City Council - Ways & Means Committee Hearing on Dockets #0733-0740, FY27 Budget: Capital Budget Overview, Assessing, Auditing, Treasury

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Good morning. For the record, my name is Ben Weber. I'm the District 6 City Councilor and the Chair of the Committee on Ways and Means. Today is May 26, 2026, and the exact time is 10.09 a.m. This hearing is being recorded. It's also being live streamed at boston.gov slash city dash council dash tv and broadcast on Xfinity Channel 8, RCN Channel 82, and Fios Channel 964. The Council's budget review process encompasses a series of public hearings beginning in April and running through June. We strongly encourage residents to engage in this process by giving testimony for the record. You can do so in several ways. First, you can give testimony in person or virtually at any of our hearings. For a full hearing schedule, you can look at our website. Boston.gov slash council dash budget.

And to testify in person, come to the chamber, sign in on the sign-in sheet near the entrance, and you'll be called on in the order you've signed up. To testify virtually, you can sign up using our online form on our Council Budget Review website or by emailing the committee at ccc.wm.boston.gov. or by emailing krishmachan at k-a-r-i-s-h-m-a dot c-h-o-u-h-a-n at boston.gov and you'll be given a Zoom link to testify. In addition, this evening at 6 o'clock right here in the chamber, we will have our fourth of four public listening sessions. You can testify in person or virtually at that. It's, again, 6 p.m. tonight. Right here in the chamber.

Again, when you're called on to testify, please state your name, where you live, if you're with an organization, your organization affiliation, and you'll be given two minutes to testify. in lieu of testifying in person or virtually at a hearing. You can also submit written testimony by emailing the committee at ccc.wm.boston.gov. Lastly, you can submit a two-minute video of your testimony through the form on our website. For more information on the Council's budget process and how to testify, please visit the City Council's budget website at boston.gov slash council dash budget. Again, people will be given two minutes each to give a public testimony. We will take public testimony after we'll hear from the panel, then hear from my council colleagues. A few minutes to ask questions and then we'll have our public testimony after that before a second round of questions.

Again, if you're looking to testify virtually, please reach out to our Director of Legislative Budget Analysis, Karishma Chauhan at karishma.chauhan.org. at Boston.gov for the Zoom link and your name will be added to the list. This morning's hearing is on docket number 0733 to 0740. an overview of the fiscal year 2027 operating budgets for the assessing, auditing, and treasury departments. This hearing will also be regarding the fiscal year 2027 capital budget and the fiscal year 2027 to 2031 capital plan. This is one in a series of hearings to review the FY27 budget. This is our last departmental budget hearing of the year. and many more. Flynn. These matters were sponsored by Mayor Michelle Wu and referred to the committee on April 8th, 2026.

Today I'm joined by my colleagues in order of arrival, Councilor Flynn, and I'm joined by a panel which I'll introduce and then hand things over to you. Let's see if we got this right. We have the Commissioner of Assessing, Nicholas Aranello. We've got the first assistant collector treasurer for the Treasury Division, Jerica Bradley. Okay, great. We've got the second assistant collector treasurer for the collecting division, John Hernandez. And we've got Scott Finn, the city auditor. And we've got Ian Donnelly. What's your title again, Ian?

O'Neill. Deputy Budget Director and Director of Capital Planning.

Okay, Deputy Budget Director and Director of Capital Planning. Thank you very much. So we waive opening statements. I think we have some slides and a presentation, so I'll hand Floor over to the panel, and then we'll get to questions from my colleagues.

Thanks. Our presentation this morning will start off with the Auditing Department. I'm Scott Finn, City Auditor. So just quickly to go over what the auditing department does. The mission of the auditing department is to present the complete and accurate statement of the city's financial condition. We achieve these through many of different and many other tasks. Some to be highlighted is preparing the city's annual financial statement. Reviewing and processing all financial transactions for accuracy and compliance and implementing fiscal controls over departmental spending. We also approve procurement documents We process vendor payments on a timely basis. We process payroll for all employees and ensure compliance with local, state, and federal laws as well as collective bargaining agreements.

We provide overall technical assistance to financial staff throughout the city. and we prepare the city's annual single audit to ensure our special revenue funds are appropriately managed in the city's financial system and assist in any federal, state or local reporting requirements. Our next slide is just our org chart overview of the department. We basically split down into five different teams within the auditing department. We have an administration team, we have an accounting and financial reporting team, central payroll, accounts payable, and grants and special revenue. Just some highlights to share. I have highlights from fiscal year 25 because that's a full complete fiscal year and then some year-to-date numbers for 2026 and 2025, fiscal year 2025.

The department processed approximately 146,000 vouchers on behalf of over 11,000 vendors for the city. We reviewed and approved over 2,200 contracts. Process payroll for approximately 29,800 eligible employees, totaling $2.46 billion. We processed nine retroactive pay adjustments. For over 21 employees, 2100 employees, I'm sorry, we published the city's annual comprehensive financial report in single audit. In accordance with uniform guidance, the 2024 single audit included 12 federal programs, which is extremely high in a normal year. And we provided technical assistance throughout the city's finance staff. Yetta date numbers in 2026 were pretty much on the same path. I'm not going to read all of them, but approximately the same number of vouchers and contracts.

We had four retroactive pay adjustments so far this year. And again, we published the city's annual comprehensive financial report as well as the single audit for fiscal year 25, which included eight federal programs.

So, on to assessing. Good morning, Councillors. For the record, my name is Nick Aranello, Commissioner of Assessing for the City of Ballston. And I'm going to give you a very quick overview of what assessing does. So our primary responsibility is the annual evaluation of real estate and personal property located within the city of Boston. To that regard, we have over 190,000 real estate and personal property accounts with a combined value exceeding $295 billion. Fiscal year 26, property taxes generated over $3.5 billion in revenue for the city. The department is responsible for high-level constituent services, providing assistance and information to taxpayers about their value and also about the different various exemption programs. For example, we have the residential exemption. Over 75,000 properties received that exemption in fiscal year 26.

In addition, the department is also responsible for a number of other items such as motor vehicle excise, administering tax agreements, and administering the pilot program. In terms of structure, we remain above an executive division, evaluation division, operations division. Executive division is... Commissioner, legal, some administrative support, valuation division has separate sections that deal with commercial values, residential values, condominiums, personal property. We have a research department. We have... Clerical Data Entry as well. Operations is in charge of budget and procurement as well as our human resources team. We have IT departments specifically within assessing as well as information systems staff. We have a land records division, taxpayer data administration, and then we have our taxpayer referral and assistance center.

So those are how we get our things done. Now we're going to move on to treasury.

Thank you. My name is Johnny Hernandez, second assistant collector treasurer. The treasury is divided into five different sections. We have a taxpayer relations section that handles the current day-to-day situation with taxpayers. We have accounting and quality control that handles overpayments, adjustments, and day-to-day situations that has to be corrected. We have a tax system specialist who handles the online payments that comes in. We have a task payment service manager who handles the current payments in person and processes payments throughout the different departments. and that we have an MOC session that handles legal documents that is required when purchasing or refunding certain properties. Our mission statement, collect property taxes and all other revenue owed to the city while providing professional Courteous and responsive service to taxpayers.

We maintain the highest collection rate possible and actively pursue all collection remedies allowed under statute. For fiscal 23, we was at 99.2. Fiscal Year 24, we were also at 99.2, and Fiscal Year 25, we were at 99.1. General management, what we do, we're responsible for hiring, training, and supervising collection division staff and maintain Our collection system, we continue to enhance, we continue, I'm sorry. Continue to enhance collection features such as pay by phone, online payment portal, partial payments online, and QR codes on tax bills to ensure the most effective taxpayer's experience.

Our special collections, what we do, we are responsible to collect pass-through taxes, personal property tax, and motor vehicle tax. We work along with other departments such as the law department. We work on special projects, account research, and petitions. We collaborate with city departments, including the mayor's office, House, Home Center, Ace Strong to ensure taxpayers are informed about all available city resources. assisting drafting courteous letters and emails and making phone calls to taxpayer utilizing resource tools and resource to provide accurate information and support regarding property tax bills. Work on special projects for fiscal year 25 to reduce the tax taken by 700 counts and prepare and file tax taken as necessary.

For our Payment Services team, we issue all current tax notices to taxpayers and financial institutions, process all payments received from taxpayers ensuring accurate recording and proper allocation of funds, receive and process all city department deposits such as parking, permits, public works, and licensing fees, process special assessments, reconcile daily collection for deposit by the treasurer. And for accounting and quality control, what we do is maintain the financial records of collecting division and manage the database used to monitor and control division activities. Collect and disperse assessment on behalf of the business improvement district. Identify, investigate, and conduct outreach and process overpayments, refunds, and misapplied payments.

Reconcile our collection in accordance with the city orders to ensure financial accuracy and compliance. For data processing, what we do is that we ensure that We ensure the accurate recording of the city revenue including the verification, reconciliation, and timely posting and transaction to permit record in the city's primary financial database. We maintain, monitor, and update the electronic data system, including but not limited to the web-based services, online payment processing platform, leasing documents, Bake Lockbox Transaction, and other electronic and manual payment methods. We coordinate with internal departments and external financial institutions to resolve discrepancies, ensure data accuracy, and maintain audit-ready financial documentation. Updates and feature projects.

Implementing new data software to improve service outreach on delinquent accounts. Amount recovered for fiscal year 23 is 19.6 million. For Fiscal Year 2024, it's $25.5 million. For Fiscal Year 2025, it's $26.1 million. Our future project is to improve and modernize web service payment system and digital form and align with current technology trends. Ensure security and enhance the overall use experience. Integrate QR codes to all real estate and personal property tax bills to streamline payment access. Improve users convenience and enhance customers satisfaction. Thank you and I'll pass it along to

Good morning, Councillors. My name's Jerica Bradley. I'm the first Assistant Collector Treasurer over the Treasury Division. I'll give you an overview of our org chart. Treasury is one big suite, but we have two component parts of it. So Johnny's part of the collecting division. I'm on the other side of the floor, the Treasury Division. We have four main sections within Treasury. We have our finance section, which includes accounting and finance, where we do our debt and our interest. Management. Our operations, we have accounts receivable and general services, and then we have our trust and CPA divisions. What we do So primarily we manage money. It's the physical, the actual cash, the dollars and cents in the bank accounts, what comes in, and we also pay bills. We ensure that those go out. We manage fraud controls.

We make sure that all of our bank accounts are safely secure, the public's money. We monitor cash flow, and we do forecasting. We manage the city's debt and investments. As I mentioned, we also oversee the Trust and Community Preservation Office. To give you some statistics. To quantify some of the stuff that we do, we process over $100 million for payroll. I think Scott gave you an annual figure of $2.6 billion, so this is just on a monthly figure. We process over $60 million per month for retirees. We print advices over $50,000 per month for employees, vendors, and retirees. We pay over $200 million a month for vendors. We process over $30 million per month in state and federal taxes. We process over $20,000 W-2s.

Councilor. We transmit 1099s to the IRS and then we also process receivables for grants as well. And as I mentioned, we make sure that the city's accounts are protected against fraud. Thank you very much. I'd be happy to answer any questions.

Okay. Thank you very much. I've also been joined by Councillor Louijeune, Councillor Durkan, Councillor Breadon, Councillor Culpepper, Councillor Fitzgerald. We're going to do a first round of questions. I think we're going to have six minutes each. Then we'll take public testimony and come back for a second round. Any more rounds we need here? So six minutes. Councilor Flynn. Thank you, Mr.

Chair. Thank you to the administration team for being here. To the city auditor, let me start with you. The Wolfen Company audit report on the city's main street, that's a public document, isn't it?

Yes, it is a public document and can be provided through a public records request.

Are you able to share that with the city council?

Yes.

