Members of the Board of Alderman, School Committee, Department heads and citizens of Melrose,

I am pleased to report to you this evening as the Chief Executive of the City of Melrose that the state of your city and our community is strong. By all accounts, both internally and from outside fiscal evaluators, we have built a sustainable budgetary model and have taken all steps within our authority to protect and secure the viability of this city in challenging times. I wish we could say the same about most of the institutions, both public and private, around us, but I cannot. We are facing historic challenges that this nation has not seen since the 1930’s. We are not simply seeing these brutally hard times at city halls and state capitols, but in every shop and store on Main Streets, in every home, in every church and non-profit, in our medical centers and social service networks. Our challenge will be dramatic. The fiscal 2009 and FY 2010 budget will be reduced by a staggering $1.2 million. These are the largest budgetary reductions to local aid in the history of the Commonwealth of Massachusetts and the largest loss in revenue in the history of Melrose.

Collectively we have worked hard over the past seven years to successfully rebuild a failed budgetary structure in Melrose that had a weak foundation. Time after time, the smallest economic downturn resulted in chaos in our schools and public safety, with dozens of lost services and jobs that had lasting and significant negative effects on property values and the future that we are trying to build for our children. Over the next several months, we will rely on every one of the reforms, consolidations, and revenue streams that we have created over the past 7 years, and we will develop several more over the next few months to get us through these times with our priorities and vision for a better Melrose intact.  I am here tonight to tell each of you with confidence, from the firefighter next door waiting for the next emergency to call in, to the PTO member, to the senior citizen who relies on that hot meal at the senior center, to the college student or job seeker who relies on the public library to be open, to the parent of the diabetic child who relies on the school nurse to be in the office, to the teen in the band or the orchestra, to parent in need of information or intervention because a loved one is addicted to drugs and wants to get better, to the thousands of families this spring who will storm our parks and playing fields with smiles on their faces after this long and miserable winter, that we are going to manage through this crisis as we have successfully done in the past and make the necessary reforms, reductions, and consolidations to preserve these core and vital services and  protect our property values. Let me clear, the state will not dictate the quality of life we realize in Melrose….We WILL…… Will everyone get everything that want? No, and to keep what we have will require more work by all, sacrifices from each of us, and the continued generosity and volunteerism of the citizens of Melrose, but I promise you that we will get through this as a community and we will be successful.

My optimism is not based on political rhetoric but on seven years of fundamental reform and change that has prepared us, as best we can be, for this very day. A day of national and worldwide economic crisis that I hoped I would not have to see again or manage through for a second time in my tenure as Mayor. Like many among us, however, we are the players in events we have not created yet must manage through.

I could stand here and list the cuts and additions but I hope to answer bigger questions tonight. The question tonight is how will this small community that is 96% residential, limited industry, limited new growth, with a multitude of tax exempt property survive and flourish in this the most severe economic environment? Why have we and why will we continue to improve and invest when neighboring communities are regressing? Why are we stronger today to handle this crisis than ever before? There are answers to all of these questions. The answer is what I call the “Melrose Model.” The “Melrose Model” is conservative budgeting, consistent labor relations, ingenuity, controlling fixed costs, responsible development, planning for better times today, knowing that a failing infrastructure equals a failing city,  remembering that the schools are our foundation, providing the biggest tent, and lifting up those among us who need a helping hand. That, my friends, is the Melrose model, and we will not stray from it. 

1.  Prior to 2002, budgeting in Melrose was based on a set of assumed revenue sources that although available from time to time were not guaranteed, could easily fluctuate, and presented a false sense of security and sustainable spending levels. That crashed after 9/11, leaving the city in a multi-million dollar deficit. It took years, but today’s budget is structurally balanced, with conservative revenue assumptions and reciprocal spending levels. One-time money is used for one-time projects and we have managed our debt position so it does not burden this community now or in the future. We begin this challenge in 2009 on sound fiscal footing. To put it simply, the challenge before us is similar to that before every household or business in Melrose. With declining revenue, there must be less spending and different revenue. There must be less spending and different revenue in most departments to balance the budget this fiscal year and in FY 2010.

2.   In 2002, municipal contracts were unsettled, with back wages owed and no accounts set aside to pay. Collectively, we took the proper approach and created a contract stabilization fund. We allocate dollars yearly for unsettled contracts. We have done the responsible thing. Over the past 7 years, we have settled contracts for union and nonunion personnel at 2%. Like many communities, we are not saddled with high raises that we can not afford without layoffs. We have worked cooperatively with union leadership, resulting in a fair and ratified contract with every union in the city except for the Melrose police officers. It is now time for the Patrolman’s and Superior Officer’s unions to join the other 10 municipal and school unions in the City of Melrose and ratify the contract endorsed by their leadership.

3.   During the last crisis, our infrastructure and fleet management were in shambles, adding another strain and inefficiency to operations. Significant portions of the City of Melrose lacked necessary water pressure to fight fires, hydrants did not work, DPW vehicles were falling apart, our fire fleet was 20 years old, we were losing tens of thousands of cubic feet of water through poor pipes and even more to poor inflow and infiltration yet paying the MWRA through the nose, and we averaged over 14 water main breaks a year.  As we enter this crisis, we have made historic improvements to make sure hydrants are operational and are regularly checked, we have a responsible DPW fleet management plan, and we have a solid, well maintained fleet of fire apparatus. Dramatic improvement to water pipes and I&I have resulted in significant reductions in lost water that has reflected positively on our MWRA assessment. In 2007 and 2008 there were fewer than 4 water main breaks, and it is clear that the completed second Ell Pond culvert and associated work has made a miraculous improvement to flood prevention throughout the city. This solid foundation and investment during better times places us in a strong position today.

