Preparation of the City of Cambridge Annual Budget is governed by Massachusetts General Law, Chapter 44. The Fiscal Year 2014 (FY14) budget cycle commenced in December, 2012. At that time Budget staff met with the City Manager and Finance Director to update the City's 5-year financial projections and establish general budgetary guidelines and limitations for the upcoming year. On December 5, 2012 the City Manager convened the annual budget meeting attended by all department heads and finance personnel. At this meeting the City Manager gave a general overview of the state of the economy, discussed the budget format and outlined specific guidelines for the preparation of departmental budgets.
The following guidelines for budget preparation were issued: Cost of Living Adjustments (COLA), pensions and health insurance increase as required; the citywide goal is to submit a budget that supports City Council priorities without increasing the number of city employees; all non-personnel operating items known to be increasing due to contractual terms, must be absorbed within the budget and not knowingly under-budgeted; budgets are to be level funded with no increases in other ordinary maintenance or travel accounts; major contracts for services must be reviewed to ensure that departments have sufficient funds to meet contractual needs; and extraordinary expenditures must be revised and one-time items from the current fiscal year eliminated.
Departments should expect that reductions can be made during the review process, either at the administrative or City Council levels. Requests for new or expanded services should be submitted separately, outside the base budget, through a supplemental request memorandum.
The Budget and City Manager's staff subsequently met with each department head to review the budget format and assist with the development and refinement of goals and performance measures. The current budget format contains narratives, goals and performance measures for each city department enabling the City Manager, City Council, and citizens to better understand city services. Goals are and performance measures quantifiable and concise with calculations of services selected unit costs where applicable. During the budget process goals measures may be and eliminated, changed, or expanded as necessary making them more comprehensive, significant or illustrative of the services and programs provided by city departments.
By January 11, 2013 operating budgets, expenditure and revenue estimates, significant departmental accomplishments, and projections for the current fiscal year were submitted to the City Manager. From late-January to late March, each department made a presentation to the City Manager justifying proposed budget increases, decreases and program changes. The City Manager also reviewed goals and performance measures. Specific requests were negotiated during these sessions and appropriate revisions were made to the submitted budgets. It is important to note that at this stage of the process, the City Manager may increase or decrease budgets based on the priorities of the city council and the administration.
During March and early April, Budget and City Manager staff finalized the annual budget document for submission to the city council. State law mandates Budget submission to the City Council within 170 days of the council convening in early January. The City Manager submitted the FY14 budget to the city council on April 22, 2013. From April 30 – May 16, 2013 the city council held a series of public hearings to solicit citizen participation regarding departmental budget requests. The council has the jurisdiction to make reductions, but cannot increase the proposed budget without the consent of the City Manager. Following submission of the Budget, the city council has 45 days in which to act (June 6). The adoption date for the FY14 budget was May 20, 2013. The FY14 Annual Budget for the City of Cambridge becomes effective July 1, 2013.
The major financial rating agencies in the country (Moody's, Standard and Poor's and Fitch Ratings) have concluded that the city's finances are in the top tier of communities throughout the United States. This AAA rating from all three agencies is a significant accomplishment for the City and it reflects a great deal of hard work and discipline on the part of the Administration, the City Council and the Finance Department. In their latest rating, Standard and Poor’s affirmed its Financial management Assessment (FMA) of the City of “strong.” An FMA of “strong” indicates that practices are strong, well embedded and likely sustainable.
The fiscal year runs from July 1, 2013 - June 30, 2014.
The total City Budget for FY14: $507,186,335