacement, but staff and consultants told City Administration leaders for months that the assumed figure could not be guaranteed.

After the CFO position sat vacant for 10 months, the new CFO started in May 2022, cleaned up the books, and a real calculation was made of only $4 million in ARPA revenue replacement. This led the City Administration to make last-minute reductions across the FY2023 proposed budget.

If transparent communication to the City Council, city and school staff, and the public about the revenue uncertainty had occurred earlier, the City could have prepared for multiple revenue scenarios and would not have been blindsided by last-minute reductions.

I ask my fellow community members to attend the June 28th Council meeting and speak up, to contact the Mayor in support of the recommendations below, and organize community campaigns to address our long-term budget needs deficit.

Implementing the five recommendations below will help the City Administration restore community trust, create a collaborative working relationship in city government, and bring the community together develop a long-term plan to build a better future for Medford.

Recommendations to Address Long-Term Budget Needs

1. Determine the actual budget needs deficit for the City of Medford’s operating budget and capital needs

2. Mayor develop and release a revenue generation plan to meet budget needs deficit, set goals and benchmarks that can be tracked, and provide a clear and reasonable timeline over next 10 years

Recommendations to Address Short-Term Budget Problems

3. City Council and School Committee hold Mayor accountable to release all information and clear timeline for assumptions about the FY23 ARPA revenue replacement calculation that led to FY23 budget cuts

4. Mayor must release a full accounting of ARPA funds spent in FY21 & FY22, share how much is remaining in ARPA funds after FY22, and outline the timeline and spending plan for remaining ARPA funds

5. By July 14, 2022, the Mayor must demonstrate that a Proposition 2.5 override is not needed to end short-term structural deficit and avoid more budget cuts in the FY24 budget as previously stated

I am hopeful that we will make progress, restore service cuts made in FY23, and be able to end the austerity and budget cuts before the FY24 budget. Please reach out if you have any questions or concerns. My goal is to keep the community as informed and updated as possible as the FY23 budget process continues.

In Solidarity,
Zac Bears
Medford City Council Vice President