4.   In 2002, a tax rate that was 96% residential and without substantial new growth was supporting departments that had the ability to generate creative revenues and expand services on their own. This over reliance on an overburdened tax rate caused ballooning deficits and unsustainable service levels. That has changed. Today, Wyoming Cemetery is self sufficient, and we hope to propose a self-funded expansion in future months. I am happy to announce that although we anticipated recreation being 75% self-sufficient in FY 2009, it looks like they will achieve 100% self-sufficiency this fiscal year, and participation is up. Memorial Hall, with its new heating and air conditioning, is well managed and remains rented consistently. We are also seeing increased usage and rentals at the Melrose Performing Arts Center, and the Ripley has been rented for three years by SEEM Collaborative. The Parks Commission has recently entered an exciting partnership with the Melrose Lions and the public schools to staff concessions at high school sporting events to raise money that will go back into high school athletics to keep user fees down and support new programs. That is community ingenuity at its best. The highlight and greatest success story of the ingenuity and creativity of Melrose is the Franklin Early Childhood Center, which opened only five months ago. I am a biased parent of a student, but any parent will tell you that the initial planning, design, communication, curriculum, and implementation of this new facility is a great Melrose success story. We offer a pre K product to every family in this community that in terms of quality and price is second to none, and there is no other suburb in our area that offers a facility dedicated so ably to the needs of these special learners. We should all be very proud of this achievement.

5.   As we begin 2009, we have taken control of spiraling fixed costs, and that will be the difference between challenging reductions that we will see and the all out elimination of basic services and staff that other communities will be going through. After over a year of careful and mutually respectful negotiation, the City of Melrose and its labor unions become one of only 11 municipalities and the first city to join the state’s insurance program, the GIC. This is a great achievement that will benefit our city and staff, and Governor Patrick has used our process as a model for management and labor to reach an agreement that will benefit all, but most importantly taxpayers. Our pension fund is now being managed by PRIT. Although all pension funds have see dramatic losses in 2008 the PRIT fund is clearly the long term solution to a stable and secure pensions system. Recycling education by the volunteer committee, the public schools, and staff have resulted in tonnage going down for the second year in a row by 6% and recycling increasing. The Melrose Energy Commission has brought innovation to energy efficiency that has brought real savings to the middle school and Memorial Hall. A second solar component will be added to the Lincoln School this year! Science teacher Jim DiSantos’ energy efficiency program in the Melrose Public Schools will reach savings of 1 million dollars since the start of the program. The purchase of street lights in the city will save $100,000 by the end of the fiscal year, and maintenance has been improved. All of these initiatives play a critical role in the long-term solvency and progress of this city in good and bad times.

6.   You wouldn’t know that we were in one of the weakest development periods in more than a half century in Massachusetts living in Melrose. From the renewal of several downtown properties, to phase two of Oak Grove Village, to new laws expanding restaurant options, to the rezoning of Washington St. and the proposed Stone Place Mill Project, private investors believe in Melrose and want to do business here. Their confidence creates development that adds revenue outside of the property tax that maintains and enhances the services that secure property values and make Melrose the desirable community that it is. These developments also promote the expansion of affordable housing options. I am particularly proud of the smart growth models that take more cars off the roads and put more people on public transportation. New proposals in 2009 will follow these same models.

In a soft market, real estate agents across Melrose consistently inform me that they remain extremely positive and believe that people across the region are seeing Melrose for the jewel and value that it is and want to be a part of it.

7.   Schools: The people in this room tonight know the strengths and weaknesses of our public schools. We must seek to improve on the weakness at all times, but as a new member of the School Committee and having spent so much time in our schools, I have seen so much strength. Dramatic cuts in aid severely impact our schools, and in the coming weeks the Globe will be filled with story after story of the plight of schools throughout the Commonwealth. Will we be able to make the leaps that would be possible in normal economic times? The honest answer is no. That would be an impossible task, but we can still advance and do better. The public schools are the foundation on which this city is built, and they will move forward. The schools will not only be held harmless, but I will propose a sizable budgetary increase in FY 2010. I will invest in a design team that will focus on Melrose High School to continue the multi year investment to create a premier environment for learning at our flagship school. I know, speaking with my colleagues on the school committee, that my vote and others’ too will be not to increase Kindergarten fees and not to increase sports user fees to balance this budget. You will find few communities that will make that same commitment.

In closing, after seven years of experience leading this community, I have learned that it is “all about the people.” A cliché …yes…but without the hundreds of volunteers, board members, PTO members, Bridge volunteers, school site councils, church groups, fraternal organizations, teen interns, and countless others, where would we be today? We have created a big tent, and all are welcome who wish to serve. I have appointed hundreds of new Melrosians to be part of the decision-making process, and they have given their new community so much in return. I have reappointed people like Ed and Joan Cassidy, Mike Cassavoy, Jim Herrington, and countless others whom this city could never repay for their service. If you call my office willing to serve, I will find a place for you, because this is a city that cares.

No other proof is needed than this year’s emergency fund. If a city is judged by how we lift up those in need, we certainly rank among the most special of places. If you are struggling at home now tonight, please know that nobody in this city needs to go cold or hungry. Call City Hall and we will help you. As social programs are cut at the state and federal levels, we will provide more meals if we have to and feed our citizens. We will provide more rides if we have to get the disabled and elderly to the supermarket. We will fill more oil tanks if we have to. We will continue to find small ways to lessen the burden of fees and taxation on our elderly and families to the best of our ability and to work with families facing tough times. These are tough times for all of us, and we need to help our neighbors. I know that we will help each other in the City of Melrose, and I thank you for allowing me to be a part of it.

Thank you.