City Council

City of Salem, Massachusetts “Know Your Rights Under the Open Meeting Law, M.G.L. c. 30A ss. 18-25 and City Ordinance Sections 2-2028 through 2-2033.” The City Council Committee on Administration and Finance co-posted with the Committee of the Whole met in the Council Chamber on _June 10, 2025______________ at ______6:00_______P.M. for the purpose of discussing the matters(s) listed below. Notice of this meeting was posted on ___ June 4, 2025__ at ___ 1:40 P.M. (This meeting is being recorded) ATTENDANCE A&F - Merkl (chair), Harvey and Davis. COW – Cohen & Morsillo. From the city – Mayor Pangallo, Lisa Peterson, Chief of Staff, David Greenbaum, Health Agent, Anna Freeman, Director of Finance, Stephen Cortes, Director of Assessing, Kristen Lindberg, City Treasurer, Anthony Delaney, Chief Procurement Officer. ABSENT WERE: A&F – Stott & Watson-Felt. COW – Jerzylo, Varela, Prosniewski & Hapworth. SUBJECT(S) Health Department Finance Collector Assessor Purchasing (Admin. & Fixed Costs) Treasurer (Admin., Debt, Assessments, Pensions, Medicare, Municipal Insurance, Enterprise Funds, Sewer/Water Assessments, Short & Long-Term Debt, Insurance) Finance (Finance & Budget Transfers Out) Capital Improvement Plans Merkl - The agendas are posted on the city calendar, which include a link to the fiscal year 2026 proposed budget and other financial information, including the 2026 budget in brief and overview of budget priorities, timelines, breakdown of revenue sources, and where your money goes and we are starting tonight with the Assessor, Stephen Cortes, in section 3, page 290. Cortes - The assessing department follows an annual cycle with property inspections as a key routine task per Mass General Law requirements. The department values all real and personal property and prepares tax billing commitments, including motor vehicle and boat excise taxes. The team includes 2 principal clerks, 2 assistant assessors, a director of assessing, and 3 board members. Daily duties include inspections, customer service processing abatements and exemptions and maintaining property records, permits and tax maps. The department also manages new growth revenues that increase the tax levy which funded 56% of the city's budget last year. In FY26, Salem enters a State mandated revaluation year to ensure fair property assessments. This process involves reviewing, valuation, methods, updating data and state oversight through the Board of Local Assessments. Evaluation year in Massachusetts is a comprehensive state mandated process that requires a full review and Update of all property assessments to ensure they reflect current fair market values conducted every 5 years. This process includes detailed analysis of sales, data, market trends, property characteristics and involve field inspections and data verification. It is overseen by the Department of Revenue (DOR) and must receive both preliminary and final certification before the new values are implemented. This differs from an interim year which occurs in the years between revaluations. Assessors still adjust property values and reflect market changes, but the process is less intensive and does not require a full certification. Interim adjustments rely more heavily on statistical updates and trending rather than the comprehensive reinspections and valuation audits required during the revaluation year. This leads into the contract and services line. The adjustments for FY26 assessors budget requests are primarily due to the revaluation. Specifically, the contract service line, the map program shared with multiple departments and our assessing software maintenance agreements have each seen an increase of less than $700, while our budgeted amount for the DOR mandated personal property appraisals and condo analysis have each decreased by $1,000. Additionally, our legal service line has increased by $4,500 to support ongoing personal property utility litigation, however, the most significant change is due to the reevaluation. Our assessing software vendor patriot properties, which is now called catalyst, will be required to produce more in-depth reports, summaries, and be available to respond to the BLA representative inquiries, while the assessing staff is out on the field, continuing the inspections of all the parcels in the city for reference, the cost for the assistance. Last time we had a revaluation was $52,500 overall contract services line increase is $39,099. The rest of the assessor's budget request is as follows. for the rest of our expenditure, printing and binding and office supplies, lines have stayed the same. In-state travel to meetings went up $50, and the change to the salary line reflects the COLA and Union contract agreements. Cohen – On the exemptions and work off programs, do you think people are taking advantage of them or do you think we should be promoting them more? Cortes – We are promoting the exemptions in our tax bills and on our website. The number of people that request exemptions changes each year. There could be older residents that move into assisted living or nursing homes and if the property taxes didn’t increase significantly, then less people are incentivized to file for an exemption. We are always available for questions so people can call the office or visit our website. And the work off program is for a specific number of people that can apply, and it is being used. Cohen – Also, I