Budget

FY 2025 Budget

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Budget Process

State law mandates the City pass a balanced budget each year, meaning expenditures (appropriations) cannot exceed operating revenue (estimated revenue). The largest portion of the City's expenditures in each year's budget goes to paying for salaries and employee benefits, but the budget also includes significant spending on schools, maintaining municipal assets like buildings and parks, and programs to support residents  

The City of Somerville's budget process typically kicks off in February and ends with final approval of the city's spending plan with a City Council vote in June. The City's fiscal year begins on July 1 each year.  

The City of Somerville's Mayor, as the City's chief executive officer, starts the budget process by submitting a preliminary budget to City Council in February. Throughout late winter and spring, there are deadlines for departments to submit projected expenditures and revenue, as well as requests for additional funding. City Councilors also have an opportunity to submit budget priorities to the Mayor. 

In late spring, City Council reviews fiscal trends that may impact the budget. The finance committee also holds a series of meetings to review and make recommendations on the budget.

Best Practices

Officials follow the City of Somerville's Financial Policies throughout the budget process, which is aimed at protecting the City's financial strength and stability and emphasizing the following best practices: 

• Cash Solvency: Ensuring the City pays its bills on time.  
• Budgetary Solvency: Passing a balanced budget each year.  
• Long-Term Solvency: Projecting and ensuring the ability to pay future costs. 
• Service Level Solvency: Making sure the City can pay for needed and desired services. 
• Public Confidence: Fostering public trust and support for decisions that promote financial stability. 

Budget Timeline & Hearing Schedule

Between the start of the budget process until final approval by the City Council, there are several key steps along the way:  

• February: Mayor requests Priorities from City departments. 
• March: Level-service budgets developed (budgets with no new additions that adjust for inflation or changing costs only). 
• March: City Council submits priorities to the Mayor. 
• April: Departments meet with the Mayor’s staff to review budgets and any proposed changes. 
• May: Budget finalized and presentation materials created and posted online. 
• May: Budget submitted to City Council. Finance Committee meetings to review the budget.
• May: City Council holds a public hearing on the overall City budget.
• Mid- to late June: City Council holds departmental budget hearings and votes on the budget.

FY 25 Budget Hearing Schedule

Funds

The City of Somerville operates its budget from four major funds: the General Fund, Enterprise Funds, Special Revenue Funds, and Stabilization Funds. Think of these as the City's bank accounts, with the City Council appropriating from the General and Enterprise Funds. 

The General Fund functions as the City's checking account. It is used to pay for most City operations. Revenue comes from a ranges of sources including real estate and personal property taxes, excise taxes, investment income, fines and forfeitures, fees and charges, as well as state and federal aid. The General Fund covers expenditures for most City departments, including the Somerville Public Schools. 

Enterprise Funds are the four funds for the City of Somerville's departments that charge for their services through businesslike activity. When you pay your sewer bill, for example, the revenue goes to the Sewer Division's Enterprise Fund.  

Those four funds support:  

1. The Sewer Division of Public Works 
2. The Water Division of Public Works 
3. The Dilboy Athletic Complex 
4. The Ginny Smithers Pool at the Kennedy School 

In addition to covering day-to-day operations, these four funds pay for the maintenance of the facilities and infrastructure they cover such as the stadium and pool or our water and sewer system. The accounting used in the budgeting of Enterprise Funds allows these departments to fund their services with the income they bring in rather than with taxes or other revenue sources.  

Special Revenue Funds include all money that, by law, needs to be spent on specific purposes. For a variety of reasons, including differing fiscal years, these funds need to be kept separate from the General Fund. 

• Special Revenue Funds include Revolving Funds, which allow the City to raise money for a specific service. Revolving Funds are created by statute or by law and need to be renewed by City Council each year. Currently, the City of Somerville's Revolving Funds collect revenue from the sale of City property, school grants, state and federal grants, cable franchise fees, and donations, among others. 

The City of Somerville has numerous Stabilization Funds, including the Capital Stabilization Fund, which pays for capital projects such as new school buildings, park renovations, or road and mobility improvements. Another is the Rainy Day Stabilization Fund, which safeguards the City in the case of a fiscal emergency, just like a household might set aside some savings in case of a job loss or medical emergency. Other stabilization funds are reserved for specific purposes. 

For a more detailed explanation and a complete list of City of Somerville Funds, visit ClearGov. 

Participatory Budgeting

Somerville completed its first-ever Participatory Budgeting process in FY24, where residents were able to propose ideas for what to invest $1,000,000 in to improve Somerville. Residents age 12 and older voted on ideas, and the City is putting the winning ideas into action. Learn more at somervillema.gov/PB.

Budget Documents

• Mayor's Message Regarding the FY2025 Budget
• FY 2025 Proposed Budget Book 
• Video: Mayor Katjana Ballantyne's Budget Presentation to City Council – May 30, 2024 
  • Presentation Slides 
• Video: Somerville Public Schools' Budget Presentation to City Council
• Video: Budget 101 Listening Session/Workshop - March 28, 2023 
  
   

For additional budget documents, please visit ClearGov.