Financial future of the city addressed by two key resolutions passed unanimously by City Council

Finance Chair McDonald authors pair of landmark papers steering Council to address critical revenue and funding issues

By Steve Freker

Councillor-at-Large Craig Spadafora has been in his post for all of the past 20 years. He knows a landmark issue when he comes across one. When it comes to finance, revenue and cost management, he doubles down, having been a seasoned professional in the high end of the finance industry for longer than that.

When a pair of resolutions were offered by fellow Malden Councillor-at-Large Carey McDonald at a recent City Council meeting, Councillor Spadafora did not mince any words. “These are the most important issues we must address as City Councillors, and we must work together to find solutions,” Spadafora said. “We have no other choice. The financial future of our city depends on it.”

Councillors McDonald and Spadafora’s colleagues agreed. The Malden City Council unanimously endorsed and passed a pair of papers which outlined a series of far-reaching and intensely topical issues that directly impact the city’s financial status and well-being today – and into the immediate and long-term future.

First-term Councillor McDonald and other Councillors have broached the subject of the city’s present and future financial stability before during this Council term, particularly when various issues have been raised by the city’s Chief Strategy Officer, Ron Hogan, and other top municipal agents, including Mayor Gary Christenson himself. The Council has already created an ad hoc Long-Term Financial Planning & Strategy Committee, which has already met formally and will continue to meet when the Council reconvenes full-time in September.

But McDonald’s resolutions, which were officially signed on as cosponsors by all of the 11 Councillors before their passage, pinpointed exact present and future targets of the Council as it comes to addressing financial stability. “We must address these issues now and work toward actions which will, hopefully, guide us to solutions,” McDonald said.

McDonald has spent the year as chairperson of the Council’s standing Finance Committee and has gotten a front row seat in viewing financial data, mulling strategies – both budgetary and planning – and discussing and researching options when it comes to the city’s financial standing, both present and future. Like Spadafora, who is an executive at nationally based Principal Securities, Inc., first-term Councillor McDonald holds an extensive background in finance and management as present Executive Vice President of the Unitarian Universalist Association, who formerly worked in senior budget and policy roles with both the Ohio Department of Education and the Ohio House of Representatives, before relocating to the greater Boston area about 10 years ago.

One of the resolutions dealt with the fact that Malden’s expenses, especially for new projects and mandates, such as the new Northeast Metro Tech, are mounting, while revenue sources are not rising commensurately. The other referenced the state educational funding formula and the repeated assurances city and state officials say that it is not equitable to Malden’s status as it comes to the residents’ income levels and needs overall.

Both of McDonald’s resolutions passed unanimously. The first reads: “Resolve: That it is the sense of the Malden City Council that the city must develop a plan to increase local revenue in the next 3-5 years to match projected future expenses. In addition to the regular annual inflation of city salaries and costs, currently projected expenses for the city include: capital investments for schools and city facilities; road and sidewalk construction and maintenance; priority projects such as the Malden River Works project and the Cultural Arts Center; pension and pension benefits costs for city staff and retirees; and Malden’s required contribution to the Northeast Metro Tech High School construction project.

“Additionally, increased required local contributions to education remain a significant liability under Massachusetts Chapter 70. Malden should evaluate all possible local income sources to develop clear targets, as well as potential budget-saving measures, to develop clear targets and a plan to meet these needs. This plan should include a strategic approach for using zoning and other tools to promote a sustainable rate of mixed-use development for growth in the commercial and residential tax base. It should also include investigation into new income sources at the local, state, and federal levels.

“The FY 2024 city budget is balanced with the use of one-time federal stimulus funds from the American Rescue Plan (ARPA) and cash reserves. To be fiscally responsible stewards of our city, we must act now to develop a sustainable approach which avoids painful cuts to city staff and services in the future. Sponsors: Carey McDonald, Karen Colon Hayes, Paul Condon, Peg Crowe, Amanda Linehan, Barbara Murphy, Ryan O’Malley, Jadeane Sica, Chris Simonelli, Craig Spadafora, Stephen Winslow.”

The second resolution, also passed unanimously in its final version, reads: “Resolve: That it is the sense of the Malden City Council that it is vital for our city’s future to have a fair requirement for local education funding, one that reflects the city’s true ability to pay as tied to our actual revenue sources. The Massachusetts Student Opportunity Act (SOA), now in its fourth year of implementation, is providing critical resources for the Malden Public Schools to support our students and families.

“We recognize and appreciate the ongoing efforts of Malden’s state delegation in supporting the passage of the SOA and its continued funding for implementation, from which Malden is already seeing substantial benefits. With $9 million in new Chapter 70 state funds for next year, we are grateful to be able to hire new teachers and support staff for our students, who are 74% Black, Indigenous and People of Color, 63% low income, 23% English Language Learners, and 18% students with disabilities.

“However, as the full SOA foundation funding formula is phased in, it is also dramatically raising Malden’s expected contribution to the schools beyond our ability to pay. Next year requires Malden to contribute $3.1 million more in local funding for schools, capturing 85% of the total expected increase in local tax revenue and receipts for the whole city. As a Gateway City, Malden is a high-need, diverse, mixed income city with a large immigrant community. Yet Malden currently has one of the lowest per-capita expenditures of Massachusetts cities on all other non-school services, and our local property taxes are already at the limit allowed by state law.

“As the SOA continues to phase in over the next few years, increases in much-needed education state aid are likely to come with a steep price of requiring Malden to reduce other city services for our residents, such as public health, infrastructure, libraries, parks, and emergency responders. In its 2020 local contribution study, the Massachusetts Department of Elementary and Secondary Education (DESE) noted that the required local contribution calculation is ‘problematic’ and has been almost unchanged since 2007. We thank our state delegation for their support, and call on our state leaders in the legislature, Governor’s office and DESE to fix the required local contribution so that it reflects the ability to pay equitably and accurately for schools and other essential city services, for Malden and all other high-need communities. Sponsors: Carey McDonald, Karen Colon Hayes, Paul Condon, Peg Crowe, Amanda Linehan, Barbara Murphy, Ryan O’Malley, Jadeane Sica, Chris Simonelli, Craig Spadafora, Stephen Winslow.”