Is it possible for me to receive it today? Yes. Okay, thank you. John, I listened to you as well. and you work closely with the city auditor on investigations relating to fraud as well. Were you involved in working on anything relating to this audit of the Main Streets program? No, who would your team would have been involved in that?

So the collecting division, What they take in for revenue is not related to anything that is funded by any Main Street program.

Okay. Let me ask a general question. City departments, department heads, do they receive a credit card for work they do in their official capacity? Or if they don't, how would they Submit expense reports, if at all.

So if a city, like if an employee submitted an expense report, so typically we would see that as if an employee was traveling? And so the travel policy, we have a standard travel policy for all city employees, but typically employees will pay for the cost of the travel and get reimbursed afterwards through a We do have alternative processes to make sure that if you're unable to put that cost up front, we have other things in place, but none of those include giving them a city credit card. Are there any city employees that have a city credit card?

Yeah, there are a few instances where we have had to issue credit cards or debit cards for them and there are some May I receive a list of the city employees that

are issued a credit card or a debit card? Do you know right now which city employees do receive a credit card?

I can get you that.

I know, but do you know now who they are?

We have one for the mayor, one for myself. I'll have to look up the others.

Okay, so there's only two or three?

Yeah, I think there was another one or two that another person had held, but they had left. They're no longer employees, so they're very few.

Okay, the police and fire commissioner, they don't have one? No. Okay. How do they provide expense reports if they are traveling? Do they do it for their human resources or budgeting?

So they would go through their finance team and there's also a pre-approval process that goes For all city departments which gets approved by the department head, cabinet chief, and the Office of Budget Management prior to any travel occurring. Okay.

So this is open to anyone, but do you think we failed in terms of not seeing the declining office values despite growing evidence that commercial property revenue I've talked about this and wrote about this for four years. I saw this coming along with other people and it was kind of dismissed outright as if it wasn't accurate. Did we make a mistake in not seeing this take place?

In what sense, Councillor?

Highlighting that the value of buildings was significantly declining. In fact, office buildings were being sold at a fraction of what they were sold maybe 10 years ago. and we see that drop in value of commercial buildings. We also see the people not showing, people not working in downtown Boston, working remote had an impact on the value of commercial

I mean I would say that over the years we fully recognized and noticed there have been a number of economic changes in terms of the Final impact on property values. That's something that always continues to be in flux. So I guess my question is, are you talking about like forward looking or are you talking about the past? Like we recognize dropping values in our assessments.

Yeah, no, I highlighted this for years that the value of office buildings was declining and we need to readjust on how we make and make our payroll and meet our city's obligation to be fiscally disciplined, fiscally responsible, transparent and accountable. But let me rephrase or let me ask another related question. Property taxes on residents has gone up at least 10% over the last two years, 10% each year. Are we expecting that it will go up again at least 10% next year?

We don't have finalized values for next year. We haven't even started the process yet. We've been spending the past few months is the normal cycle in assessing working on abatements from fiscal year 26. and sending out information requests to gather data for fiscal year 27. But we're just at the beginning of that process, so we haven't gone through any sort of analysis and done any changes to our modeling yet for 27 to figure out what those values are going to be.

I think people know that their taxes never go down they only go up but I'm gonna continue fighting for taxpayers in the city for us to be more fiscally disciplined and transparent and ensuring that Boston's taxpayers are respected. Thank you, Mr. Chair.

Okay. Thank you, Councillor Louijeune. Six minutes, then Councillor Durkan and Councillor Breadon.

Thank you, Mr. Chair, and good morning, everyone. I hope everyone had a good long weekend. I have a question, a few questions. One first is about the capital budget. The city categorizes projects by neighborhood, citywide, and sometimes over multiple neighborhoods. How does the Office of Budget and Management evaluate and ensure that neighborhoods are receiving a fair level of investment when so much of the plan is listed as citywide or multiple neighborhoods? Is there an internal method? for allocating some share of those investments back to neighborhoods that actually benefit. I ask this question, you know, when you look at it just in an isolated year, there are some neighborhoods that seem that they don't have a significant amount of investments. Mattapan, Hyde Park, for example, my two neighborhoods. You know, there's the continuing ongoing fight for Alston Brighton, so a community center there wondering sort of how we think about it, what window of time are we looking at to make sure that neighborhoods

feel like they are treated fairly across the city when it comes to capital investment because we have heard from folks who don't feel like that is happening.

Yeah, it's a great question, Councilor. Thank you. So before I answer, I want to make an explanation distinction on what we mean when we say multiple neighborhoods and citywide, just to make sure that it's understood. multiple neighborhoods we use to classify an investment that is at a discrete location but that that location is in multiple places so for instance the the the I think RBT projects we've classified as- Excuse me? The Renew Boston Trust. We had previously called it Renew Boston Trust Phase 3C. It was the geothermal investment at the JFK. and then the HVAC project at the Otis School in East Boston. That project we classified as multiple neighborhoods because it's two very specific projects. They just happen to be in multiple neighborhoods.

Citywide, by contrast, we use that to talk about things like our annual repaving and street reconstruction project, something that is truly happening across the city. It is happening in every neighborhood and every district, sort of. over the years. A lot of our annual programs are classified in that way because they touch sort of every neighborhood, every resident. In terms of how we make the investment decisions, a lot of those, we look to our partner departments, our parks department, our streets cabinet, to give us the information as the subject matter experts over the owners of their assets. We look to the Parks Department to be the ones who have the best knowledge about The state of the playing courts in the city, the state of the parks in the city. We look to our streets cabinet to know the state of

Thank you.

I appreciate that. I can appreciate that. I just want to continue to uplift what we hear, especially in black and brown neighborhoods, especially where there are ongoing issues of equity that the capital budget can't help resolve. that I don't know if we're taking that seriously enough and that we need to really have that lens as well when we're looking at capital planning. And so, I mean, we're looking at this in my office. It'd be good to look at, like, what does a five-year review look like when we're looking back in terms of investments in neighborhoods? And should there be more intentionality around capital planning in certain neighborhoods that they feel and they know and they can see that there is a sort of investment from the city. I just wanted to move on to a few other questions. Nick, Commissioner, good to see you here. As you know, our office has been looking very closely at Clause 41D to provide additional and how it interplays with the I just wanted to know if Boston adopts or expands senior tax relief, what administrative capacity would you need?

Thank you. Thank you. The hearing on it pretty soon. So I just wanted to hear what, if any, additional needs your office would have in order to implement it clearly. And what data can you provide on current senior exemption uptake or denials? I think my office also sent you an email in preparation for the hearing on these questions, and so we'd love to sort of, if you have that information now, but would also like to make sure we get an answer.

Sure. Thank you so much for the question, Councillor. Good morning. In terms of the current elderly exemption program that we have, for fiscal year 26, that benefited around 1,300. Seniors that received either a 41C or a 17D. It's a slightly different exemption for our older constituents. In terms of your question around additional capacity regarding changing the criteria to expand, we should be able to Thank you. Thank you. Thank you. If it manages passing, then it would be something where we'd make an announcement. We want to make sure that people are aware of it.

But a lot of that we would do through changes through the kind of annual publications that we already Thank you.

And between the time that we've discussed this and now regarding Thank you. Thank you. Thank you.

That's also a great question. I think the administration has put forward a number of different proposals to try and expand these programs and expand the criteria. and those are things that are up the Statehouse that obviously That's different from the proposal that you mentioned, 41D, that we can do on our own through passage by the council and then approval with the mayor. Every benefit is a benefit, and every opportunity to expand the program is something that we should look to do. benefit of that expansion is relatively small. It might add up over time because there's year over year cost of living adjustments and it would compound. But in terms of like, The initial broadening of the program will probably not impact that many residents, but hopefully it will

provide some level of assistance.

Yeah. Thank you. Right now, the exemption is at $25,000, for example, because of the compounding effects of If we had 41D in place, Math Senior Action Council did the math and would be at 40,000 right now. And so I do think that over time, the compounding effects would be beneficial for our seniors. Thank you. Thank you, Mr. Chair.

Okay, thank you, Councillor Durkan. Six minutes.

Thank you so much, Chair. I know this has definitely been in the news, but I just wanted to ask a question specifically regarding under assessing. We have a lot of historic, beautiful, McFarland. I often hear from residents who are living in condo buildings You know, based on some GLOBE reporting and other that there is under assessing taking place on certain properties in our neighbor, especially in our historic neighborhoods. Obviously, some of the residents of my district would not like me asking this question. But I just want to ask the question of when I'm just going to use a fictional example. Say something's being assessed at $6 million, but then it sells the next day for $12 million.

How do we... How do we frequently update our valuations? And then I know I've asked this question in detail, but particularly in District 8, there are a lot of parking spaces that and many more. I'm curious how we get assessed for way less than nearby parking spaces that are sold. I'm curious how we factor Thank you so much for the question, Councillor.

I really appreciate it. My department cares very deeply about making sure that we are assessing everyone fairly and equitably. And that means that we are, it's also an obligation of the state. and it's something that the state checks every year to ensure that based on assessment to sale ratios we are valuing all properties at fair market value. and so that's a process that's not just for Boston but impacts every single municipality in the state and that's an approval process they have to go through. We spend an enormous amount of work Doing maintenance, updating data that we have whenever there are sales that occur. Assessing is a backwards looking process, and so a lot of times people will see a sale that happened Thank you for watching.

The most recent values that were issued, these values get updated once a year. And so the most recent values that were issued was information that became available in late December of 25. and that's looking at what that property was worth on January 1st, 2025.

And what factors into that assessment?

So what factors into that is the data that we have on the property. And so that's a potential source of error. If we don't have accurate data, then it's not going to produce an accurate value. And there is no obligation. For anyone to let assessors into their homes to update data and so we go out for the best information we have which might be old and then we update it also using permit information or when there are sales we go look at listing services to get information about the current attributes of the property and then update it that way We also do actually spend a lot of time going around throughout the neighborhoods asking people to let us in their homes so that we can have an opportunity.

Well, we've all done that in a different sense.

So that's something that we spend a lot of time and effort to do. The other thing that we do on occasion is we will look to outside tools. To verify that we are not only meeting the obligations of the state, but really doing the best job that we can possibly do in terms of assessing everyone fairly. For example, the Lincoln Land Institute has a number of publicly available statistical analysis tools. We've done that for a number of years. And in essence, we are doing extremely well in terms of making sure that everyone is assessed at 100% fair market value when you look at the time period that we are supposed to look at for valuation by state law and The data as of that point.

You mentioned a recent article, I think it was maybe an editorial that you were thinking of that was in the Boston Globe.

The data that that was using... Yeah, I'm like, big difference, article and editorial.

The data that was using the report that that editorial was based off of was comparing two different time periods. So when it was looking at the lower value properties, it was actually using sales that were during the correct time period. And then when it was looking at the higher value properties, it was looking at sales that were after the assessment date, so sales that we a bunch of which did not even occur at the time that the assessments were issued and then also cells that we would not be able to legally use even if we were aware of them when they occurred.

Got it.

And so it was kind of and many more.

Would you be able to loop back to my Obviously, we've got some famous, again, famous news article noteworthy, you know, the Burma Street Garage, for instance, you know, where parking spaces are going like upwards of 600K. That's obviously an outlier. I think a lot of the parking spaces in my district are being assessed for way less than the average Bostonian would think they were worth. and it seems like it's pretty standard across the district just in terms of so obviously like a parking space in the back bay might be worth more than a parking space in another neighborhood so how is that being factored into Those assessments.

Sure. So that is also something where we look at the sales that occur and we do modeling based off of those sales and we have different factors depending on neighborhoods, depending on location and parking spaces. Also, there can be differences in ownership that can impact value. So for example, Let's say you own two parking spaces and they're tandem, which means you can only get into one by driving through the second one. That's not worth as much as having two parking spaces that are side by side that each are independently accessible. So all that stuff factors into our valuation. You're right, there are definitely sales out there that are for extremely high amounts of money. In a lot of instances, You know, if you have 20 sales that are all for 50 grand and then you have one sale that's for 600 grand, you can't build the model based off the one sale that's for 600 grand.

