By Barbara Taormina
Over the next 18 years, Malden is scheduled to pay back $90.8 million on loans for schools, roads and other municipal projects and improvements. And next year the city’s total debt could climb to $107.5 million with a $5.2 million bond for road repairs and reconstruction, and a proposed $8 million bond for energy efficiency upgrades to public buildings.
The Finance Committee has been discussing the energy efficiency project for several weeks. Honeywell, the company that wants to do the work, has promised significant savings in energy costs. Still, councillors wanted a look at the city’s debt schedule before voting on the energy upgrades, and this week, City Treasurer Jonathan Davis provided a breakdown of how much the city now owes and how much it will owe if it signs a deal with Honeywell.
“We are in no rush to pass that,” said Finance Committee Chairman Paul Condon, adding that councillors also want to see this year’s budget before borrowing more money.
And Condon and Ward 5 Councillor Barbara Murphy have proposed putting the money the city saves on energy costs into a new stabilization fund so that it isn’t swept into the city’s general fund. That proposal was sent to the Ordinance Committee for review.
As for the money the city has borrowed, Condon said that according to Davis Malden is in the middle of the pack when it comes to municipal debt. Davis told Finance Committee members that some neighboring cities and towns are carrying more debt, while others have borrowed less.
Still, debt service takes a big bite out of the Malden’s annual budget, which for the past several years has been balanced by digging into the city’s reserve funds. This year the city will pay $15.1 million in principal and $2.7 million in interest. But a $6.7 million reimbursement from the Massachusetts School Building Authority (MSBA) will knock the city’s total debt payment down to $11.1 million. Out of this year’s $180 million municipal budget, roughly 6.1 percent went to debt payments.
Next year principal payments will total $12.2 million and interest will be $2.1 million. Another reimbursement from MSBA will bring next year’s debt payments down to $10.7 million. But if the road work and energy upgrades move forward, the total debt payments will be $11.8 million.
In 2020 scheduled debt payments drop to $8.2 million, with $6.4 million due for principal and $1.8 million for interest. But again, if roads and energy upgrades are added in, the city will pay $9.3 million toward its debt.