State of the City Address
The public is invited to observe at the upcoming Special City Council Meeting scheduled for Tuesday, May 13, 6pm where I, Mayor Joshua A. Garcia, will be delivering the proposed FY26 City Budget and sharing the State of the City Address.
Mayor’s Budget Narrative
The proposed FY26 City of Holyoke budget reflects current revenue and expenditure projections and a balanced consideration of the City’s municipal service needs. Revenue assumptions are based on the Senate Ways and Means budget and are subject to change pending final decisions by the Governor and Legislature. The City continues to take a conservative approach to forecasting, including cautious estimates of local receipts and unrealized new growth, which may result in greater-than-expected excess capacity. This strategy allows for fiscal flexibility in the face of economic uncertainty.
While we anticipate moderate growth in local revenues, our ability to raise funds is structurally constrained by Proposition 2½, which limits the tax levy regardless of inflationary or economic pressures. As a result, the proposed FY26 budget is balanced through conservative financial management, selective reductions of mostly unfilled full-time equivalent (FTE) positions, and targeted increases in priority areas. This approach avoids the need for a Proposition 2½ override, preserves core municipal services, and does not rely on reserves or Free Cash.
We recognize that the budget is a dynamic instrument, with state aid and other revenue updates occurring throughout the year. As we approach the close of both the fiscal and calendar years, additional adjustments may be necessary to refine our revenue assumptions and align resources with evolving service demands.
Key Cost Drivers
- Education: The City’s required local contribution to the public schools will rise by 5.87% ($773,886), in accordance with the Student Opportunity Act, bringing the total to $13,957,634. After all offsets, the City’s net cost will increase by 5.23%,or $1,187,772.37, totaling $23,888,559.71.
- Transportation: Costs continue to escalate, increasing by 10.32% ($1,195,465) for a total of$12,783,451.
- Health Insurance: Premiums will rise by 9%, or $661,859, totaling $13,746,739.
- Pensions: The Retirement Board’s accelerated funding schedule, targeting full funding by 2032, requires a 4.65% increase ($584,545), bringing the retirement appropriation to $13,147,588. Roughly $8 million of which keeps the city on schedule for fully funding retirement by 2032.
ARPA Policy
While some have advocated for using American Rescue Plan Act (ARPA) funds to address budget gaps, it is important to reaffirm that ARPA funds are not intended for ongoing operational costs. We successfully eliminated ARPA dependency in the current fiscal year and remain committed to funding operations through annual appropriations.
Acknowledgements
Our progress is due in large part to the City Council’s partnership. Their support for initiatives that promote sustainable service delivery has been invaluable. While federal and state actions continue to affect local finances, we must remain vigilant and willing to make difficult but necessary decisions. Whatever budget is ultimately adopted by the City Council, we will work within those limits to serve our community.
Lastly, I want to thank the city staff and municipal boards and committees for their thoughtful oversight of their respective functions and their guidance. I am proud of the progress we have made and confident in our shared commitment to Holyoke’s future.
Summary of Notable Budget Changes
In this budget, notable changes include but are not limited to:
- Increases in salaries throughout the budget per negotiated union contracts.
- 2% COLA increases for non-union employees reflected in the Schedule A of the City Ordinances, and salary adjustments in the Legal Department, Personnel Department, Assessor’s Department, and the Auditor’s Department.
- Retirement: Board demanding an increase of 4.65% or $584,545. Totaling our retirement budget at $13,147,588.
- Schools: local contribution to the schools increased by 5.23% or $1,187,772.37. Totaling a net city cost of $23,888,559.71.
- Health insurance– 9% increase or $661,859. Totaling $13,746,739.
- Debt Service: decrease by $325,000.
-
- one administrative assistant level FTE position in the City Clerk Office.
- one administrative assistant level FTE position in the Office and Planning and Economic Development.
- one administrative assistant level .5 FTE position at the Building Department.
- three FTE HMEO positions at the DPW.
- two FTE Park Maintenance positions at the DPW.
- two Building Maintenance positions.
- two FTE Tree Climber positions at the DPW.
- three FTE Patrol Officer positions at the Police Department.
- one FTE Deputy Chief position at the Fire Department.
- one FTE Investigator position at the Veteran’s Services Department.
- one FTE Administrative Assistant at the Assessor’s Office.A reduction of FTE’s at several departments – note: most of these are unfilled positions and positions that are filled, there are other open positions that existing employees can pursue if interested:
- Mayor’s Budget:
- $50,000 in contracted services line to give mayor flexibility to engage specialized services as-needed. For example, this line was used for finance forecasting consulting services, ambulance feasibility analysis, PILOT analysis, downtown parking study, police chief search, and more.
- A reduction of $3,225 in dues and subscriptions by canceling membership to the U.S. Mayors Association.
- Legal Department: This department budget is reflecting a decrease in total due to a reduced need for outside legal services because of strong in-house capacity.
- Personnel Department: $50,000 for contracted professional services line to continue to fund a consultant assisting with Tyler ERP upgrade.
- Assessor’s Department: Overall budget decrease due to elimination of one FTE Administrative Assistant position.
- IT: An increase in this budget due to the rising cost to maintain the city’s IT infrastructure which includes support management, licenses and software costs, and other IT needs.
- City Clerk: A reduction to the overall department budget due to the cut of the one FTE administrative level position.
- Conservation Department:
- Increasing the part-time Conservation Planner position to full-time. This position has been full-time thanks to a subsidy from a federal grant. However, the grant is no longer available. Therefore, the plan is to sustain the full-time position through appropriation combined with an offset from alternative revenues in the control of the Conservation Commission.
- Eliminated funding for the CT River Channel MarkerProgram because the state will be picking up the cost for FY26.
- OPED: A reduction to the total department budget due to the cut of the one administrative assistant level FTE position.
- Police Department: An increase of 2.97% of the overall police department budget. This budget includes more training for police officers and a reduction of three unfilled FTE patrol officer positions.
- Fire Department:
- An increase of 3.7% and this budget includes a reduction of one FTE Deputy Chief position.
- Added a supervisor of motor vehicles position.
- Building Department
- Added a Demolition Supervisor position of $64,527.
- $20,000 added in the demolition line for proper securement of abandoned buildings as-needed.
- Elimination of the .5 FTE administrative assistant level position.
- Veterans Department:
- Eliminated FTE Investigator position.
- Added $5,000 for contract services to assist with communication strategy for outreach.
- DPW:
- Forestry Division – cut two FTE Tree Climber positions and redeployed funds to contract forestry services.
- Engineer Division -increased professional engineering contract line to supplement engineering needs for critical infrastructure projects.
- City Properties–
- eliminated FTE building maintenance position.
- Increased funding for building and maintenance capital needs for all municipal buildings.
- Highway Division–
- Eliminated two vacant FTE HMEO positions.
- Increased repair and maintenance of streets and fixture line items.
- Nearly level funded overall division budget from current fiscal year.
- Equipment and Maintenance – increased repair and maintenance of vehicles line item.
- Refuse Collection –
- Eliminated one FTE HMEO position.
- Increased hazardous waste collection line and landfill contract line.
- Parking Decks – added $81,000 for security contract to monitor the parking garages and parking decks.
- Parks Division –
- Eliminated one FTE HMEO position.
- Eliminated one FTE Maintenance position.
Health Department – significant increase for Animal Control Contract with TJO. Contract recently increased due to several years of operating with zero increases to the municipal partners of the regional animal control facility.