And I just want to say that, and I know that my time is up, these are questions that my constituents ask because they do feel like when they look at their tax bill, and then they look next door at the mansion getting taxed at the same rate, they feel a certain way about that. And so I just want to acknowledge O'Reilly, while some of my questions aren't beneficial, I think it is important to get these answers onto the record. So thank you, Assessor, and thank you, Chair.

OK. Thank you. We've been joined by Councillor Pepén. Madam President, six minutes.

Good morning everyone and thank you all for being here. Today's hearing, my focus on today's hearing is about how projects move from planning into execution. and how residents track public commitments and how city ensures transparency and accountability across the capital system. Too often projects remain in planning, study or siting phases without a defined path into delivery. This is not about one administration or any one neighborhood. It is a broader oversight issue affecting communities across Boston, as already referenced by my colleague, Councillor Louie Jeanne. Projects such as the Jackson Man, the Roxbury Resilient Transportation Corridors, Southend Fire Station Modernization,

The East Boston Greenway extension all reflect broader public concerns around delays, deferred investment, stalled implementation and the absence of a clear public timeline for next steps. At the end of the day, residents judge government not by the plans or studies but by whether projects are actually delivered. So I just wanted to take a system level capital overview. and get some insight into what are the decision-making protocols? What determines when a project moves from planning into design? Who is responsible for moving projects between those phases? and how can residents tell whether a project is actively advanced or still in planning? And then how do we account for rising construction costs when projects are delayed?

And can we also get some insight into how the relationship between the five-year capital plan, bond authorizations, and bond attachments And if a project is in a five-year capital plan but not in the bond paperwork, is it actively moving forward or is it still in planning? That's a lot to unpack, but that's my first go at it. So I think that those are probably, Ian is probably I think most of the questions.

I was trying to write them down. You have removed a lot, so I might ask you to repeat some of them. To end with the ones that that's sort of fresh on my mind and the question that you asked near the end on the relationship between bond authorization and the loan order that's before you and things that are Thank you. Thank you. Thank you. and so we're allowed to carry the authorizations over multiple years so what the loan orders that we file with City Council for the Thank you. Thank you.

Right, that authorization then stays with us for a long period of time. So that's why several years ago we filed a loan order for the I'm trying to come up with a project, but say the construction for the Fields Corner Library. That actual construction authorization was approved, I think, several cycles ago. But it's that same authorization that we're using to issue bonds last week in order to actually finance the construction of that project. So we're able to carry that with us. So even though a loan order that we file with you may not include a listed project within it, A lot of the time that's because we already have sufficient authorization to be moving forward with whatever project you may be thinking of. So that's why we don't come back year after year asking for the same project.

This is also why, sort of incidentally, if you look at the published capital plan in the budget book, in volume four, you'll see there's a table called authorizations. A lot of the time, there's a and so on and so forth. Rather, sorry. It's not because we're not spending money on that project. It's because we already have sufficient capacity to be advancing the project in whatever stage it may be in. We typically come back when we want to move into that next phase. With that being said, I'll try to answer some of your other questions about how do things move into those other phases and stages. Right, one of the things that we look at every year when we're putting together the capital plan, we reassess what our projected revenue is going to be, because ultimately that underlies everything.

and when we're looking at that revenue, we're looking at how much debt do we think we're going to be able to issue over the next five, 10, 15, 20 years based on our current projections, based on our current level of debt, based on our operating budget growth assumptions. From that we look at what projects we have already under construction. or things that were sort of otherwise locked into, so to speak, various legal obligations, for example. And then we can look at what remaining authorization, what remaining capacity do we have to advance projects? And from there, it's the very tricky part of Thank you. Thank you. Public Facilities Department does a great job at baking in inflation adjustments into their projected construction costs.

But a lot of the time, they may be under During COVID, right now, I think with some of the oil price issues, we've been seeing costs come in higher than expected. Add that to delayed or reduced revenue expectations based on changing forecasts that can all sort of constrict A plan so that things that were projected to move into construction we now have to add a few years to the timeline just in order to make sure that we're maintaining fiscal responsibility I realize I used all of your time answering, so apologies.

That's fine. I asked many questions. I got many answers. I'll come back for more. Thank you.

Okay. We've been joined by Councillor Murphy, so I think I have Councillor Culpepper, then Councillor Fitzgerald, then Councillor Pepén, then Councillor Murphy. We'll finish our first round and get any public testimony, and then we'll have a second round. Culpepper.

Thank you Mr. Chair and thank you leadership team for coming to discuss assessing auditing in the Treasury. I want to pick up on Durkan's questions regarding assessments. And how are algorithms used in the assessing of the different properties? Well, algorithms are used, right?

So we use modeling. I'm not quite sure. Not quite sure where your question is going, just in terms of how algorithms... Well, let's start with that.

Go on, talk about the modeling. I think algorithms are used in the modeling, but talk about that. Sure.

So, we have... I'm trying to think of the most concise way to approach it. Also, good morning, Councilor. Good morning. Good morning. Forgot to say hi. No, it's OK.

It's OK.

It's OK. So we have there. over 180,000 real estate parcels. We're just talking real estate. And so there's all different kinds of property in there. So there's condominiums, which are primary class, which means the largest number of residential parcels that we have. Single family homes, two family homes, three family homes, small apartment buildings, big apartment buildings, different kinds of commercial space, office, retail, hotels, what have you.

We're just talking residential right now.

Okay, so for just residential, we have, we basically use mass appraisal software. So it's called CAMA, Computer Assisted Mass Appraisal Software. And we put into that system A bunch of inputs based on property attributes. So things like how many bedrooms there are, what the quality of the property is, where the location is. And then we also- What role does the location play? It impacts value. Everything impacts value. So these are all factors that impact value in various regards. The way that we kind of figure out how they impact value is that we also input into the modeling a bunch of sales values.

And basically what the model does is it takes the sales, it breaks them all down into little individual bits and pieces and says like, okay, In this area a bedroom is worth this much, a luxury kitchen is worth this much, an average kitchen is worth this much. Depending on where the location of the property is. Locations affected. Yeah, there's a lot of factors. I'm not trying to be dismissive. It's just it's hard to like have a concise conversation around it.

No, I know it's hard. I'm trying to get to how do we get to A house that sold for $21 million in November and on February 8th of 2026, it was assessed at $12.5 million. You see what I'm saying? Sure, when was the sales date?

November 2025. Okay, so for fiscal year 26, the sales date that we use by state law- No, no, no, 2025, right? Sure, but you talked about a February 26 assessed value, correct? Right. Okay. So that's fiscal year 26 assessed values. So to get at fiscal year 26 assessed values, we are looking at what the property would have been worth on January 1st, 2025. And so we get to that using sales data from calendar year 2024. So the sales So that February day,

of $12.5 million has no bearing on the actual assessment in February of 2026. Yes. It's for two different time periods. Right, right. So you said for the 21 million, we go back to January 2025. Yes, sir. But in February 2026, it was at 12.5 million. And the modeling that took place consisted of the size of the bedrooms, the location, all the things you just talked about.

To the extent that we know them. So a huge challenge in assessing is that our models are only as good as the data that we have. And since no one's obligated to let us into their property, it can sometimes involve a lot of guesswork. as to what exists within an individual's home.

So when you look at a property on Beacon Hill and then you look at a property in Rosendale and you're looking at the size of the rooms and the Different attributes that you talked about, you're going to get different assessment values based on the information that you put into the model.

Yes, so there's different values based on the attributes of the property, but also based on what things sell for in those different neighborhoods.

Right. Let's stick with the attributes for a minute. But the data that you're collecting and putting into the modeling for A Beacon Hill property is going to be very different from the data that you put into a house for a house in Roxbury based on the location and the different attributes of that home.

Yes, sir. The location impacts what things sell for in those different neighborhoods.

And then those sales prices... No, I'm not talking about selling. I'm talking about assessing.

Sure, but the assessments are made off of sales. Like they're created from sales. So part of what the model does is it takes sales that have occurred during the time period we're allowed to look at, and then it breaks those sales down into individual component values and then uses those little bits and pieces to build up values for everything that sold.

How much of that information are you getting from the listing services? That's it, I'll come back. How much of that? The property attribute data or sales values? That's one of the sources that we look at. And so if a listing service has inaccurate data on that home and you're using the data from the listing service, then you're using inaccurate data for your models.

Potentially. In general, people tend to be pretty accurate in how they're listing their properties for sale. and it impacts their sales value so it tends to be a relatively reliable source but you're correct if there's a mistake in that data and we're using that to do an update then That can result in an errant value. The correction for errant values is the abatement process, and then when people file abatements, we can go and fix our data, and then that fixes it.

I didn't want to get to abatement right now. I just want to focus on the session. Thank you, Mr. Chair.

Thank you very much. Councilor Fitzgerald?

Thank you, Chair, and thank you to the administration for coming in. Good to see you all, and congratulations to those who deserve congratulations today on their, any next moves. I'd like to first ask, do we know how many residential and commercial property appeals or abatements were filed in the last year?

I didn't bring the number with me. It's between like two and three thousand.

2,000 and 3,000 abatements. and that would be just, you know, the residential versus commercial, that's in total. That's 3,000 between residential and commercial.

Yeah, I think it was 3,000 for 25 and I want to say this year was less. I just, I can easily get you that. Yeah. The exact data.

Great. No, no, no. But that's the ballpark.

But it includes everything, and it also includes personal property accounts.

Okay. All right. So do we know what the status is of the commercial real estate lawsuit? I know that the last judge said something could move on, but law is not my... The courts are not my expertise, so I just want to know where does that stand and what is the next step in that, those developers that were filing that for the commercial real estate lawsuit?

I think that there's a scheduled status conference or hearing to discuss discovery. I'm not personally handling the case, so I'm not sure.

What would increasing the residential exemption do to city finances? If we were to, what does that look like? Just say, we say, wait, for those that live here and qualify for residential exemption, if we were to increase that, What are the steps to do that and what occurs on the back end if we do so?

Sure. So, appreciate the question. Right now, we're at the maximum residential exemption percentage that we're allowed under state law. So we require a change to the state law, either through a home rule petition or just a regular filing. The impact on finances for the most part, the residential exemption is crafted in such a way that it It's designed to be like a net zero impact on finances. So it's basically like the city collects the same amount of money, it just collects it from different people. And so the way that gets impacted is that the residential tax rate goes up. and that's how it flows through.

In practice the exemptions that get built into the residential tax rate are the exemptions that we know of Thank you. Thank you. Relatively minimal. So the vast majority of residential exemptions are paid for through the tax rate setting process by other residential property holders.

So who would the others be? And what does it take to qualify for a residential exemption? Let me ask that first.

Sure. So the qualification for the residential exemption is that you have to have owned and occupied your home on January 1st preceding the start of the fiscal year. unless it's the first year that you acquire the property, in which case the determination date is the July 1st, preceding the start of the fiscal year. It's a relatively straightforward application process. You can reach out to our Taxpayer Referral Assistance Center to get an application. We also proactively send out applications to every property that transfers throughout the year. So if we see that a property sold, we send out applications proactively to address that. Did I get to the points you were... Yep.

No, I appreciate it. So then who, if you said raising the Rizal exemption just means, right, to net zero it out, just to collect from other people, the other people would be just kind of a widespread example of... is that, you know, renters

McKembe.

Who do we pull from, I guess, just like our budget system? If we're taken from somewhere, if we're leaving them, who are we pulling from?

