Malden City Council approves expenditure of $300,000 from water-sewer fund to pay legal settlement

City Solicitor and other municipal attorneys endorse expedited route taken by Councillors at regular meeting

By Steve Freker

A civil lawsuit against the City of Malden was expected to be settled this week following a Malden City Council vote approving the expenditure of $300,000 to a private construction company. The City Council, at its January 27 regular meeting, voted 8-2 to fund a legal settlement in a civil suit by an Everett-based company, Tufts Construction Inc., that was first filed in 2021. The vote approved the appropriation of $300,000 from available funds from the Water and Sewer Enterprise Fund retained earnings.

Two Councillors challenged the use of these particular funds to pay the settlement. One Councillor expressed concern if the appropriation from the Water and Sewer Enterprise Fund “was even legal.”

In the suit, Tufts Construction Inc. alleged the city did not pay invoices for construction work the company had previously performed and also that a city official provided negative references to other municipalities, causing financial loss for the company. According to an online report, a mistrial was declared in the case in August 2025 by Judge Adam Hornstine, who reportedly cited “serious misconduct” by an attorney representing the City of Malden regarding alleged references to an unrelated criminal case associated with a Tufts Construction employer.

At the January 27 meeting, upon questioning by Councillors, Malden Special Counsel to the City Solicitor’s Office Mark Rumley advised Councillors to expedite action, so as to avoid the possibility of the plaintiff requesting additional attorneys’ fees. Without the finalization of the settlement agreement, there was also the possibility of a new civil trial and the potential liability of the City of Malden of still more attorneys’ fees.

Rumley explained that the settlement was tentative, not final, as had been inferred by two City Councillors, and that there was a February 10 deadline to finalize it, with payment. “If we cut it too close, the other side [plaintiff’s attorneys] are ready to proceed [to retrial] and can ask for more attorneys’ fees,” Special Counsel Rumley said.

After a lengthy discussion, which touched on the actual tenets of the case and then challenges by two Councillors on where the funds to pay the settlement were coming from, two votes were taken by the City Council.

The first vote, on a motion by Ward 6 Councillor Stephen Winslow, approved suspension of Council docket rules, so that the appropriation could get a vote for possible action at that night’s Council meeting, without being referred to the Finance Committee for further review. The motion to suspend docket rules passed on a 8-2 vote, with Councillors Peg Crowe (Ward 1), Paul Condon (Ward 2), Ari Taylor (Ward 5), Winslow (Ward 6), Chris Simonelli (Ward 7). Michelle Luong (at-Large), Carey McDonald (at-Large) and Council President Amanda Linehan (Ward 3) voting in favor. Voting in opposition were Councillors Ryan O’Malley (Ward 4) and Karen Colón Hayes (at-Large). Councillor McDonald was present virtually at the meeting. Councillor Jadeane Sica (Ward 8) was not present at this meeting.

A second motion, with docket rules officially suspended, offered by Ward 7 Councillor Simonelli, approved the appropriation of the $300,000 from the Water and Sewer Enterprise Fund to pay for the settlement. That vote was 8-2 in favor of the appropriation and went as follows: Councillors Peg Crowe (Ward 1), Paul Condon (Ward 2), Ari Taylor (Ward 5), Winslow (Ward 6), Chris Simonelli (Ward 7), Michelle Luong (at-Large), Carey McDonald (at-Large) and Council President Amanda Linehan (Ward 3) voted in favor. Voting in opposition were Councillors Ryan O’Malley (Ward 4) and Karen Colón Hayes (at-Large). Councillor McDonald was present virtually. Councillor Jadeane Sica (Ward 8) was not present.

Before the vote, Councillor Colón Hayes questioned the appropriateness of the fund from where the payment would be drawn, as did Councillor O’Malley, who requested the Council to pursue a ruling from a state agency before a vote was taken, to ensure the legality of such an expenditure. City Controller Chuck Ranaghan appeared at the meeting and explained that the $300,000 would come from an overall fund of approximately $960,000 “of unappropriated [revenue]” from water and sewer payments from residents.

“I have a hard time voting for this. Why did we not use free cash? What if down the road we have [a need]? Will we have less funding for lead pipe replacement?” Councillor Colón Hayes asked.

According to an online source, municipal “Free Cash” is a certified, unrestricted and nonrecurring revenue source in Massachusetts, representing a municipality’s remaining funds from the previous fiscal year.

Ranaghan said, “No way would this appropriation take away from any planned [or unexpected] work [with water and sewer] projects.”

On questioning from Councillor O’Malley at the meeting, Malden City Solicitor Alicia McNeil said she “had done my own research” on the appropriateness of using water sewer funding for the settlement, including consulting Ranaghan.

Ranaghan reappeared at the Council audience podium and elaborated, restating that since the initial lawsuit was regarding alleged nonpayment for Tufts Construction work on City of Malden lead pipe replacement jobs, then it was wholly appropriate for the settlement funds to be drawn from the water sewer account. “It would be maintaining the identity of the purpose,” City Controller Ranaghan said.

Councillor O’Malley took issue with Solicitor McNeil’s remarks. “So, [McNeil] asked a non-attorney [Ranaghan] about a legal matter. It is totally inappropriate when the City Council is seeking legal advice. That is not a real legal opinion,” Councillor O’Malley said.

“That opinion is not based on law,” Councillor O’Malley added, regarding the use of the water sewer fund to potentially pay the Tufts Construction legal settlement.

Speaking directly to City Solicitor McNeil, Councillor O’Malley asked, “So if a member of our water department took a copper water pipe and decided to murder someone on the job, would we be able to settle the murder case with Water Sewer Enterprise Funds?”

“I’m not going to answer that hypothetical question because there’s a lot of things we would have to evaluate to answer that hypothetical,” Solicitor McNeil said, in reference to the situation Councillor O’Malley described.

“I did consult with our city controller to determine that [Water Sewer Enterprise] was the fund involved with the contract,” Solicitor McNeil said. “For you to say I spoke with the controller to seek legal advice is not accurate. I seek advice with other attorneys in my [City Solicitor’s] office and did my own research and then further research.”

Councillor O’Malley also challenged, “the bulk of the claims was a defamation case.” “This does not pass the smell test.” Earlier in the meeting he referred to the settlement proposal as “a back-door deal.”

“I am not sure where you are getting your information from, but the settlement is not [primarily] for defamation case; that is incorrect,” Solicitor McNeil said.

Special Counsel Rumley then returned to the audience podium and reiterated that the settlement amount closely coincided with the amount of the disputed contract invoice payments Tufts Construction claimed were unpaid. “The settlement is with regards to the actions of Malden to terminate the contract,” Rumley said, “If this case returned to trial and the jury decided against the city, it could be multiple millions of dollars against the city. We would advise [for the city] not to take that risk [and fund the settlement].”