Spending

Some significant budgetary hurdles for 2027 included:

• A 7.35% increase in the city's health insurance, totaling an additional $1.57 million
• An 8.8% increase in the Whittier Tech. assessment, amounting to $764,891
• A 6.8% increase in state assessments, constrained by only a 0.8% increase in general government aid
• The city's Chapter 70 school funding from the state increased by only 2.34%, while a 7.1% increase had been expected, resulting in a $4.5 million shortfall.

Collectively, city departments submitted budget requests totaling a 4.4% increase, or $12.2 million, over fiscal 2026. These requests surpassed the Mayor's target budget by $5.8 million.

During initial budget discussions, the Mayor and Department Heads reached an agreement to reduce the budget by $1.35 million, which included:

• $647,000 from the Fire Department
• $100,000 from legal services
• $200,000 from Highway
• $24,000 in overtime
• $379,000 across all other city departments.

Despite these adjustments, the city remained significantly far from achieving a balanced budget. We undertook a comprehensive reassessment of revenues using actual figures up to March and meticulously analyzed departmental budgets line by line to identify potential savings. Ultimately, we recommend the following budget adjustments:

• Fund vacant positions at 50%, reducing the budget by $275,000 (approximately 5.5 FTEs)
• Cut Police overtime, repairs and maintenance, and computer supplies by $507,142
• Reduce Fire overtime, supplies, and repairs and maintenance by $206,050
• Decrease Highway equipment, overtime, and capital expenses by $254,467
• Reduce General Government repairs and maintenance, office supplies, consulting, and training by $24,200
• Reduce Human Services veterans payments, building maintenance, and office supplies by $44,300
• Lower group insurance for anticipated vacancies and attrition by $509,859
• Reduce salary and budget reserve by $890,000 (previously used to fund collective bargaining settlements and snow removal deficits)
• Reduce debt service by $90,479 due to bond issue with lower than estimated interest cost
• Increase motor vehicle excise revenue by $548,000 based on actual receipts through March 2026

Major Budget Driver - Group Health Insurance

During the budget process, the Mayor, Human Resources Director, and the CFO met with the city's independent insurance advisor to discuss the city's group insurance plan, anticipated rate increases, and alternative options for managing health care costs. We learned that because the city has a poor loss ratio, meaning the GIC - Group Insurance Commission, has paid out more in claims in the recent reporting period than it has received in premiums, it is likely the city would not receive proposals from alternative health care carriers as it has not received proposals in the recent past. We were also informed that if the city were to withdraw from the GIC, it must wait three years to re-apply to the Commission, and upon reapplication the GIC is not required to accept the city's request for re-entry. However, if the city remains with the GIC, the GIC must renew the city's policy each year.

The GIC is a Massachusetts state agency that provides high-value health insurance and other benefits (like dental, vision, life, and disability insurance) to state employees, retirees, their families, and eligible municipal workers. The GIC is the biggest employer purchaser of health insurance in the state, and it uses this leverage to drive quality and affordability in the market. In addition to covering state employees, the GIC presently covers 11 cities, 27 towns, and 16 school districts. No municipal units left the GIC in fiscal 2026 and 11 new municipal units have joined for 2027.