Yeah, my answer is maybe a little bit oversimplified when I addressed it. Because it Thank you. For example, if you have a $5 million home and you were getting a residential exemption, you were overall paying more taxes on that home even with the residential exemption than you would be if we didn't have a residential exemption for anyone. So you can kind of like calculate the prior tax rate without an exemption compared to the tax rate with the exemption and then figure out What that does, it basically turns what would otherwise be a flat rate tax system into a progressive tax rate system. Lower value properties end up paying dramatically less, and higher value properties end up paying a little more.

So for the most part, it's paid through by higher value properties subsidizing lower value properties.

Understood, thank you. And how specific can we be with exemptions? Is there any guardrails or criteria of, say, I wanted to say, you know, I don't know, I'll use an example, right? A homeowner that's born and raised in the city, that's lived there for 20 years, that owns in this neighborhood, and you could layer on some certain things. Is there any end to the specificity that you can use in crafting an exemption?

That's a really good question. It's tricky. First of all, it should be clear that all of this requires changing laws and new filings at the State House for any of this stuff, right? Any changes to the existing programs. Because property taxes are very closely tied to our state constitution in terms of like There are things that are like, that's not quite an okay category to use. One way to think about it is to like point to things that have been used for exemption criteria and kind of like have passed those tests and challenges.

And so we have criteria for some exemptions that are related to length of residency in Boston and then length of residency in the state. is a criteria for one kind of exemption. We have criteria related to income. We have criteria related to asset levels. These are all things that are okay. We have criteria related to age that's okay. Criteria related to neighborhood is probably not okay. So it's like if you You want to give assistance to someone that has low income, it has to be no matter where they live in the community. It can't be like low income for this neighborhood, but not low income for this neighborhood. Because then you're taking... Two people that are otherwise in a very similar circumstance and treating them differently and so then that's not okay under our law system.

Gotcha. Any other categories around that neighborhood? And that is all I have to share. Like around me, are there any of the borderline ones that doesn't fall into the specifics, John?

That's the one that comes to mind most readily. It would probably be hard to... Just kind of spitballing. If you said you could get an exemption if you lived in a condo but not a single-family home, that's probably also not okay. The type of property is probably not an okay differentiator for getting assistance. Maybe you can make an argument for that. I'm not sure.

That's an interesting point, Jay, because I feel like we're building more condos. That's sort of all that gets built, but condos does not fall under residential exemptions.

Oh, no, condos do get residential exemptions. Yeah, and they're our primary class in the city of Boston, which means we have more Thank you Mr.

Chair and good morning team.

Thank you so much for being here. I have Questions specifically about the capital budget. And so a lot of my questions are going to be geared towards Ian. And just completely blunt with you all, when we entered this budget season, I was not thrilled when I got the capital budget packet. My district received if not the lowest amount of capital investments, probably the second lowest. And that just put me in a tough position. And I'm not, when I'm looking at some of the listings and having conversations already with other members of the budget team just expressing my concerns I would just I want to advocate for my district and I want to make sure that we're getting a fair share in return I represent a lot of homeowners I represent A lot of black and brown homeowners in specific, some of the highest percentages across the city, especially in Mattapan. And some advocates in Mattapan have reached out to me, rightfully so, because

There's been cuts to the capital budget. And they want to know what happens to it. How can we make sure that we are getting something in return? And even in Ross and Neal, Technically, that's $90 million, but a huge portion of it was for a school that has already been built and has been active since this previous September. So I'm getting questions from all three of my neighborhoods. Hyde Park, the biggest neighborhood I represent. Even the projects that are part of the future plans, a lot of them are still on hold. So I want to, I think Councilor Louijeune She was referencing this question. I want to just piggyback on it and say, when you're looking at these neighborhoods with such high homeownership, diverse representation, how do you guys take that into account when you're thinking about potential capital projects coming down the lines?

If they're getting completed, what are going to be some future investments for these neighborhoods so that I can go back to the district and say, U.S. taxpayers as homeowners are getting something in return for what you're advocating for.

Yeah, all great questions. Thank you, Councilor, and good morning. So I would say I have a few thoughts in response. I totally understand sort of where you're coming from, where your residents are going from as one of your constituents. I appreciate you advocating for us. I think there's sort of two challenges, right? One is a point that Councilor Louijeune brought up earlier. which is that if you look at the breakdown of the capital plan and investment by neighborhood, far and away the largest neighborhood that we invest in is citywide. That's not a very helpful criteria if you're a resident to know where are you actually investing? What does that mean? The flip side of that is that that is our biggest investment. That is where we are investing the most amount of money.

And that means that it's going to playing courts, it's going to field lighting, it's going to sidewalks and ramps and all sorts of other things that happen all over the city. Thank you. Thank you. It's great that we're investing, I don't know, $5 million in tennis courts or basketball courts citywide. But does that mean that my basketball court is going to get redone? And that's definitely room for improvement for us. But the short answer is, in a lot of ways, yes, that is how we are meeting those investment points for you, for your residents.

The other side of it too is that we, right, I think your example about the Sarah Roberts is great. This is an issue that we've run into when we are putting the plan together and when we're looking at it in terms of investments in neighborhoods, right? A year or two ago, Roslindale was actually one of the highest invested in neighborhoods because exactly we were investing in one school. We had the same phenomenon when we were constructing the Boston Arts Academy in Fenway. That was a very large investment in one area of the city and in one neighborhood but functionally it's a school and so that's really a citywide investment but we also want to reflect what it what it means We sort of run into that situation of how do we put things into neat little boxes that don't really want to be put into neat boxes in a way that then ultimately for residents, they're just wondering, Is this thing going to be repaired? Is this thing going to be invested in?

And a lot of the time we do look to our, like I said earlier, we look to our partner departments. to get their subject matter expertise about what are the things that we want to make sure that we're investing in first and foremost. What are the things that are in the worst condition make sure that we can hit those make sure that we're bringing everything up as much as possible to a minimum level of acceptance and then we can sort of keep iterating from there It's tough, especially in financial times like this. It's tough. There's always more to do than there is capacity to do it. But in general, we look to the things that are in We look to where there have been historic disinvestments to make sure we're proactively investing in those places and bringing all those assets up to a minimum state of good repair. So it is tough, but we do really try to make sure that we're meeting that.

And I think there is definitely more work for us to do, certainly on the communication side.

And I appreciate that. And even for the citywide portion that you mentioned, Not just help for the residents, but even for ourselves as councillors to say, you know, we may not be seeing, for example, there's a lot of investments in pavement for repavement. I want to know, like, How much of that is going to my district specifically? I think that at last year IGR did a good job of letting us know when there was going to be work being done in our district so we can share that with residents so that they are seeing that return of investment and then Before I finish, this is more of a request. I want to give a shout out to some of my Mattapan leaders who sent us a letter. They would like updates. On a few projects. The bookmark project for the Boston Public Library. They've been waiting for years for this project. They want to know what happened to the, this isn't just right at the border of my district, technically, but they're interested in the Shaw-Taylor Elementary Schools. Thank you.

Thank you. Getting ready, that they're in a timely manner, gonna get done. And I would love that. I have a meeting with a lot of the leaders next month, so I would love to present that.

Yeah, definitely. Do you mind if I quickly respond? Please. I'll quickly respond only because I only have good news on all three of those. Otherwise, I would tell you to get back to you later. But I can say for all of those, they are moving forward. Bookmarked, I'm the least familiar with, but I know that the... The arts and culture department is, I believe they have a new artist that they're working with. Shaw Taylor is advancing through the MSBA process. and many more. We're calling it two phases, but it's all under the same project. We're beginning with the outside work, for which I believe the Public Facilities Department is going out to bid right now. and then we're going to be proceeding with the internal interior components of that project I believe later this year or early next year.

Thank you, Ann. Yeah. Thank you, Chuck. OK. Thank you. Councillor Murphy.

Thank you. Thank you to the panel for all being here. I'll quickly just touch on what Councilor Pepén just talked on to start. How do you consider an investment in the capital budget citywide? Because as an at-large city councilor, obviously I have to advocate for projects citywide like one that comes to mind which is obvious like when we moved the school department from Court Street to Bowling and it's in the heart of Nubian Square obviously that's a asset a city you know building that every resident How do you make those decisions?

So in general, we try our best to locate the project in the actual neighborhood in which it's happening. So, for instance, the bowling building project, I think, or at least any investments we're doing here in City Hall, the City Hall Plaza project we just did, we called that an investment in downtown. Occasionally, we have a separate category we'll use sometimes that we call central facilities to try to capture things like 26 Court Street or City Hall, things that are investments in a location, but it's not really a location specific.

And do we have specific data on which residents in the city from their zip code or street that will be able to take advantage? Because sometimes the school, maybe high school based on No assignment policy. Maybe every resident will have access, mostly not.

It's a good question. I mean, we grapple with it every year. We generally put schools in the actual neighborhood in which they are located. in general this is you know for elementary schools especially we feel like that makes a lot of sense for high schools it's a little bit trickier but at the same time I think there is You know, an investment in the Shaw-Taylor, residents of Mattapan feel in a lot of ways like that is a Mattapan investment, right? And so we want to reflect that as best we can. Citywide, we generally use for a lot of our annual programs, things that we do on a continuous rolling basis.

Okay, thank you. I have an auditing question first. Good morning, Scott. How are you? Good morning. How are you? So it says that this office has reduced repeat single audit findings expanded guidance for departments managing federal funds and requested a new compliance officer position. Yes. Given the uncertainty around our federal funding and the need to protect every dollar, What are the most common compliance weaknesses you are seeing across departments, and how will this new position prevent problems before they become audit findings?

Sure. So your first question is, Typically, the most common finding is usually around subrecipient monitoring. It can be as Something where there's one data element that's missing in an MOA with another organization. Thank you. Thank you. Clear checklists and templates that you just fill out having a standard addendum to everything to try to combat that. When it comes to the compliance officer, so when we got the ARPA money, we created a compliance officer specific to ARPA. That position, we were able to fund that through the ARPA funding, but that position

Put a lot of, shed a lot of light into more compliance areas that we can look at, plus evolving federal reporting. When I was in charge of federal reporting a few years ago, it was much different than it is today. It's a lot more. Detail, we'll say, and it takes a lot of time. So my goal in this budget was to take that compliance officer position when ARPA ends on December 31st of this year. and transition that position to my operating budget halfway through the year so I can continue additional compliance around monitoring.

That will stay. Yes. Thank you. Also, it looks like you're planning to publish the city's first public annual financial report. I support that and making it easier for residents to understand what will be included in that report, when will it be published, What do you feel will clearly show residents how much money comes in, where it goes, what major risks or obligations the city's carrying?

The charter we published the annual financial report usually around the end of December and that is filed with the council and then published on the city's website. I believe the report you're referring to is something that we're and so on. It's kind of more like a PowerPoint presentation. It just shows how much money is coming in and how we're investing it citywide. It just kind of tells our financial story a little bit easier than a simpler.

Thank you. I'm looking forward to that.

I support that.

For the Treasury, the Collecting Division says it works with the Mayor's Office of Housing, the Home Center, and Age Strong to connect taxpayers with resources. And it has a special project to reduce tax takings by 700 parcels. Can you walk through what happens before a property reaches tax taking, especially for seniors? Are veterans, disabled residents, and families under financial stress? And how many residents were successfully diverted from tax taking because of this outreach from your office?

Thank you, Councilor. So what we do, my team, we have a section called the collection specialist. So they work closely with the taxpayers. My goal, well, what I teach my team is to, Build a good guidance and a communication form. To communicate with the taxpayers. So what we try to do is we do an outreach program where we send out emails to notify taxpayer whether about the balances that's on the account. We annually send out the quarterly tax bills. We wanted to push further just in case the mailing address might be incorrect where we could provide information on how they could update the mailing address or We're with different departments like A-Strong if they need further assistance on payments.

