1. City of Salem Mayor Kimberley Driscoll

2. Budget Overview $128 million annual operating budget $128 million annual operating budget 50% of revenues supporting Salem’s operating budget are generated by property taxes; 25% from local aid; 25% from other sources, including local revenues 50% of revenues supporting Salem’s operating budget are generated by property taxes; 25% from local aid; 25% from other sources, including local revenues Property taxes at or near levy limit Property taxes at or near levy limit School Department is approximately 42% of operating budget; Employee Benefits 18%; Public Safety 14%; Public Works 6% School Department is approximately 42% of operating budget; Employee Benefits 18%; Public Safety 14%; Public Works 6%

3. Budget Challenges Deep cuts at the state and federal level to cities and towns Health insurance increases Unsustainable pension costs Unfunded mandates Increased demand on service delivery Inflexible collective bargaining agreements

4. Budget Challenges Health Insurance Health Insurance Bid health insurance which has helped control costs Bid health insurance which has helped control costs Joined MIIA/Blue Cross Blue Shield Joined MIIA/Blue Cross Blue Shield Successfully made changes to co-pay structure for 6 out of 7 unions Successfully made changes to co-pay structure for 6 out of 7 unions Acceptance of Section 18D Acceptance of Section 18D 8.5% of overall budget 8.5% of overall budget $10.6 million annually $10.6 million annually

5. Budget Challenges Pensions $8.3 million pension assessment 6.5% of overall operating budget $171 million OPEB Need reforms at state level to control costs for municipalities

6. Managing City Finances Professionalize City finances Regionalization/Collaboration Service consolidation Publicly bid all contracts Privatize service delivery functions New growth and other new revenues

7. Regionalization in Salem Combined purchasing functions with the Town of Swampscott Emergency preparedness and response Salem/Beverly Water Board South Essex Sewerage District

8. Opportunities Public Health Inspectional Services School functions – transportation, SPED, etc. Emergency dispatch General public safety

9. Obstacles Changing status quo is never easy Parochialism Strong sense of community pride Politics

10. Thank you Kimberley Driscoll, Mayor City of Salem, Massachusetts 978 619-5600 kdriscoll@salem.com www.salem.com