have heard that some solar companies are telling residents that they can get a tax exemption if they have solar panels, which is not correct, right? Cortes – We don’t tax solar panels on residential properties. Our assessments are based on the market and solar panels in Massachusetts are exempt unless you have a solar field or if it’s leased on city owned property. Morsillo – I appreciate that you get the word out about tax abatements and that you held the workshop last year and I hope that you hold one every year. People need a constant reminder. Davis – Motion to recommend approval of the Assessor Budget Personnel line item of $405,412, for expenditures $110,594, with the department total of $516,006. Seconded by Harvey. Motion carries 3-0. Merkl – Next, we will have David Greenbaum present the Health Department budget in section 16, page 434. Greenbaum - the Health Department is made up of several divisions. We have the environmental health division. We have our principal clerk division, our public health nursing division, our health and wellness coordinator. We have some grants that include our Tobacco Control Department and our regional public health excellence. We've been able to employ about 12 additional members in our staff due to the grants. They oversee and work for 8 communities on the North Shore, so that grant fully funds and takes care of salaries and benefits for those staff members. Our department has done a lot of work over the last year. The only change in staffing has been that the public health nurse took a job at the schools, and we're looking to hire a new public health nurse. Our financial side of the budget has basically stayed the same. We didn't inquire or ask for any increases. We've seen an increase in the work around certificates of fitness with the hire of the Code Enforcement officer in 2024. He's done a ton of work. He's increased the participation by probably about a 100-150%. We look to move that forward, going along into FY26 as well. Everything is level funded other than the AFSCME contracts and the COLAs that the mayor provided. There is an increase to Mack Park because the contract went up a thousand dollars. Morsillo – Can you talk a little about the opioid funds settlement and have we used any of them? Is there a plan for them and a timeline? Greenbaum - We just went through a big project we worked with MACP to reach out to the community about how they felt we should spend those funds. We are looking at those recommendations from that report and we intend to report out to the community. It will probably be in September and at a Board of Health meeting. We did spend some of that money on the Narcan boxes that are around the downtown area, and those were placed at the discretion of the police department. We used the information from them where they thought they could best be deployed. Davis - Motion to recommend approval of the Health Department budget personnel line item of $653,614, expenditures $127,139 per department total of $780,753. Seconded by Harvey. Motion carries 3-0. Merkl - Next, we have the Collector's office, and Anna Freedman will be covering that. This is section 4, and the budget summary is on page 295. Freedman - The collector's office is the portal for all revenues billed and received by the City of Salem. They collect all bills for real estate and personal property taxes, motor vehicle excise taxes, etc., and other receivables. Over the past year they have worked closely with the Transportation Department and the rollout of the new passport platform for the residential parking and members of the staff attended classes set up for the interpretation and translation. They also attended the customer service training that was put on by the city clerk's office, and I know that they're making plans with the clerk's office to continue those efforts going forward. I think there's another training set up in January and they've also been dealing with some upgrades with our centralized software system that have caused some changes in processes. They've had to pivot a lot this year and be flexible with implementing and making sure that they troubleshoot any adjustments for those. They are working with the Building Department and Health Department to launch the program for ticketing. In terms of their budget, there are no major changes anticipated by the collector's office. Most of the employees in the collector's office are AFSCME employees in the Union. The increase in full-time salaries is due to the contract settlement and non-union cost of living adjustments. The new longevity line is also due to the Union contract settlement, and then the rest of the budget remains level funded. Davis - Motion to recommend approval of the collector's personnel budget of $298,597. The expenditures in the amount of $8,300 for a department total of $306,897. Seconded by Harvey. Motion carries 3-0. Merkl - Next, we are moving on to the purchasing department with Anthony Delaney and we will start with general administration. Section 6, and the budget summary will be on page 307. Delaney - So the purchasing department handles all requisitions and purchase orders for both the city and the schools, as well as all real property transactions, surplus property disposal. We manage the city's vendor records, including issuing 1,099s to independent contractors every year. We are part of the finance department. We assist with vendor