Do many residents or businesses claim that they didn't get a bill? Like that is one of the most common reasons for why it wasn't paid?

When that happens, they'll normally reach out to us. They'll reach out to the collecting division or the assessing department. And what we could do is just provide that information on how they could update that mail and address. What we could also do is quickly Resend the tax bill to them if a new tax bill is needed, either by email or by mail.

I'm out of time for this round, but thank you.

Okay, thank you very much. A couple questions from the chair, and then we'll get to public testimony. So, Commissioner Aranello, There's, in terms of vacancies, there's about 20 vacancies, I think, every year going back five, six years in assessing. How does that impact your ability to function?

Yeah, it's not great. Ideally, we would be fully staffed. And you're right, right now we're about 20 spots short of being fully staffed. We have a really good team. A lot of people step up. They cover multiple areas. But it's a challenging department to bring in Thank you for joining us. What positions are the hardest to fill and retain people?

The hardest to fill are probably any evaluation position that requires experience. And so the way that we've been approaching that is we hire a lot more entry-level trainees with no experience, and then we pay for their coursework and we develop them. But then the kind of skills that they generate once they've been with us for a few years makes them very valuable to other communities as well.

and then just so in the salary savings portion of the budget, I think it's like 800 something plus thousand in salary savings. Does that mean you're not planning on filling those positions in the next year?

Yeah it means that we will have to leave a number of those positions vacant to be able to achieve the budget as it is currently structured. I think we're about The recommended budget is about 13% below what we would need if we were fully staffed.

Does that impact your ability to actually do the assessments? It makes everything harder.

We still get through and we accomplish things.

We're sort of tweaking the The payment sort of structure like we were going from trying to get 35 to 40 percent of our loans paid off in the first five years to 30 percent and then we go from 65-70 paid off, 70% paid off in the first 10 years to 55% paid off. So is that... Is that as far as we're willing to go on that in terms of capital planning? I don't know. I'm not sure. There's someone else who wants to talk about that. Is that a treasury issue? Because it saves us money in the short term, and it costs money in the long term. So I'm just trying to figure out on the...

I would say it was a policy decision made in close collaboration between the two. I mean... I think you actually might be able to speak better.

I mean, are we pushing the envelope here in terms of what's fiscally responsible, or do we have room to maneuver?

So we added language so that it's no less than 30. So it still gives us the flexibility to do more than that. We just knew that we would need a little bit more. I mean, there are other municipalities that have different The ratio is much lower than ours. So when we look at our neighboring municipalities, we're still performing better, I would say. But it does give us that flexibility. So we can always do more.

Well, if we took advantage of the flexibility, because I can't tell the future, like how much, you know, if we go from, let's say, 35 to 30, On that first five years that we're paying off, how much does that cost? How much will that cost the city over 20? I assume we're fully paying it off over 20 years. Ian's nodding his head. I don't know if somebody has that.

We can do some calculations for you. But the difficult thing is that when we issue debt, it's all based on that day's market rates. So it might be a little bit difficult. But we can say, because we just issued debt on May 11, so we can Maybe provide some numbers for you that if we were to take that day's rates and model out a scenario, we can come up with something for you. What we have the option to do is more flexibility in our amortization tables. So by allowing us flexibility for fiscal 27, we have the ability to save debt service in the amount of about $30 million. But that means that we can just structure it so that we're more flexible on our payments.

Okay. But we're expecting it will cost more than $30 million after 20 years? No. That's it?

It just gives us flexibility for when we pay back. So for next year, like I said, our budgeted debt service is somewhere around $300 million, but we're able to structure our debt so that we don't Thank you.

Okay, thank you very much. We're going to have a second round of questions, but first we'll go to public testimony. I have here, I have Greg Maynard, Kevin Norton, Ryan Kelso, and Jason Yutkins. So you have two minutes. Again, please, when you hear the buzzer, just acknowledge that you have heard it and that I don't have to cut you off and you're wrapping up. If you tried plowing through, I'm going to have to stop people, and I don't want to do that. So whenever you're ready. GREGORY MAYNARD Thank you.

My name is Gregory Maynard, and I'm the co-founder and executive director of the Boston Policy Institute, Inc. The Walsh administration appears to have been much better at revenue forecasting than the Wu administration. Figuring out why should be a priority for the Council and the Wu administration Because until these inaccurate revenue forecasts are fixed, solving the large fiscal crisis facing Boston will be impossible. Let's look at evidence the claim is even true by comparing the revenue forecast for the first three complete fiscal years from Mayor Wu and Mayor Walsh's terms. First up, Mayor Wu. FY23 was $258 million or 6.5% over forecast. FY24 was $189 million or 4.4% over. and FY25 was $107 million, or 2.3% over. Now compare that to the first three complete years of Mayor Walsh's administration.

FY15 was $46 million over, or 1.7%, FY16 was $25 million over, or 0.9%, and FY17 was $21 million over, or 0.7%. What do all these numbers add up to? Over the course of his whole tenure, FY15 to FY20, the Walsh administration was about 1.1% over its revenue forecasts. In its first three years, FY23 to FY25, the Wu administration was about 4.4% over. Inaccurate revenue forecasts were in Mayor Wu's favor in her first term. Those enormous amounts of over-forecast revenue provided the cash for her housing accelerator fund. Now, in FY26, however, those inaccurate forecasts are hurting the city. CFO Grafenberger reported in March that $7 million of the FY26 deficit is due to permits and licensing missing its revenue forecast.

That is the third year in a row the City has missed that particular revenue forecast. Boston is in the midst of a fiscal crisis thanks to falling office values and the collapse of new growth. Now, in recent months, it has been revealed that Boston has another separate issue, fiscal mismanagement. Inaccurate revenue forecasts are an important part of that mismanagement. Boston needs accurate numbers in order to make the right decisions about its future. The Wu administration needs to figure out what mistakes it is making and fix whatever is wrong inside the finance cabinet. Thank you.

Okay, thank you. Kevin Norton. and Ryan Kelso and Jason Yuckins.

Good morning. I'm Kevin Norton. I'm a Brighton resident for the last 26 years. I'm here to speak about the Jackson Mann Community Center. I find it kind of interesting that all of the other neighborhoods in the city of Boston have at least one community center available to their residents. And my understanding, another one, the North End, I believe, is about to get a second. I just can't understand why all the other neighborhoods in the city are allowed to have this service and yet their Jackson man has been left to languish. and Rot and Drip for the last seven years. And this seems to be kind of a pattern of a political emasculation and an isolation of Alston, Brighton. And it's not only from the current administration, it was from the previous administration.

We're expected to contribute to city coffers. We're also expected to support mayoral incumbents. And yet, at the same time, our return is underwhelming. Thank you.

Okay, thank you very much.

Hi, how's it going? I'm Ryan Kelso. I'm also from Alston. I'm a member of Alston-Brighton DSA and Alston-Brighton Housing Action. I'm also on the steering committee for Alston-Brighton Progressives. I just want to talk a little bit more about the Jackson Man. I'm sure you're going to hear a lot more about that later on today. But I wanted to speak to the historic disinvestment part of this, which is... Alston-Brighton. So I've got a table here of the capital budget per capita this time around of each neighborhood. And I've got the four least here. Alston-Brighton is the fourth least. And then I also took down some notes on what kind of community center resources they have, because it stands to reason if a community has fewer resources, you might invest more capital budget.

Number one, least, so you might be interested in hearing this, Councilor Pepén, is Roslindale, $190 per person, roughly. They've got two community centers, though, with an auditorium, a gym, a senior room, teen center. Fitness Area, Computer Lab. So a lot of good stuff. Second, Hyde Park. $348 per person this year. One center with a gym, an auditorium, and a track. So a lot of resources there. Mission Hill is $478 per person. It's got two centers with a gym, a conference space, a tech room, a teen room. A batting cage, a garden, and a stage. I thought those were kind of interesting, unique. And then fourth is Alton Brighton. It's about $500 per resident. We've got one center.

It's got a teen space, a computer lab, a gym, And then it's listed. It's the only center on the website that's so underfunded they bothered to list classroom space as a feature of the community center. Every community center should have room to host a class. So, all I've really got to say is, you know, what are we doing here? It doesn't really add up. So, thank you for your time.

Thank you. Jason.

Good morning, Council. My name is Jason Atkins, President of the BPA EMS Division at Boston EMS. I want to thank the Council and the panel today for the opportunity to speak at the 2027 budget, but more importantly, the capital plan inherent. Every year, the Council talks about public safety, health care access, equity, emergency preparedness, neighborhood reinvestment. Boston EMS is the center of all of these conversations. But the reality is many of the EMS facilities are Members' work out of every single day are out of date, undersized, and no longer meet the demands of a modern EMS system in a growing city like Boston. Boston EMS is expected to respond to overdoses, cardiac arrest, Behavioral emergencies, shootings, stab-ins, fires, major incidents, disasters in every neighborhood of Boston, often within minutes. Yet many of our facilities were never designed for the staff and equipment, training, or operational demands we are facing today.

If the city is serious about emergency preparedness and equitable public safety and health care, then Bosnia and Herzegovina's station, construction, renovation, and long-term infrastructure investment must be a priority here, especially in Roxbury, Dorchester, and Mattapan. Because where ambulances are deployed, where crews are trained, and where resources are positioned matters. These investments directly impact response times, workforce retention, operational readiness, and ultimately patient care for the residents of Boston. I think some of the conversations that council has already discussed with various projects In our neighborhoods is great, in particular, the hopefully for a new community center in my neighborhood, Austin-Brighton, in the north end, affordable housing in Chinatown, improvements within our school system throughout the city. that reflects exactly the type of forward-thinking plan in the city should be continued to do, but also with EMS. Boss EMS should be a part of the vision as we plan for the future for public safety and for healthcare across the city.

on behalf of all the EMTs and paramedics, I urge this council and this panel to make EMS infrastructure investment a meaningful part of the city's long-term capital strategy. Thank you.

Thank you. Okay, we don't have anyone online, so we're gonna go for a second round of questions. I see we still have a full house. We're gonna do five minutes. I don't know, Councilor Flynn, you're up.

Yeah, thank you. Thank you, Mr. Chair. Maybe to the city auditors. Let me ask Boston SAR Overspending equal to roughly 3% of the city budget. What oversight failures allowed that level of overspending to occur without any type of earlier Intervention.

I wouldn't say there was a lack of oversight. I mean we have a lot of practices and controls in place making sure that our Our financial system is current. We're closing our books on a monthly basis so that we can provide reporting to the budget team as well as various other teams within the finance cabinet. Those reports are reviewed. One of the things that helps determine those any additional controls in place and as time progressed we identified certain areas and those areas were addressed through tighter controls for the rest of the year.

Okay.

The, and I've been focused on this Wolf report for a long period of time, but have any of the revelations from the audit affected Boston's decision to slash grants?

The decision to, in this upcoming budget? Yeah. I would say no to that, no.

Okay.

No.

Okay. How did the conclusions from the audit impact the City's decision about how we move forward with the Main Streets program.

So I think the most important, well I shouldn't say the most important, but one of the important things that we We're able to confirm was that that was an isolated incident and that will be in the report that We'll get we'll get over to you and all the other counselors today But so it was isolated. I think the the more That we were able to come out of it was we also looked at how we were running that operation how we were making assessing risk how we were monitoring and making decision makings and I think through the suggestions that you'll read about we will We will have some new techniques that we can use more on the front end before we issue any grants to any Main Streets organization as well as any other organization through any other potential grant programs.

Mr. Auditor, I just wanted to acknowledge our professionalism over the many years as well, and you and your team. So I just want to say thank you. Let me try to go to assessing. Moody's Rating Credit Report included a paragraph, if I'm reading it correctly, about the ongoing add-back policy lawsuit, writing, A negative judgment on the City could be a credit negative event. What's a credit negative event?

