Mayor submits FY27 municipal budget proposal of $240.3M to City Council

Budget cuts include approximately 32 jobs citywide, including all Malden Police cadets, five firefighters and 14 full-time positions across city government

 

By Steve Freker

 

Malden Mayor Gary Christenson formally submitted the Fiscal Year 2027 municipal budget proposal to the City Council Tuesday evening at a Committee of the Whole meeting held in the Council Chamber at City Hall. Accompanied by a transmittal letter, the budget appropriation was the ominous, proverbial “other shoe to drop,” as the numbers include cuts necessary to cover a near $10 million structural deficit. (The complete text of Mayor Christenson’s FY27 budget transmittal letter to the City Council is included in today’s Advocate.)

Included among the cuts are the elimination of approximately 32 full- or part-time jobs across city government, including cuts in the ranks of the Malden Police Department and Fire Department, as well as across most municipal departments. The FY27 proposal is for $240.3 million, which represents a meager 1.8% increase over last year’s FY26 figure of $236.1 million.

In his transmittal letter, Mayor Christenson stressed that while this year’s budget proposal is a level-funded budget from the previous fiscal year, it still imposes a near $10 million structural budget deficit. “A level service budget, defined as continuing current service levels and meeting contractual and expected obligations, yielded an almost $10 million structural deficit,” Mayor Christenson stated in his transmittal letter to the Council. “It is entirely consistent with the scope of the problem we shared with the City Council and the public during discussions on an override.”

After a five-month campaign by city officials seeking a Proposition 2 1/2 property tax override, Malden voters rejected the proposal in a special election held on March 31. The override bid was defeated by just 124 votes, a razor-thin 51-49 percent margin on a day when the turnout mirrored recent city elections, just 15 percent of registered voters. The so-called “other shoe” dropped on Tuesday, in the form of the unveiling of the city budget for the first time.

In his letter, the Mayor detailed how the FY27 proposal addresses the nearly $10 million deficit, as state law mandates cities and towns submit a balanced budget by a June 30 deadline. “As a result, this budget proposes cuts totaling approximately $4.5 million. To fund the gap, I am proposing that $5.2 million be used from our reserves. It is not enough to put us on a sustainable path but it is a start,” the Mayor added.

Malden’s cash reserves — often called by the misnomer “free cash”— are also sometimes referred to as the “rainy day” fund. In the FY26 budget last year, Malden also used $5.2 in free cash to cover some of the budget. “Free cash” is essentially the city’s savings account and is looked at closely when determining credit ratings and is crucial in establishing interest rates for municipal borrowing.

 

Approximately $4.5 million & 32 jobs projected to be cut for Malden for FY27

The approximately $4.5 million in municipal budget cuts for FY27 are primarily in the form of the elimination of some 32 full- and part-time jobs. Included are the following:

• Public Safety/Police — elimination of three open positions (Police Officers); elimination of all five Cadet positions ($575,000)
• Public Safety/Fire — elimination of five positions (Firefighters, $550,000)
• Library — elimination of one position (Custodian, $75,000)
• Department of Public Works — elimination of the open Assistant Director position ($130,000)
• Restructuring of Boards/Commissions — reducing pay for most boards/commissions; additionally, proposing to reduce the size of three boards/commissions ($80,000)
• Operational Budget Cuts/Enhancements — includes one recommendation for revenue enhancement on commercial permit fees ($600,000)
• Elimination of FY27 Cost of Living Adjustment (COLA) increases — across all open contracts; will propose 0% increase for open union contracts for FY27 ($1.1 million)
• Operational Budget Cuts — various operational line item reductions as outlined in the departmental-level budgets
• General Government — elimination of 17 positions across all area of government, specifically:

ASSESSORS: Eliminate funding for 1.0 Full-Time clerk position.

CEMETERY: Eliminate funding for 1.0 Full-Time clerk position.

CITY CLERK: Reduce by 80% funding for a contracted employee.

ENGINEERING: Shift funding for part-time employees to a grant.

HEALTH: Eliminate funding for 1.0 Full-Time Clerk, 1.0 Full-Time Language Access Coordinator and a PT (10 hr.) Nurse.

INFORMATION TECH: Eliminate funding for 1.0 Assistant Director position.

INSPECTIONAL SERVICES: Eliminate funding for .50 FTE Clerk and 1.0 Full-Time Rehab. Specialist.

LEGAL: Reduction in hours for two PT Asst. City Solicitors and Special Counsel.

OSPCD: Eliminate funding for 1.0 Planning and Development Specialists.

PARKING: Eliminate funding for 1.0 Director/CSO (Eff. 1/1/27).

PUBLIC FACILITIES: Eliminate funding for 1.0 Full-Time clerk position.

RECREATION: Eliminate funding for two Part-Time positions.

SENIOR CENTER: Eliminate funding for 1.0 Full-Time clerk position.

TEEN CENTER: Eliminate funding for 1.0 Full-Time clerk position.

TREASURER: Eliminate funding for 1.0 Full-Time clerk position.

VETERANS: Eliminate funding for 1.0 Full-Time clerk position; convert coordinator to 20 hrs. a week

 

Funding for Education is proposed for $106.5 million in FY27

The budget appropriation proposal for Education, and its largest appropriation — $102.1 million for the Malden Public Schools — for FY27 is $106.5 million, which represents an increase of $4.96 million from the previous FY26 year, or approximately 4.3%. Education funding in the proposed budget is comprised of three components. Funding for the Malden Public Schools makes up the largest portion of education spending ($102.1 million, increase of 3.5% from FY26).

