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Fall River forecasts $3.2M FY26 shortfall; council transfers $2.5M to city health trust
Summary
CFO Bridget Owen told the Council Committee on Finance that a five-year projection shows a $3.2 million gap in fiscal 2026 and continued pressure from debt and rising health claims; the full council voted to transfer $2.5 million from surplus to the Employer Health Trust Fund.
Bridget Owen, Fall River chief financial officer and director of financial services, told the Council Committee on Finance on Jan. 28 that the city’s five-year projection shows a gap of about $3.2 million in fiscal 2026 and rising uncertainty in future years.
Owen said the forecast assumes property-tax growth limited by Proposition 2 1/2, $1.5 million in “new growth,” and modest state-aid increases; it also incorporates the approved debt exclusion for the new high school and the Diamond debt amortization schedule. “The stabilization fund is just over $17,000,000,” Owen said, and “there is no assumption to use any stabilization funds to balance the budget,” though investment income from that fund was planned for small capital needs.
Owen and City Administrator Seth Aiken warned that health-insurance claims and workforce growth are driving pressures. The administration projected health-insurance cost increases and reported 87 new health plans added recently, largely from the school department, and said Gallagher (the city’s consultant) would deliver further projections in February. “Health insurance has been stable for some time,” Owen said, “but claims have been much higher” in 2024.
As a near-term step, the council adopted a transfer moving $2,500,000 from fiscal-year 2024 surplus revenue into the Employer Health Trust Fund. The transfer was introduced under chapter 44, section 32 of the Massachusetts General Laws and was adopted by the full council during the same meeting.
Councilors asked for additional detail on assumptions and debt schedules, especially the Diamond assessment. Owen cited the Diamond amortization schedule showing a $3.3 million payment in FY26 and warned the assessment rises thereafter. Owen and Aiken said forecasts are conservative and noted large uncertainties — federal funding pauses announced in Washington and volatile markets are among the risks.
The administration also told councilors it would circulate the fiscal assumptions and amortization schedules requested during the meeting and that the FY26 budget kickoff for departments would begin the week of Feb. 10.
Votes at the meeting included the council’s adoption of the $2.5 million transfer to the Employer Health Trust Fund.
The administration said the five-year projection will be refined as new state and federal budget guidance arrives and as department-level budget submissions are analyzed.