That would be a change in their outlook. So currently with their most recent reading from both Moody's Inn, S&P, the city was rated as AAA stable. So the best of the best.

So if there was a, if the lawsuit or the court case, I should say, I just want to be accurate. But if the court case ruled against Boston, would that negatively impact Boston's AAA bond rating?

I can't say for certain. I think that it would have to depend on to ratings basically care about the fiscal stability and certainty of a government right in terms of These particular reviews. So I think it just turns into something that is a determinant of what the conclusion of that would be and what the liability amount would be and whether the liability amount would be significant. So there's a number of variables.

And Nick, always enjoyed working with you. May have disagreed, but I always thought you were professional. Thank you. Respectful. One of my colleagues referenced something about a retirement. I just saw something pop up on a social media site. Maybe it's accurate, maybe it's not accurate. It kind of referenced that you were retiring. Is that accurate?

So I'm leaving, not retiring, unfortunately. I'm a little too young for that. So that's probably at least a decade in my future. But yeah, after 20 years, I've decided to move on.

Well, thank you for your service. Mike, just a quick follow up. So what is the plan to ensure that leadership management of your department continues and how do we ensure that that stability of leadership continues to work with the city council Obviously the mayor's office and the public, but what is the plan as you leave?

So I think that it's something that's still in conversation. I've been talking to the CFO's office about it. I've been talking to my department about it, my staff, to It's something that we're always, we always wanna make sure for all departments in the city that we have kind of contingency plans and redundancy plans to make sure that Things don't fall apart just because one person moves on. So I think we have an excellent management team in place that worked for me. The department's really nicely structured. There's a lot of great experience there, some really good people. and I'm confident that they're going to work together well with the mayor and the council and CFO's office and everyone to continue to produce high levels of results for our constituents. Thank you, Nick.

Okay, thank you, Councillor Flynn. Councillor Louijeune.

I haven't been on social media, so I haven't seen any posts, but I wanted to say congratulations and thank you for your service to the city. Enjoyed working with you. I have two questions. One is sort of like the long term thinking about free cash reserves and long term fiscal responsibility. When the annual comprehensive financial report is published, What specifically should we as a council be looking at? The second and third metrics. The most important indicator should be, obviously, the AAA bond rating, but what are the, Other important indicators for this body to consider when reviewing the sort of fiscal health of the city and what about those indicators are important.

So I think when it comes to the comprehensive financial report, I mean, fund balance is always a good indicator to look at.

Fund balance, that means the amount in reserves.

Yes, and how much we, you know,

We talk about in the disclosures a lot about... And do the, do like Moody's, S&P, they look at that as well and that matters significantly?

That is a significant...

Is there a ratio that is important? Is it like a certain amount in reserves vis-a-vis what your budget is?

Yeah, so it's typically what we have in the fund balance at the end of the year as a percentage of and so on. And that being a good metric so if you are at or above would it be below

At or above, right?

Yes.

25% in cash reserves of your budget. That's more likely to get you a AAA bond rating. Yes. Okay. And what is the third metric?

So, I mean, we talked about cash as well. I mean, cash, obviously. And then I think one of the third metrics that is kind of important is how we translate those numbers into we talk a lot about free cash and I think the the reconciliation to what we have posted in our financial reports versus what the division of local services and many more.

And in the same way that you said 25% of free cash is a good, 25% of reserves is a good indicator of sort of fiscal health, you know, our budget is four point, however, what is that for free cash?

So there's really no... Thank you. Thank you. you know they focus more on standard accounting policies you know government-wide where the free cash calculation is just something that this state does and kind of like translates from governmental accounting policies into How the state translates that to free cash. So I don't think it's a one for one type match. I mean, it's not significant, but it has been before. The difference between the two, but I think more when we focus on, we want to focus on the financial statement for that.

Thank you, and I know this is usually a question for Ashley and Jim, but another question, like amortization rates I know is something else that the Freighting agencies also consider as well.

Yeah, they do. And just to follow up on the cash question, they do look at cash on hand. So it's another metric that's used, but it's a broad scorecard that has Not just our financials, but also our structure. Who's in the roles? How long have they been in there? So they have a lot of different metrics that they use. But for the percentages, the amortization tables, so we have flexibility in the way that we pay our debt. Yes.

This is the first thing, my first city council hearing was on this exact topic.

Yeah, it's something that's a tool in our toolkit for us to be able to look at what our needs are versus how our... Thank you. Thank you. for our debt service as a percentage of the operating budget. So this new policy or the changes to it just gives us more flexibility.

Yeah, and I've always advocated for that flexibility because I think we were doing more than we had to. I think it was really important for us to be able to capture more you know slightly lower that percentage of debt service so that we can have that flexibility because there are cities that still are like I think a lot of our bonds want a 20-year amortization rate and I think it's still achievable to get the AAA bond rating that we seek when we are on a 30 year amortization. I had one more question related to that, but I just wanted to ask a question about We've looked at it a lot and whether the city banking relationships should include stronger community reinvestment, fair lending, branch access, and neighborhood level reporting. I was wondering how Treasury currently evaluates the banks that city that hold or manage city funds, and will the department be able to produce a more public-facing annual depository and community reinvestment report?

Yeah, I can take that one too. So we do have a lending deposit report. I think one just got posted. If not, will be soon. And we can make sure that we look at some of the reinvestment metrics, maybe work with you to see if there's something that's not there that you'd like to see. But we have some BI tools that can show by neighborhood. But one of the metrics that we look at is branches and branch availability for the residents.

Awesome, yeah, my office would like to, we've been doing a little bit more work, so I'd like to dig in more. Sure. Thank you, and thank you, Mr. Chair.

Okay, thank you, Madam President.

I'll probably pick up a little where I left. Nearly every department shows major discrepancies between financial year 26 Capital spending as budgeted last year and what was actually spent. For example, BCYF went from a planned 56 million to an estimated 26, down to 26. and what issues are driving these consistent gaps between planned and actual spending. We also saw enormous swings in planned expenditures year on year. District 1 jumped from $10 million to $324 million. and then dropped back to 103 million. How can the council evaluate the credibility of a capital plan when projections fluctuate so wildly from year to year? Any thoughts on that?

Yeah, so I'm not sure specifically what things you're looking at, so I can't. I'm going to do my best. We've got it in the budget book. Okay. So I think that the... One of the things that changes dramatically from year to year, as you pointed out, is the projected spend versus the actual spend once we actually see it come in. A lot of the time that's based on estimated timelines that might change, right? When we're putting the budget together we're very very confident that such and such project is going to advance on a certain timeline and then something changes with the bidding and maybe one of the vendors you know and many more.

That's because we update the budget for any individual, any given project to more fully reflect what the actual total is. There will be one year where the project will be budgeted at, say, $5 million because we're in design still, and then we're ready to move into construction. and so we'll add the full funding for the project and then that'll increase it by say 25 million that's you know money that wasn't there prior so it looks like a jump it's money that in theory we were

Is it possible to get a commitment from for a quarterly project level reports from you know including original budget budget Current budget timeline changes and reasons for delays. We are expected to sign off on approving billions of dollars of borrowing, and it's a great frustration to me that we spend so little time looking at the capital, and that one, you know, to have a A regular review of update on where things are at. You mentioned earlier that the largest neighbourhood is citywide and I agree that we have projects like some departments work citywide all the time. In terms of, we've been doing some work on just how capital budgeting works in other cities and

DC is consistently held up as having a gold standard for capital planning and the way they do it is they break the city down by district and they You know by district what money is going into repaving, what money is going into sidewalks, what money is going into parks or whatever. Do we have an in-house office of GIS analysis for your department to know where the money is actually being spent?

Yeah, so I know that DO-IT has a very strong GIS team that we work with when we publish the map that we publish every year as part of the budget release. That's up on our website right now, our capital projects dashboard. We work with them. I think we also definitely work with our Our streets cabinet, our parks department who are a lot of the owners of those citywide investments. There's definitely more collaboration that we can do to help increase some of that transparency that you're talking about.

The other question I have is, you know, we see projects that sort of disappear from the list. How do we determine when a project moves forward in the capital planning process?

Yeah, so it's a decision with a lot of different decision points and decision makers. A lot of it is dependent on the scope and scale of a project. It's easier for us to resurface a court than it is to and so on. We look at what our projected revenues are, we look at what our current obligations are, we look at what a realistic timeline would be for all of our different things, and we take heavy consideration into Who is it going to impact? Where in the city is it? What is the need of the facility? What is the current condition of it? Or the asset, whatever it might be, street, building.

Community Center, Park Library, and try our best to make a decision that is very hard to make, but make one that's going to invest where investment needs to happen.

Okay, thank you. Thank you, Mr. Chair. It's my time for now.

Okay, thank you. Councillor Culpepper.

Thank you, Mr. Chair. I wanted to just come back to the data for a minute that we talked about. And the Small Properties Owners Association did that research and I think you saw that in the article. This is what they said. The data presented by the association found under assessments of just the top 20 luxury properties sold totaled 83 million in 2026, 43 million in 2025 and 35 million in 2024 and then it said if these the city taxes property at their full values that would help offset the spike in residential As you saw the numbers go down, how do you think, or have you looked at how you can make adjustments so that the underassessments

Thank you for the question, Councillor.

I really appreciate it. The department is extremely focused on making sure that we're valuing everything across the city at all levels at fair market value as we're obligated to do. The report that you mentioned is Deeply flawed to a level that feels like it might be intentional for a number of reasons.

What about the numbers? Are the numbers accurate? $83 million in 2026, $43 million in 2025? and 35 and 20 and 24?

I would say they're not accurate. And the reason I would say they're not accurate is that they have two samples for each one of those years, right? Low value property and high value property. For the low value property, They use sales that are of the correct time frame. So for the low value property, they use sales that occur before the lien date that we have to use for assessing by state law. For the high value property, and this is consistent for each year in the report, For the high value property, they use sales that are after the lien date that we're not allowed to use or we couldn't have known of by the time we were actually setting the value. And so they're creating this clear distinction for these two kinds of properties to make a gap look bigger than it actually is if they were using consistent data for both sides.

And I see what they did. But in our earlier discussion, we know that there are possibly troubling Thank you very much. is accurate data.

Sure. A number of things that we do to address that specifically throughout the year, right? So, for example, right now, the main focus of the department is maintenance. And what maintenance is, is that We send assessors out into the field to verify sales information and also to verify permit data. One of the things that we use by way of example to change property characteristics is if someone pulls a permit, there's a certain amount of information that you can get off of the permit, like it's a renovation to a kitchen. And so, but just because you pull a permit doesn't mean that the work has happened. Right? And so we don't automatically change properties just based off the fact the permit was pulled. We go and we send people out in the field to gather more information to try and determine where that work has actually occurred. We also send out information requests for commercial properties.

to determine things like leasing activity, rent levels, expense changes, all kinds of information that goes into our commercial modeling. And so there's a bunch of different ways that we try and Get initial data from one source and then confirm from another source in order to get the most accurate thing that we can system-wide.

Right. And how often are they going out to the beacon here Beacon Hill area versus a Rosendale area. Especially when you have staff constraints.

They go out to all areas every year. Like all neighborhoods are reviewed every single year.

Every residential unit that we're talking about?

So we can't go see all 180,000 properties in the city every year?

And how do you fill that gap where you don't get to those residential units? How do you determine... The difference when you do go out and you come back with the more informed data versus the residential units that you don't get to go to.

Basically, my research division pulls a bunch of reports in terms of sales activity, which is the in part MLS data that you're talking about, but also sales that happen that aren't on MLS. Those get translated into reports and maps that get assigned to assessors that then go out into the field to look at certain areas to verify data points. Then we also do an internal review using technology that we have. It's this system called, I think it's called Street View currently. It's very similar to what Google Maps does, except it's much more accurate. So you can go through neighborhoods and get a video capture that you can pan and scan around the image. And the images are all taken at the same time in each year.