payment issues, insurance issues, including the vehicle list and general Munis support for a lot of city functions. We have a level funded budget other than personnel. We have one full time assistant purchasing officer and a part time purchasing assistant, all nonunion. So that reflects the non-union compensation study that happened this year and COLA. Davis - Motion to recommend approval of the purchasing department general administration personnel budget for $202,378, the expenditures in the amount of $23,725 for a purchasing department total of $226,103. Seconded by Harvey. Motion carries 3-0. Merkl – Next, we have the fixed costs for purchasing in section 6, page 310. Delaney – This is for the photocopiers and multifunction devices that we manage in City Hall and the Annex and there are no changes. Davis - Motion to recommend approval of fixed costs and expenditures line item of $39,181 for department total of $39,181. Seconded by Harvey. Motion carries 3-0. Merkl – Next, we will go over the Treasurer Department budget. This is in tab 7 and we are starting with general admin on page 315. Lindberg – We have 4 staff in the treasurer’s office, and we have been fully staffed for almost a year. An overview of the primary function of the treasurer's office. It's basically to preserve, protect, and manage the financial resources of the city. The treasurer is responsible for the receipt, deposit, and disbursement of city funds and the accurate accounting and investment of those funds all while following MGL, city charter and local ordinances. The treasurer's office also oversees the payroll distribution for all city and school employees and the preparation and submission of all quarterly employment forms to the State and the Federal Government. Since I mentioned payroll. I would just like to take this opportunity to tell everybody what a challenging year it was in the treasurer's office, as well as HR. We settled many contracts, including library, fire, police, superior police patrol, AFSCME. All of these contractual settlements created so much work for everybody involved. In addition to the contractual settlements, we also had MassHire pay increases, city non-union COLA increases and merit increases. It has been a busy year for payroll. Davis - Motion to recommend approval of the Treasurer Department budget with personnel item line item of $314,752 and expenditures, $132,125 for a department total of $446,877. Seconded by Harvey. Motion carries 3-0. Merkl – Next, we move on to long term dept service on page 318 - 320. Freedman - The debt service is the payments that the city is making to pay back for projects where we borrowed funds to afford projects. A new thing that we're doing going forward is we're separating out debt associated with underlying city projects and debt associated with school projects. We parse those out so it would be more transparent which debt was associated with school projects, and which debt was associated with other city general fund projects. Otherwise, this is consistent with the repayment schedule that we have from our financial advisors. Davis - Motion to recommend for approval long-term debt, service expenditure line item of $8,513,363 for department total of $8,513,363. Seconded by Harvey. Motion carries 3-0. Merkl – Next is short term debt service on page 323. Lindberg - The 2 things I wanted to point out with the lease payments and the interest on the leases. Those are for police department motorcycle leases that we have completely taken out of the treasurer's budget and moved over to the police budget. It just makes more sense there. Freedman - The other items is the interest that we pay on the short-term notes. The adjustments are resulting in a lower than otherwise planned for borrowing, because the Council recently approved repurposing some bond proceeds, so that allowed for some budget savings for next year, because our interest payment will be lower, since we do not have to borrow as much this spring that reflects a recent action by council to repurpose those bond proceeds. Davis - Motion to recommend approval of the short-term debt service with an expenditure line item $184,020 for department total of $184,020. Seconded by Harvey. Motion carries 3-0. Merkl – We move on to page 325 with the Essex Tech assessment and educational assessment. Lindberg – The number has increased slightly because the enrollments have increase. We currently have 169 students attending Essex Tech. Morsillo – If we didn’t have any students enrolled at Essex Tech, would there still be an assessment? Freedman – That is a good question, but I am not sure the answer because there are other components to the assessment aside from the enrollment so I will have to get back to you on that. Davis - Motion to recommend approval of the Essex Tech and Vocational assessment expenditures line item of $2,584,460 for Department total of $2,584,460. Seconded by Harvey. Motion carries 3-0. Merkl – Moving on to the Cherry Sheet State Assessment on page 327. Lindberg - The cherry sheet assessments did increase by a little less than 7% overall. They are mostly offset by the increase in the revenue portion of what we will receive from the State. Freedman – And one note that the numbers reflected in the budget are the numbers that were in the House budget. The Senate's numbers were slightly different. They often end up slightly different. Wherever the State