In these difficult economic times, the importance of sound fiscal policy in local government cannot be overstated. Taxpayers count on City government to deliver cost-effective, high-quality services, while serving as the steward of public funds. When I took office in 2006, New Bedford had a $1.5 million deficit in its budget and $8,675 in its reserve account. To balance the books, the City had proposed the sale of the Civil Defense building on County Street, along with the police shooting range in Dartmouth. I rejected the sale of our assets as a mechanism to bridge the City’s budget gaps, and committed to put the City’s financial house in order.
Over the last six years, my administration worked diligently with the Department of Revenue (DOR) to strengthen our finances and, as a result, New Bedford is financially strong as it enters 2012. Our goals have been to balance the need to provide critical and efficient City services to our residents, with the need to keep taxes at an affordable rate for homeowners and commercial taxpayers. We pursued resources from every possible source, took advantage of every program and partnership, and used legal avenues to ensure that the City receives the funding to which it is entitled. New Bedford’s success was based on the City’s financial team working with each department to analyze their budgeting and accounting records, ensuring expenditures were controlled. I reviewed each budget for completeness, accuracy, and conformance with procedures and regulations.
Despite a dramatic decrease in state aid—a drop totaling $9.6 million, or 31.3% from $30.8 million in 2008 to $21.1 million in 2012—New Bedford has held its tax levy without an increase for three years of the six years that I have served as Mayor (2008, 2011, and 2012). Taxpayers can rest assured that the annual automatic increase to the tax levy by 2.5% is no longer the practice in New Bedford.
The City of New Bedford finished each fiscal year of my six years with a positive bottom line, giving us the ability to certify free cash. Prior to Fiscal Year 2007, free cash had not been certified since Fiscal Year 2002. Notably, from Fiscal Year 1982 through Fiscal Year 2006, the City only had free cash certified by the DOR a total of six times. Certified free cash relieves pressure on the City’s budget, helping alleviate the residents’ tax burden. I am pleased to report that the total amount of free cash certified for the City of New Bedford in the last 6 years is now $20,099,093. Further, we have increased our reserve account from $8,675 to $5,726,798 as of the end of Fiscal Year 2011. The new free cash certified by the state DOR for Fiscal Year 2012, totaling $1,313,326, will bring the account to over $8 million. The City’s short-term debt decreased by $46.5 million dollars, from $76.4 million in FY06 to $30.0 million on June 30, 2011. The City’s long-term debt also decreased by $7.7 million, from $200.4 million to $192.7 million on June 30, 2011.
With the cooperation of our employee unions, the City for the first time in 50 years put its health insurance out to bid twice, saving millions of dollars in health care costs. We utilized federal government auctions to replace aging vehicles in our fleet, and secured state and federal funding to help offset the cost of operations. Over the past six years, the City of New Bedford received $8.7 million more in federal grant funding—from $35.5 million in 2006 to $44.2 million in 2011. These grants support many functions of our government.
We have worked closely with the Massachusetts School Building Authority (MSBA) to improve the oldest elementary school building stock in the state. In 2010, we applied for and received 90% reimbursement on the Sea Lab building and the new Lincoln School. In addition, the City executed the project funding agreement for Keith Middle School in the amount of $74.2 million, or 90% of the total $82.6 million budget, and the McCoy Field House in the amount of $3 million, or 90% of the total $3.3 million budget. MSBA is also helping to fund the remediation of New Bedford High School.
The City Solicitor successfully pursued reimbursement from the former operators and owners of the New Bedford Railroad Depot property, located on Herman Melville Blvd. The City has entered into a settlement for $3 million for claims related to the environmental clean-up of the former Railyard.
As a result of all of these efforts, for the first time in five decades the City Bond Rating was upgraded by Moody’s from a “Baa1” rating when I took office in 2006, to an “A3” rating in 2007, to an “A1” rating in 2010, which continues today. This upgrade saves our taxpayers money each year.
Despite the “Great Recession,” New Bedford has experienced the strongest level of new growth in the Commonwealth outside of Boston. These economic projects create new jobs and expand New Bedford’s tax base. Continued expert fiscal management, will allow New Bedford to accelerate the City’s positive momentum. Sound fiscal management is the keystone for a successful local government, and with it, New Bedford’s future new growth and development will continue at a strong pace.