And so one of the shortcomings of Google Maps is that if you're looking at it, you might be looking at one property, what it looked like yesterday, and you might be looking at another property next door and what it looked like five years ago. That's not accurate enough for our methods. And so we pay every year to have them go out and take pictures of the entire city at a particular point in time. And then we can compare changes over time for various neighborhoods and build that into our modeling. We can look at specific properties when there are concerns. And then a lot of times the fail-safe for all of assessing is the fact that we have this abatement process so that we can quickly correct errors

I think we'll have time for a third round, but if you have a follow-up.

Can I ask a question now?

Sure.

Just real quick. Do you agree that there are under-assessments and over-assessments taking place? I would say that it is... Especially when you agreed earlier that there could be problems with the data. that you're inputting based on the multiple listing services?

I think it depends on how you define it. We're not going out and doing 180,000 appraisals every single year and looking at each property specifically. The system relies on this mass appraisal where you're trying to get the most things right. with the smallest number of mistakes but that doesn't mean that there aren't mistakes so like there definitely are properties that are under appraised and properties that are over appraised and a lot of our Okay, thank you very much.

So Councillor Coletta Zapata is on parental leave. And in support of anyone taking parental leave, she submitted an absence letter with some questions. So again, none of my colleagues I'm going to read out her questions if you could answer for her constituents. Last year Councillor Coletta Zapata advanced a good landlord tax abatement which allows Municipalities offer property tax incentives to landlords who voluntarily maintain affordable rents for low and middle income tenants. What review or implementation analysis has

Have you conducted census passage and what administrative, financial, and operational steps would be necessary to launch an opt-in program in Boston for the good landlord tax abatement?

Thank you for passing along the question. So that program is... A very challenging one to kind of determine how to create guidelines that are constitutionally fair and appropriate but also then limit the City Councilor, City Councilor, City Councilor In order for that program to function, it results in direct city expenditure, which means that we need to be able to make sure that we can fund it before we implement it. We've had a number of conversations to try and figure out internally within the administration to figure out if there is a way to limit the potential expense.

in such a way that it would be affordable but also have those restrictions be things that are constitutionally allowed and we haven't come up with an implementation system as of yet.

Okay, thank you. The North End Library Capital Project has remained to be scheduled for well over a decade. Ian, this is for you. Can you help us understand why that status has persisted for so long, whether the library remains a capital priority? If there's any plans in fiscal year 27 for repairs, accessibility upgrades, State of good repair improvements or steps to move the project forward?

So we are planning on doing some state of good repair work. I think particularly around the windows. and some of the masonry work needs to be done was flagged by our facility condition assessment. So we're planning on moving forward with that. It's not reflected in the capital plan. Thank you. Thank you. The timing is on scheduling it and figuring out how we can fit it into the cash flow is very challenging, especially given our other priorities that we have across the city. But we're definitely going to make sure that we get some work into it in the next few years to keep it in a state of good repair.

Okay. Do you have any updates on the Charlestown BCYF for a new Charlestown BCYF facility? There have been discussions several years ago. So what's the status of that?

So I know we did a study recently. It was the same study that helped produce the Grove Hall Community Center that's in construction right now. My understanding is that, in general, the BCYF Center is working very well as is right now, but I'm not sure if there are any other How is the auditing department doing?

Mr. Finn, strengthening oversight and accountability to ensure departments are operating efficiently and public funds are being used.

Yes, so I think one of our main things in this budget to address strengthening that is taking the compliance officer position and implementing that into our operating budget as a continuous role and then kind of building that out in the future. It just gives us a lot more power to be able to focus on certain programs and departments, have a little bit more oversight on issuing contracts and monitoring contracts, and I think that will be Probably our biggest way to achieve strengthening that in the upcoming fiscal year.

Okay. Okay. Well, thank you very much on behalf of Councilor Coletta Zapata. A couple questions for me, then we'll go to a third round. I mean, in terms of revenue projections, Jerica, can we talk about that or do we need to direct those questions to the CFO?

Are you talking about just the line item in the budget?

The revenue projections for fiscal year 27.

Yeah, those probably would be best directed to the budget office. But if there's something specific...

Well, just in terms of AI, I think we are projecting like $10 million less in jet fuel excise taxes. I don't know if you wanted to talk about that, what went into that. Decision-making, also licensing and permits are projected to have gone down. and many more. What moves is the interest on investments? And we're projecting, I think, that to go down, like, almost cut in half. And I mean, are we...

If you have any comments on that or what are we doing to, is there anything we can do to raise the revenue that we're getting from interest on investments that we're not doing already?

Sure, the first few component parts will direct to the budget office. What I can speak to more directly is just the interest revenue piece. So as you know, we have Cash that we keep in bank accounts that are closely monitored by or follow the Fed whatever the Fed does so if they decrease rates and we're getting lower interest revenue on those accounts So that's a big component of why we're projecting lower interest revenue. What we can do about it and what we have been doing about it is looking at different types of asset allocations that we can do, different types of things we can invest in so that we ensure there's not a huge drop off of Interest Revenue so we can normalize that a little bit. But we have to be mindful of our cash flow.

So when we need funds to go out the door, we don't have them in a certain asset class that we can't pull from as easily. But we are monitoring ways to move things around through asset allocation.

Like what are the sort of guardrails on what we invest in or what the kinds of accounts that we have? Can we just put it all on? You know, the riskiest AI investments or something?

No, we definitely can't do that. No equities. So these are all just interest-bearing accounts. We can invest in U.S. Treasuries. I can also send you our investment policy which lists 14 different asset classes that we can and we're not invested in all of them.

Is that dictated by state law? Yes. Okay, and then just for Commissioner Aranella. Well, I guess, Jerica, I don't know if you had any comments. I mean, we heard from Mr. Maynard about the difference in We did hear about how we conservatively budget projections. Part of the plan to be 5% off so we have that money for reserve. Do you have any follow up on that?

I think overall comment would be different. Thank you. Thank you. I think as it relates to what we're able to achieve through investment revenue, Five, ten years ago, we didn't have the interest rates that we have now, so we have to be able to adapt, and we're trying to find ways, as you also heard through our debt policy, that we're trying to be more flexible to allow ourselves to be able to do that.

Okay. And then just for Commissioner Aranello, before you head out the door. Well, congratulations, by the way, and thank you for all your hard work. In terms of, I think there's a dovetail, I think, on Councilor Culpepper's question about inaccurate or assessments that are off. I guess so and there may be inaccuracies inaccuracies in the data like on the MLS listserv or whatever but where we have based on that data like so I'm struggling like do we Do we decrease assessments in certain areas? I think the lawsuit over the commercial properties or that we're inflating those numbers.

Like, what's your response to, like, when we have, based on the data we have, you know, are we just crunching the numbers or is there, do we put our foot on the scale some places and not in others? How does it work?

Yeah, no, thank you for the question, Councilor. I deeply appreciate it. So assessing's Our objective and the requirements that we have to meet because of state law are to assess all properties at market value. We do not intentionally overvalue or undervalue any property. Everything is based on the best information that we have. Both on property attributes and on arm's length transactions that are happening out in the market. And so we get The MLS system has information a little bit on both, but our primary source of information on sales is what gets filed at the registry of deeds. and then we go through a sales verification process to determine whether those are arm's length transactions to work with our model or things that don't quite work in the model.

So for example, you have a transfer between family members for a dollar, that doesn't Get factored into our model in terms of sales transactions because that's not an arm's length transaction. And then once we have that set of data, we do An enormous number of checks and tests to make sure that we are not only meeting the state requirements but exceeding them in a number of areas. So we look at sales ratios, We look at assessment cell ratios for different value levels and we compare them. We look at assessment cell ratios for different parts of the city and compare them. We look for different property types. We break things down into many, many, many different categories and then are constantly fine-tuning our modeling to make sure that our values are being

As accurate as possible per the state guidance and requirements, I think the kind of Demonstrate proof of that system being effective. You can look at our abatement counts. I can get you historical data on abatement counts. I really just have rough The fact that we have under 3,000 abatement applications filed on over 190,000 properties, and those are just people that are saying like, hey, I think there's something wrong here. that is an extremely low percentage. And then the number of those that turn into appeals is like less than one half of a percent of all the properties throughout the city. And so those people that have initial concerns, we resolve the vast majority of them within three months, which is the timeline that we have to resolve abatements, again, by state law. And so I honestly do believe that the department

Things can always be improved, models can always be better, and we are constantly working to meet the very high standards that we have set for ourselves and meet and or exceed Murphy.

Thank you very much.

Thank you. So for assessing, the department answered approximately 22,300 taxpayer calls between July of 2025 and April of 2026. What are your average wait times, call abandonment rates, and language access supports? When residents call confused or worried about a tax bill, what metrics tell you whether they actually got the help they needed?

Thank you so much for the question. I don't have the data with me, but I can have my office put together for you.

Those are questions that we could get answers to. Yeah. Yeah. Okay. Awesome. That's it for this one. Thank you.

Okay. Thank you very much. So before we go to a third round, we do have one person on Zoom for public testimony. And then for follow-up questions. Okay, DB, can you hear me? Hello, DB, are you on mute?

All right, how about now?

Yes, I can hear you. So you're here in the chamber. You'll have two minutes to speak just whenever you're ready.

All right, thank you, Councilor, and thank you to the panelists. As you all probably know, the taxation assessment in Boston single-family homes, the building is assessed and the land is assessed. and then put together they equal your taxes. Once a building like let's say a two-family becomes two condos, the land becomes non-taxable. and which maybe sounds good for the city because then you have two units that you can tax, but both units get the full residential exemption. I hope you're still following. And what can happen and what does happen is, I looked up many condos, in Brighton. I live in Brighton. You know, there's a condo. It could be assessed for $400,000 or $450,000.

But once it gets the full residential exemption, the assessment can go down like literally to $50,000, $35,000. And I have screenshots of all of these. And, you know, there's, I don't know, maybe 75,000 residential exemptions, excuse me, owner-owned condos with the residential exemption. which would both increase the equity in terms of taxation and Thank you. Thank you. I think it's a really important issue.

And then last is there are also single family homes that are clearly single family homes. that a developer figured out how to call a group of 10 of them a condo association. And they have huge plots that are also non-taxable and Councilor, I'd be very happy to send you examples of all of these with a narrative that would be more easy to follow than just listening to me speak.

Yeah, yes, please send that along again and thank you very much for your comments and look forward to, you can either email it to ben.weber at boston.gov or to ccc.wm at boston.gov. Okay?

All right. Thanks again.

Okay. Thank you. Bye. Okay. We're going to go for a third round of questions. I'm going to set the timer at three minutes, and we have a fourth round. See about that. Okay. Councilor Flynn.

Thank you, Mr. Chair. Some of my questions were this morning were going to be focused To ask specifically the CFO questions to get her thoughts on some issues that I was focused on. But do we know why the CFO is not here today? Is there someone from her particular department?

We all work in departments within her cabinet. Okay, but no one directly? No, none of us work in the actual finance office on the sixth floor. Okay.

I think the purpose of today's hearing is to hear from these departments.

No, I understand that, but my comments or questions was asking about some issues like revenue. Thank you. Thank you. But we don't have that, Mr. Chair. Is that accurate? We're not having that type of hearing.

Is that accurate? No, although I do believe the CFO will be here tomorrow for our supplemental. That's on the $47 million for the snow removal. Well, it's the supplemental, which we were off on our revenue projections, but yeah, I hear you. If you have any, I mean... No, I know, but I...

I do think it would have been helpful to me, maybe, and to my colleagues as well, to have this Chief Financial Officer here so we can ask specific questions. I won't belabor the point. Ian Dormley. The South Boston Library has been sitting in the budget for a long period of time. No action. Why is that? Is there any short-term plan for the library? Is there any long-term plan from the library? It's one of the oldest libraries in the city, as you know.

