Fall River council approves $452.6 million FY2026 budget after extended debate over health-insurance trust, capital and water/sewer charges

The Fall River City Council on June 2025 adopted the fiscal year 2026 appropriation order totaling $452,631,757 after extended discussion about how the city will shore up its employer health-insurance trust fund, cover capital needs and handle an operating-year shift of water and sewer charges.

Councilors pressed Rebecca, the interim chief financial officer, for specifics on a plan to rebuild the employer health-insurance trust to a target of roughly $12,000,000 and on how capital projects would be financed going forward. Rebecca told the council, “the goal is over the next 3 fiscal years, potentially 4 fiscal years, just to get the fund balance up to the 12,000,000 and to then be fully funding each year's appropriation amount with, you know, full budget money, not any one-time money.”

Why it matters: The employer health-insurance trust covers health and life insurance costs for the city and other municipal entities. Councilors said a stable funding plan is essential to avoid recurring shortfalls that could force midyear cuts or one-time fixes that reduce capital spending.

Most important facts first: Rebecca said the administration intends to use a mix of strategies — targeted transfers, portions of certified free cash and higher operating appropriations — to replenish the trust. She described a policy approach that would direct portions of surplus revenue to several reserve uses, saying the current conversations include “10% to OPEB, ... 15% at least to stabilization potentially, and then ... a certain amount of that free cash certification would go towards the healthcare trust fund.” Rebecca also reported a proposed $2,000,000 transfer intended to increase the current fund balance; the administration has placed that transfer for council action on a separate upcoming meeting.

Councilors sought detail about timing and scale. Rebecca acknowledged she could not yet give a fixed annual dollar commitment, saying the approach depends on certified free cash and other revenues; she repeated the three- to four-year timeframe for reaching the $12 million target. Councilors expressed skepticism about relying on one-time money and urged a clearer multi-year schedule.

Capital and one-time funding: Rebecca explained the FY2026 operating budget omits many large capital purchases and that the administration plans to take up to $10,000,000 of debt next year to cover major capital items (fire apparatus, building rehabs, vehicles). She said some smaller capital items remain in the operating budget, but larger replacements and projects will be addressed outside the FY2026 operating appropriation so debt service will begin in a later fiscal year.

Water and sewer enterprise charges: Councilors were sharply critical of a proposal to have the water and sewer enterprise account absorb about $412,648 (described in the meeting as roughly $400,000) of costs that otherwise had been budgeted in the general fund. Rebecca said those enterprise departments used surplus revenue and re-timed some capital purchases to permit covering the charge in FY2026, and characterized the move as a one-year relief while the administration works on interdepartmental indirect-charge agreements. Multiple councilors warned that the shift is not sustainable long-term and described it as “robbing Peter to pay Paul,” saying the arrangement should be resolved before it becomes a recurring practice.

Other budget details: The administration identified $600,000 drawn from the Diamond Stabilization Fund as one-time money included in the appropriation to cover Diamond assessment costs; Rebecca said the office expects the Diamond assessment to be reduced later in the year and that the full $600,000 may not ultimately be needed. The administration also reported using American Rescue Plan Act (ARPA) funds in prior years and noted that recent budget years had used one-time sources that will not recur.

Council action and vote: The council voted to adopt the FY2026 appropriation order in the amount of $452,631,757. The roll call on final adoption recorded a majority in favor (Councilors Skadin, Hart, Kilby, Pereira, Ponte, Raposo, Tif and President Kamara voted yes; Councilor Dionne recorded a no vote). The appropriation order was accepted as amended earlier in the meeting and then approved line item by line item.

What was not decided: Councilors repeatedly asked for a written, enforceable financial policy that would specify how much certified free cash will be allocated to the employer health-insurance trust each year; Rebecca said the administration will draft policy language for future council consideration but did not commit to a fixed annual percentage beyond describing current targets under discussion.

Taper/next steps: Councilors asked for follow-up reporting and for the administration to return with a clearer capital-replacement plan and a written policy for funding the healthcare trust. Rebecca said the office will continue reconciling interdepartmental indirect charges during the audit and will bring transfers and policy drafts back to the council.