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1
 ______________________________________________ 
FINAL REPORT TO THE MAYOR 
MAY 8, 2009
CITY OF SOMERVILLE, MASSACHUSETTS 
 ______________________________________________ 
FINANCIAL ADVISORY COMMITTEE 
Ronald Bonney, Jr. Geoffrey L. HargadonDaniel J. RichardsBarry R. Sloane Samuel R. Tyler
 
2
LETTER OF TRANSMITTAL
 
May 8, 2009To the Honorable Joseph A. Curtatone, Mayor:As the members of the City of Somerville’s 2009 Financial Advisory Committee (FAC), we arepleased to present this Final Report, which sets out our recommendations for the long-termfinancial sustainability of the City of Somerville, Massachusetts. We transmit this Report infulfillment of your mandate to us to:
“Establish recommendations on cost-savings and revenue-producing measuresin light of the declining economic conditions and pending reductions in local aidand receipts. Recommendations should promote efficiency, create cost-savings,and enhance revenues.”
Since our Committee first convened in January 2009, we have reviewed a wide range of information about the City of Somerville’s municipal operations. Members of the Committeereviewed workforce and bargaining unit composition, wages and benefits data, and additionalfinancial documentation that included revenue and expenditure trend analysis, annual reports,bond prospectuses, debt and capital schedules, and past municipal budgets. This informationformed the foundation for the recommendations contained in this report. An underlying themeof these recommendations is our strong support for administrative flexibility in both the designand management of all municipal operations.Our key recommendations include the following actions:Health Care Costs:
 
Bring employee health insurance contributions in line with those in surroundingmunicipalities
 
Bring retiree health insurance contributions in line with those in surroundingmunicipalities
 
Adopt M.G.L. Chapter 32B: Section 18; Medicare extension plans with mandatorytransfer of eligible retirees
 
Encourage a move away from an Indemnity Plan while ensuring comparablecoverage through other cost-effective options
 
Issue a Request For Proposals (RFP) for a sole health insurance provider
 
Pursue a broad range of plan design changes with the potential of reducing costswhile maintaining coverage and quality of care
 
Determine and quantify the potential benefits and costs-savings of joining theCommonwealth’s Group Insurance Commission (GIC)
 
Support legislative authorization for cities and towns to have the same administrativeauthority to change plan design as exercised by the Commonwealth since 1955 (plandesign encompasses changes in deductibles and co-pays)
 
Initiate an education program for retirees of the benefits of the HMO plan
 
Work to bring all employee health insurance contribution ratios to a uniform level
 
3User Fees, Permits, Licenses, Fines:
 
Implement across-the-board increases in fees, fines, licenses, and permits to fund ahigher share of the true costs, direct and administrative, of providing city services(cost recovery)
 
Implement city-wide residential permit parking
 
Increase rates and extend hours of operations for metered parking
 
Increase fees for visitor and residential parking permits
 
Increase fines for parking violationsCompetitive Sourcing:
 
Determine and pursue internal opportunities for competitive sourcing between cityemployees and private vendors
 
Explore feasibility of competitive sourcing for services now provided by privatevendorsRegionalization of Services:
 
Determine and pursue regionalization opportunities with other communities and theMetropolitan Mayors Coalition
 
Explore options for group purchasing (interagency and intercommunity) to achievecost savingsIndirect Cost Recovery:
 
Implement indirect cost methodology for Water and Sewer Enterprise Funds. (Futureconsideration should include indirect cost recovery for external grants and the SchoolDepartment.)Wages and Salaries:
 
Implement salary freezes for non-union and union employees, including schoolemployees to prevent layoffs and reduce expenditures
 
Implement furlough options with non-union and union employees, including schoolemployees to prevent layoff and reduce expendituresPay-As-You-Throw (PAYT) Trash Disposal and Single Stream Recycling:
 
Pursue PAYT and single stream recycling in Somerville to achieve environmentaland economic benefitsCapital Asset Options:
 
Sell the Powderhouse School to assist in financing future capital projects
 
Incorporate economic factors and quantification of long-term development potentialinto the City’s future capital assets sale/lease plansRezoning Business Districts:
 
Continue to prioritize rezoning and up-zoning of business districts to encouragecommercial development and economic activity
 
Technological Efficiencies:
 
 
Pursue technological solutions that lead to efficiencies and cost savings
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