Yeah, so that one's similar to the North End Library. We have some state of good repair work that we're planning on doing over the next few years. I believe that one is around its HVAC system to make sure that it can be Still doing heating and cooling sufficiently. In terms of a longer term plan for the library, I think we've heard from the BPL that the library is, for their needs right now, It's an old library.

It's one of the oldest in the city. and I want to advocate for the residents of South Boston, the Fort Point, the South Boston Waterfront, but they're asking for a library and it just seems that We're not going to get it, at least for the next three years, maybe after that. So the money will just sit in that budget, in the budget books until You know, maybe four years from now until someone wants to take leadership on it, but is that accurate to say?

I mean, I think it's accurate that we don't have right now a short-term plan for a larger project, but we do have a short-term plan for needed investment in the facility.

Okay, and I just wanted to highlight one other issue is when we voted down When we had the opportunity to vote down the budget like we did last week, that's when I started on the council, you know, Council Flaherty, Campbell, Wu, and Edwards. You'd vote down the budget and then you'd go back to the city administration and lobby for what you wanted in the budget so you could get it in the budget. We're having a listening session tonight which is good, but the decisions are already made. We had our opportunity to negotiate with the city administration By voting down the budget, like Councilor Wu and Councilor Campbell and myself, Councilor Flaherty, Councilor Edwards, that's when you lobby the city administration. We had a tremendous opportunity to do that. and we decided not to do it.

Now everyone's going to start lobbying for whatever's important for them. and I respect them for lobbying for what's important to their district, but you have more leverage if we voted down the budget and come in as a group, but we didn't want to take that bold leadership. Thank you, Mr. Chair.

Okay, Councillor Brayden.

Thank you. Got my mic back again. A few things. You mentioned that in the 99.1 percent success rate in collecting and that would leave almost like 0.9 percent uncollected taxes So that, like a balance of like 1%, is this about $35 million uncollected, is that correct? I got the numbers right. When you start doing, I'm talking about billions, I lose track of where I'm at. But I'm just also wondering how much do we have out there that's on collected liens across the city? Do we have a number for uncollected liens in total?

Because I know folks have to pay liens when they change ownership of a property, but how much is out there?

I could get the accurate figure for you. So you want the total accounts?

On collected liens, yeah. Just to get a sense of what's there. And then the other question I had was, The Office of Residential Conversion is a great opportunity to build more housing in the city, especially downtown. They have a 75% property tax abatement for up to 29 years. I'm just wondering how much that is costing the city in terms of lost revenue? Sorry, this is a tough question at the end of the day.

that it's not something that we've calculated. So when a property becomes exempt, It decreases the overall property tax base but it doesn't decrease the amount of revenue that we collect because the amount of revenue that we collect is separately calculated by the levy and so it and so it's it's hard to talk about it in terms of like Thank you. Thank you. Thank you. because in essence we're postponing the new growth of that development until that agreement ends and so the city will end up getting new growth from those projects in year 29 when they go back on to the tax rules but that means that there's deferred growth now

The reason that then becomes hard is because, in essence, the reasoning behind this was that without this assistance, these projects wouldn't have happened, and so you can't really Guarantee that you would have gotten the growth because then most likely they wouldn't have been conversions and they would have stayed vacant at

There ends up being like a lot of interconnected things. It's like a big ball of string. It seems like a pretty good deal, though, like 75% of your real estate taxes for 29 years.

It's a very aggressive incentive. But it's gotten results. Okay, that's the main thing.

The other question, I'm taking a liberty here, one question in terms of, I know we've talked before about ISD having access to accurate ownership information so they can Is the assessing department in complete alignment with ISD in terms of that ownership information at this point?

do a lot of work together to try and figure out how we can kind of help them with their data and have the best tools available. Assessing data can be a really good start, but kind of going back to the value thing that we were talking about earlier, assessing data is also on this time lag, right? And so our ownership data isn't necessarily who owned the thing today, It's the assessed owner, which is basically who owned it like a year and a half ago. We do do quarterly updates to go along with our bills to try and capture ownership, showing make sure that those are going to the right place. So that doesn't change the assessed owner. It changes this care of address in terms of where the bill gets sent. But that's still only quarterly. It's not day-to-day. We've been having lots of conversations with the ISD to try and figure out how they can use our data to help their process as a baseline.

Do you get regular updates from the Suffolk? County Registry of Deeds about changes of ownership? Do you get that regularly, like monthly?

We do, but for our business process, it's not... Our business process is not to update every single parcel every single day. So for example, right now with vacancies, we currently have two people that are in that Subdivision of Tax Data Administration. And so the objective is to make sure that our data is accurate and up to date as of each quarterly bill, but not like as of each close of business.

Okay. So that's a good argument for getting more staff.

You can always do more with more staff, sure.

Very good. Thank you, Mr.

Chair, for your... Okay, thank you very much.

Councillor Culpepper?

Yeah, and I will just say, Auditor Finn has a 1 o'clock hard stop, so if for some reason you thought you needed more time than this and you had questions to the auditor, now's the time.

Okay, thank you. We've got 20 minutes, so do I get half of that? I wanted to look at the actual overtime expenditures that outpace the budget targets. If you could just get To us those offices that did have those overtime expenditures, you know,

Do you have any specific lines or just any...

All of them.

All of them that are over budget on overtime.

I wanted to ask about capital investments for fiscal year 27. or Roxbury specific, D7. What are your capital investment predictions or decisions that you've already made? Or are there gonna be any?

Yeah, so we definitely have a number of projects in Roxbury and in District 7 that are going to be going. I forget the full list off the top of my head, but if there are any projects in particular You had questions about, happy to speak to them. I wanted to know what they were first. I'm not sure what they are off the top of my head, but I'm happy to send you a list.

Through the chair, please. Go back, Mr. Commissioner, to that $12 million, $21 million that we talked about with regard to the lag in assessments. I think you said that it sold in November 25? It was still under the 24 tax assessment value. And am I right so far? If it sold in November 25, it was still on that 2024 tax assessment.

So it's the, and I just want to make sure that I'm being clear so that we're talking about the same thing. So it's the 26 tax assessment is the most recent assessment. but that's calculated using data from 2024. So you're correct that the data was from 2024. I didn't want to say it was a 24 assessment because then that's actually using data from

So that lag is probably how it looks like there's these underassessments. And so what do you do when you have that kind of lag? with that big of a gap. In this case, it was $8.5 million.

So we're legally not allowed to take that into account for that fiscal year 26 assessment? It will end up factoring into the assessment for fiscal year 27. So because for fiscal year 27, we are looking at The value as of January 1st, 2026, which is using calendar year 25 transactions. And so that sale would be useful for the 27 assessment.

And so for that $8.5 million, It's just a loss to the city?

I would say it's not a loss because it's how the system is designed. And it's not just designed that way for Boston.

But it's gone though between the $12 million and the $21 million. That $8.5 million is not being used for that time until fiscal year 27.

Well, for one thing, the $8.5 million is value, so that doesn't translate into revenue.

But we want it to, though. At some point, it will, but that won't be until fiscal year 27.

It depends on whether any portion of that would be considered new growth. So it is possible that the value change was because they did work on the property, and so then that's potentially new growth. If the value change is just market appreciation or just because we have bad data, then that's not new growth. And if it's not new growth, it doesn't turn into revenue.

So if it's not new growth, then That $8.5 million is just kind of in cyberspace somewhere.

It basically impacts, so it still exists, and so it impacts the overall value of property in the city.

But we don't collect on it.

We don't collect... It's not extra money we collect. What happens is it gets built into the calculation that determines the tax rate. And so 8.5 million isn't enough to move the tax rate. But let's say it was 8 billion. then that would basically lower the tax rate for everyone across the board. Well, if everything added up, it could be a billion. Yeah, no, and it does, it adds up, like 100%, like that's how the process works.

And so... Thank you, Mr. Chair. Okay, thanks. One question about excise tax.

I heard a thank you, Mr. Chair.

I did. I thank you. I'll thank you again.

Would you like a follow-up question?

No, no, we're going to have a hearing soon on assessment. No, thank you. Thank all of you. For your answer, I've got a lot more questions, but thank you. Thank you for the good information. Thank you.

Thank you very much. I just, and I don't know if, Councilor Brayton, do you have? Okay, I guess just as your, all the wisdom, you know, Commissioner Arnella, that you've gained in this job and You mentioned abatements. I'm assuming when somebody's property is undervalued, they're not filing an abatement, right? Under-assessed.

They don't tend to complain as loudly.

Yeah, yeah. But so I mean in terms of like the whole system obviously it's a big system and there's gonna be assessments that are off for various reasons and like you know going forward Do you feel like we're at the place we need to be? Do you feel like we need to fix the under-assessments, more over-assessments? What would you like to see?

Thank you so much for the question. I appreciate it. I think that this feels so self-serving. I legitimately think that the department does a really, really good job with this Herculean task of valuing every property in the city every single year with the staff and resources that we have. There's always room for improvement. And we know that. And we are always looking for new ways to make things better and to fix problems. We are not complacent, and my staff is not complacent, and I am not the staff. So whether I am there or not, these things will continue. and the efforts will continue to improve. We definitely pay attention when complaints are raised by the public.

Council, people that call in and tell us that there's something wrong we go and look at those properties and then we don't just look at those properties we look at those areas and neighborhoods right so we're not um so For example, if there's a sale that's wildly off, we're not just looking at that one property and changing that one property's assessment. We're looking at other like properties to make sure that we are treating all of those things. And if there's a mistake, we're correcting it More broadly, and not just addressing that one issue that brings its head up. And you're 100% correct. The abatement process is to address situations where people feel they are overvalued. It is not something where people tend to come into us and say, hey, my property is dramatically undervalued. It has happened. It's exceedingly rare. But at the same point,

The information we get when people come to us with their concerns about overvalue is also something where we're looking at their property, but also other properties that are similar. And so that is a way that Let's us check and catch errors in both directions.

Okay. Thank you very much. I'm just sorry. Council Breadon and then Council Culpepper.

I just wanted to say thank you and wish you all the best. Thank you so much. Your next chapter, I hope it brings you joy and all that you'd want from it. Thank you for your service. We're going to miss 20 years of service in the City of Boston. It's a significant amount of institutional memory. As you say, you've got great staff, so hopefully they'll be able to I'm not saying you're not indispensable but thank you for your service and it's been great to to work with you over the last six years and also thank you all for your answers this morning and we're continuing to learn and Thank you, Councillor Culpepper.

You know, we have that hearing on a tax assessment on Monday, June 8th at 2. Will you still be here or will you be gone?

Unfortunately, June 8th, I'm going to be out of the country, but I do have staff that know stuff as well. So I fully hope that someone will be able to help you.

No, no, enjoy your trip. I just want to try and look at what's going on to see what kind of fixes may be possible. You're going to be gone, having a good time, enjoy your vacation. There may be questions when you get back.

I understand. Your questions are good ones. The things that you're concerned about, we're very much concerned about.

All that knowledge you have, someone's really going to benefit in a great way. But good luck and I'll see the rest of you real soon. Thank you.

Okay, again, thank you very much for your testimony and for being here today and helping us. This is the last of our departmental budget hearings. I want to thank all my colleagues for Showing up, you know, honestly, it's fitting both of you are here. You've been probably in every single departmental hearing and asked great questions. I just want to thank central staff, you know, Karishma. Thank you for getting us through this process. And I know now the tough work starts. Actually, the hard part is after this for us. So I look forward to I'm sitting down with my colleagues and hammering out something that we can all stand by. So again, thank you very much and thank you to everyone. This hearing and these budget hearings, with the exception of tonight, Now adjourned.