Cambridge Free Cash Certified at $187.7 Million as Manager Seeks $500,000 for Outside Litigation Counsel

The Massachusetts Department of Revenue has certified Cambridge's free cash at $187,654,252, an increase of $3,402,762 over the prior year, according to a request City Manager Yi-An Huang sent to the City Council for its Oct. 19 meeting.

Free cash is the portion of a city's unrestricted funds left over at the end of a fiscal year, including unspent appropriations and revenue that came in above estimates, that the state certifies as available to spend. Cambridge's figure is as of June 30, 2026, and was certified on Sept. 25, according to the manager's letter, City Manager's Agenda item 2026-293.

In that letter, Huang asked the council to appropriate $500,000 from free cash to the Law Department's general fund account for "Other Ordinary Maintenance" to pay for outside counsel. "Funds will be used to support pending litigation for which the Law Department is utilizing outside counsel assistance and expert witnesses," the letter states. "These costs are expected to exceed the Law Department's average costs for outside counsel."

The letter does not identify the litigation, the law firms involved or the number of cases. The money would come from the newly certified free cash, not from the department's existing budget, according to the letter. The Cambridge | Somerville Independent, previewing the meeting, described the item as $500,000 "in support of court cases needing 'outside counsel assistance and expert witnesses.'"

A second request, item 2026-297, would move $335,600 from free cash to the city's Mitigation Revenue Stabilization Fund. During fiscal 2026, the city received that amount from developers "in connection with transportation and other community commitments," the manager wrote. Under state law, mitigation payments must go into the general fund and can be appropriated only after free cash is certified. The transfer "will preserve these revenues for specific future projects," which would require separate council approval, according to the letter. With the transfer, the stabilization fund's balance would be $18,455,563.96.

If both requests are approved, the remaining free cash balance would be $186,818,652, the manager wrote.

A third request, item 2026-295, shows how a delay in the state budget reached the Cambridge Police Department. Huang asked the council to appropriate $125,300 from the state Department of Mental Health's Jail Diversion Program to the police department's grant fund.

"In late June 2026, DMH announced that funding for the FY27 Budget had not been finalized, and so no full year FY27 funding announcements could be made," the letter states. Instead, the department made "interim short-term awards to preserve existing programs until funding decisions were made at the state level." Cambridge had received an interim award of $30,000 to fund its program through September. With the new money, the city's fiscal 2027 award would total $155,300.

The grant pays for the contracted services of one specially trained clinician who responds to mental health calls across the city, according to the letter. "The co-responder clinician rides with police officers in cruisers and responding directly to calls for service where they can help evaluate and make recommendations for care on scene," Huang wrote. The program is meant to help people in a mental health crisis "get the assistance they need rather than directing them into the criminal legal system," and to reduce emergency room visits.

The same agenda listed two other public safety grants: $269,361.95 from the state's 911 department for emergency communications training and a $10,000 grant from the Massachusetts Peace Officer Standards and Training Commission, according to the council's agenda.

City staff also sought $3.4 million for work on the roof of the 80-year-old Cambridgeport School, the Independent reported.

None of the three letters proposes using free cash to reduce the property tax levy, and none describes how the city plans to use the rest of the balance.

The requests came at a meeting dominated by a separate debate over orders exploring divestment from companies "complicit in the genocide, apartheid and occupation of Palestinians," according to the Independent, which reported that officials scheduled a continuation session in case the meeting ran past midnight.

The agenda materials do not record the outcome of the votes, and the city's official minutes for the Oct. 19 meeting had not been posted as of Thursday. A search of local outlets found no reporting on the free cash certification or the delayed mental health grant.