ultimately lands on them in their budget, we're obligated to pay them, even if they are different from what is voted in the budget because we are obligated legally to pay them. We don't expect them to vary significantly, but sometimes they can vary a bit from each version. Charter School calculation is usually the biggest one that changes. Morsillo – What is the RMV nonrenewal surcharge? Lindberg – That is a fee that the RMV charges when there is an excise fee that was not paid and RMV puts a nonrenewal on the vehicle. That fee gets added to the excise tax, so it is paid back to us once the excise tax is paid. Davis - Motion to recommend approval of the State Assessments Cherry Sheet expenditure line item of $11,630,030 department total of $11,630,030. Seconded by Harvey. Motion carries 3-0. Merkl – Moving on to the Contributory Retirement Funds. Lindberg - The city's portion of retirement here increased by 5%, which is consistent with the funding schedule. About $200,000 to $250,000 is collected back from grants. Davis – Motion to recommend approval of the Contributory Retirement Funds personnel line item of $16,600,787 for a department total of $16,600,787. Seconded by Harvey. Motion carries 3-0. Merkl – Next is the Non-Contributory Pensions. Lindberg – We still have one member who collects the non-contributory pension and there has been no change in that amount. Davis – Motion to recommend approval of the Non-Contributory Pensions personnel line item of $10,625 for a department total of $10,625. Seconded by Harvey. Motion carries 3-0. Merkl – Moving on to Medicare. Lindberg – This is based on the number of employees last year and it is adjusted for inflation and contract settlements, so it is up about 6%. Davis – Motion to recommend approval of the Medicare Budget personnel line item of $1,553,460 for a department total of $1,553,460. Seconded by Harvey. Motion carries 3-0. Merkl – Next, we have the municipal insurance on page 335. Freedman - The increase here should be considered in context of a decrease that was seen on our workers compensation line. And so, we did a holistic deep dive on all our municipal insurance lines this year. The workers compensation, which is in the human resources budget, and the treasurer's office includes our other general liability lines, automobile, public officials, public safety, and we reset those to ensure that the premiums were more appropriately matching the actuals. The school does contribute their portion to both of those lines. We recalculated the school's component of that. This netted against the decrease in the HR workers compensation budget for all our premiums. Davis – Motion to recommend approval of the municipal insurance expenditures item of $438,461 for a department total of $438,461. Seconded by Harvey. Motion carries 3-0. Merkl – Moving on the Section 28, for the Sewer Enterprise Funds starting on page 601. Lindberg - This is our assessment for treatment and disposal of the city's wastewater. It went up 7.8%. There's 5 communities total who get assessed. Salem's share this year is just over 5 million dollars. Davis – Motion to recommend approval of the Sewer Enterprise Funds expenditures item of $5,010,255 for a department total of $5,010,255. Seconded by Harvey. Motion carries 3-0. Merkl – Moving on to the next page is the Sewer Enterprise Long Term Debt. Lindberg - Long term debt increased slightly, as did interest for the sewer projects. It's just consistent with the debt schedule. Total increased 2.79%. Davis – Motion to recommend approval of the Sewer Enterprise Long Term Debt expenditures item of $1,800,776 for a department total of $1,800,776. Seconded by Harvey. Motion carries 3-0. Merkl – Next, we have the Sewer Enterprise Short Term Debt on page 606. Lindberg – There is no change this year. Davis – Motion to recommend approval of the Sewer Enterprise Short Term Debt expenditures item of $55,256 for a department total of $55,256. Seconded by Harvey. Motion carries 3-0. Merkl – We move onto page 608 for the Sewer Enterprise Insurance Deduction. Lindberg – The insurance deductible remains the same this year at $10,000. Davis – Motion to recommend approval of the Sewer Enterprise Deduction expenditures line item $10,000 for a department total of $10,000. Seconded by Harvey. Motion carries 3-0. Merkl – We are moving onto the Water Enterprise Long Term Dept in Section 29, page 623. Freedman – This reflects a decrease of about 15% due to some dept rolling off our dept schedule. Davis – Motion to recommend approval of the Water Enterprise Long Term Debt expenditures item of $2,034,759 for a department total of $2,034,759. Seconded by Harvey. Motion carries 3-0. Merkl – Moving on to page 626 with our Water Enterprise Short Term Dept. Lindberg – There is no change, so we kept it level funded this year. Davis – Motion to recommend approval of the Water Enterprise Short Term Debt expenditures item of $79,415 for a department total of $79,415. Seconded by Harvey. Motion carries 3-0. Merkl – Next, we have the Water Enterprise SBWSB Assessment on page 628. Lindberg – The assessment increased by about $10,000. Davis – Motion to recommend approval of the Water Enterprise SBWSB Assessment expenditures item of $3,157,597 for a department total of $3,157,597. Seconded by Harvey. Motion carries 3-0. Merkl – Next, we have the Water Enterprise Insurance Deductibles on page 629. Lindberg – No change from last year.