The proposed funding is targeted to fund the required increase in net school spending, although health insurance makes this even more of a variable than in prior years. This change takes into account increases in spending in other areas that are part of the equation. Other increases include Malden’s mandated payments to other districts, such as Northeast Vocational, a combination of increases in both the anticipated hike in population of Malden students at the school for the 2026-2027 school year and this city’s share of the debt service for the construction of the Northeast high school building, a $340 million, state-of-the-art building.

Set to open in September, the number of students the new school can serve catapults to 1,600 from the 1,350 enrollment at present. Right now, about 150 Malden residents are students. An additional 60-70 Malden high school-age students are expected to be granted admission for this fall’s freshman class, as Malden payments to Northeast increase commensurately.

 

Council Finance Committee meetings, Public Hearing on Final Budget Proposal planned

Malden Councillor At Large Carey McDonald serves as chairperson of the Finance Committee, and he announced that a number of those subcommittee meetings will be planned and held, to discuss details of the FY27 budget proposal. “We only have painful and bad choices with this budget process,” Councillor McDonald said.

“We are forced to make significant use of reserves and will see significant cuts,” he said at Tuesday’s meeting. “I hope we bring our best and most constructive approach to this process.”

“This [process] is not going to lead to full budget stability,” McDonald added. “It will be ongoing for years. We are facing structural financial issues we will continue to face.”

Mayor Christenson encouraged the entire City Council to participate in the budget review process. “I strongly encourage full Council participation in the Finance [Committee] meetings over the next few weeks,” Mayor Christenson stated. “Although some may be focused on the next mayoral election, this is not a time for politics. We must give all of our attention to this budget process to best support our residents.”

“We have difficult days ahead as we adjust to reductions in staff while recognizing that the worst is not past us,” the Mayor stated in his letter to the Council. “It will take us working together in every way possible to stay focused on the important work that has to be done while finding solutions to put Malden on a sustainable long-term path.”

 

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Following is the text of Malden Mayor Gary Christenson’s formal letter to the members of the City Council accompanying the proposed FY27 municipal appropriation.

 

Dear Members of the City Council,

I present the Fiscal Year 2027 budget for your review and consideration. With this budget, we begin a multi-year effort to reduce expenses to bring them in line with available revenues. I have covered in prior year budget messages the challenges that we face that are unique to Malden so I won’t repeat them here. Those, combined with challenges that are common in many other cities, find us in a situation that is forcing a change in how we deliver services. As a largely developed urban city with limited highway access and a heavy focus on residential use, the opportunities for large-scale transformational development are virtually non-existent and, as such, we are overly reliant upon property tax revenue growth to fund ongoing cost increases.

That fact, when combined with the unparalleled pressure applied to Malden from the inequities in the school funding formula (Chapter 70), leave us with few options. We know our residents are feeling the same pressure in their daily lives.

A level service budget, defined as continuing current service levels and meeting contractual and expected obligations, yielded an almost $10 million structural deficit. It is entirely consistent with the scope of the problem we shared with the City Council and the public during discussions on an override. As a result, this budget proposes cuts totaling approximately $4.5 million. To fund the gap, I am proposing that $5.2 million be used from our reserves. It is not enough to put us on a sustainable path but it is a start.

We will need to continue to work together to solve this ongoing challenge in whatever way possible, which will include additional cuts in future years if nothing changes.

The proposed cuts are impactful and have an underlying theme of doing more with less. While I leaned heavily toward cuts of open positions that we have purposefully not filled the past few months in anticipation of this exercise, the reality is that with this budget, there are people losing jobs and as Mayor, the impact on personnel and service levels is not to be understated.

That will leave us having to get creative to deliver services, and there’s little doubt our residents will feel some of that impact. However, I’ve attempted to balance many competing needs while prioritizing things that remain important to me even in tough times. It’s important to keep in mind that exercises that involve reductions in personnel have expenses associated with the first year before you reach the full-time run rate savings.

Things like unemployment costs, payouts for earned time and the need for transition periods are difficult to predict. While we have made some allowances for those in this budget, it’s likely that future appropriations may be necessary to find costs associated with the proposed reductions. It is also important to note that with most employees being subject to collective bargaining agreements, there is a process that we must follow to comply with labor laws. Those conversations have begun and will continue in parallel with the City Council budget deliberations.

Additionally, there will be required ordinance updates consistent with the changes proposed as part of this budget. Those will likely need to follow immediately after passage.

[In his letter, the Mayor outlined specific proposed cuts of approximately 32 full-time positions — including 10 existing public safety positions and three open, unfilled police officer positions — and 17 full-time positions across city government. See Budget Story, Page One for details.]

On the education front, while FY27 represented the last year of the Student Opportunity Act (SOA) and we anticipated aid more consistent with prior-year increases under SOA ($5.8 million for FY26), reductions in enrollment offset any increase in aid to the point that state aid as proposed in the House budget is for the minimum per pupil amount under Chapter 70 FY27, a reduction of about $4.8 million in aid.

Additionally, this year’s budget shows significantly increased costs for anticipated enrollment at NE Regional Voke as they move into a new and larger facility, while at the same time we reach our full run rate on our annual cost from the debt from the building project.

As I’ve communicated previously and extensively, our conversion to the GIC (health insurance plan) is expected to yield savings as compared to had we continued to be self-insured. Those savings are reflected in this budget based upon estimates. It’s important to note that only after enrollment is complete and tallied will we know the actual impact of this initiative.

We have difficult days ahead as we adjust to reductions in staff while recognizing that the worst is not past us. It will take us working together in every way possible to stay focused on the important work that has to be done while finding solutions to put Malden on a sustainable long-term path.

Respectfully submitted,

Mayor Gary Christenson