Medford school officials: Budget on target so far

Is it too early to talk about the fiscal year 2027 budget? Maybe, but school officials earlier this month were presented with preliminary data about the budget.

Director of Finance Noel Velez and Financial Analyst Gerry McCue were before the School Committee on March 16 not to present the FY27 budget but to give officials an update on the current budget and offer early data for upcoming discussions.

Superintendent Dr. Suzanne Galusi said this was the first presentation in a planned series.

The goal, she said, was to “begin laying a foundation” and having a conversation about some of the “key factors leading to the budget’s development.”

Velez and McCue hit several key factors in the fiscal year 2026 budget and looked at future projects that may affect FY27, including enrollment projections, Chapter 70 state aid, grants, and revolving funds.

Enrollment

Projecting how many kids are coming into the school system starts early, as school officials examine enrollment reports all year long. But it is the Oct. 1 enrollment report that helps in projecting the budget for the next fiscal year.

McCue said the School Department is always looking at kindergarten enrollment.

How do they know how many kids are coming into the system? McCue said it’s all about the number of births in Medford during 2021, the birth year for children entering Kindergarten in September 2026.

That number is 589, down by 110 births from 2020. He said half of these births were used to predict the FY27 Kindergarten enrollment, or an estimated 295 students expected for September 2026.

“We began to see a trend in 2024 that influenced us to think about that we were on kind of an upward trajectory with enrollment, particularly in the lower grades, and that trajectory appears to have peaked off,” McCue said. “For some of our schools, the kindergarten enrollment that we predicted did not materialize so as we do every year, we get a fresh set of enrollment numbers on October 1 and we recalibrate our model to act for that new enrollment.”

Now, the schools look at how many kindergartners will attend what schools. McCue said that, typically, the Brooks School takes up one-third of the total incoming kindergarten class.

He added if you examine each grade across the district, you see higher and lower numbers as classes move up. So, for example, you might see the middle school enrollment trending upward. That’s because there was a large enrollment in the fiscal years 2023 and 2024. Those kids are middle-schoolers now.

Total enrollment for Medford Public Schools in fiscal year 2025 was 4,170. In fiscal year 2026 it was 4,120, and for FY27 it is expected to be 4,073.

“As you can see, total enrollment is trending downward slightly,” McCue added.

McCue said charter school enrollment is stable, but has been trending downwards over the past two years.

“That means more money stays within the district,” McCue said.

School choice enrollment for Essex North Shore Agricultural and Technical School in Danvers, Minuteman Regional High School in Lexington and two virtual schools in Greenfield and East Walpole, which serve grades K-12, are also trending downwards, with 43 students enrolled in 2024 and only 20 in 2026.

McCue said the virtual schools have seen “significant drop-off” as virtual education has fallen out of favor with parents. That means more students are coming back to Medford.

Chapter 70

You might hear the phrase Chapter 70, but not know what that is. According to Massachusetts Department of Elementary and Secondary Education (DESE) website, Chapter 70 “is the major program of state aid to public elementary and secondary schools. In addition to providing state aid to support school operations, it also establishes minimum spending requirements for each school district and minimum requirements for each municipality’s share of school costs.”

That means Medford receives a certain amount of state aid each year:

• FY25: $17,877,796
• FY26: $18,554,446
• FY27 (preliminary): $18,890,896

The difference between the final FY26 number and FY27 preliminary numbers is $336,450.

Velez said the School Department is also required by the state to spend a certain amount of money each year. That’s about $83 million for FY27, up $3.68 million from FY26.

“We are required to spend that money,” Velez said. “To be DESE compliant, we have to show the state that we have met the needs [of the district] and that we have spent all our money properly.”

How it all works

What does all this mean? Medford looks at its enrollment numbers, its spending, and what it needs to make the school system run, like salaries and programs that need to be funded.

That’s the foundation budget, which is looking like $80.1 million for FY27, up by $3.46 million from FY26.

Then the state forks over Chapter 70 funds, grants come in and, of course, Medford is using money from the stabilization fund override to further cover expenses.

That total budget, approximately $83 million for FY27, is what the state demands the district spend over the fiscal year.

Velez said there are so many variables when it comes to budgets and how they are put together.

Take, for example, grants. Medford is putting in for a new Perkins expansion grant for $2.2 million in hopes of funding a new plumbing program.

“We believe that not only can we get enrollment up, but we can keep [vocational] students who are unable to get their first choice in electrical or carpentry shops because they are at full capacity,” Velez explained.

And then there are grants that run out or have been cut, such as the Medford Family Network, which is looking at significant losses because its state money has been reduced. The city will be looking at how it can work with the schools to keep the program alive.

Velez said there are also positions that will need to be transferred from being paid by grants to being picked up by the district.

And, of course, there’s always unexpected things that come up, such as students who need extra services moving into the district during the school year, or salary increases for staff, and a possible 25% increase in utilities.

That’s why Velez and McCue were before the School Committee, to discuss what’s on the horizon for Medford. They are expected to return April 6 for another budget update.

School Committee reactions

Mayor Breanna Lungo-Koehn was first out of the gate with questions. She wanted to know two things: has there been any discussion of higher enrollment due to the coming closure of St. Joseph’s School on High Street, and what is happening with the MFN now.

McCue said the district is already seeing enrollment from St. Joseph’s families for September. He added the district is trying to find out what the current enrollment is at the Catholic school in order to factor those numbers into the district’s projections.

Galusi said Medford schools are definitely receiving requests from every grade level at St. Joseph’s.

Velez added he has met with MFN officials to brainstorm ideas for keeping the program running, whether that means applying for other grants or a reduction in staffing.

“We have to see what the gap is so we can work with the city to keep that program,” Velez said.

Revolving accounts

School Committee members also touched on the deficit in the pool account ($42,869) to revolving accounts and how they operate.

Some of those accounts contain funds that have to be specifically used. For example, the School Lunch account is currently $1,572,067. However, the funds in that account can only be used on items such as maintenance, new equipment or renovations for the lunch program.

Some of the revolving accounts, however, have money that can be taken out to stabilize other accounts that are in deficit.

That did not sit well with School Committee member Paul Ruseau.

“This revolving account approach to things is the most non-transparent thing on Earth,” he said. “It’s isn’t that you all don’t know what is going on, but there’s no budget book to go look at, there’s no end-of-the-year report that will show you this stuff.

“I’m just very obsessed with us getting done with saying one thing and then, you know, just moving the dollars around in the background,” Ruseau continued. “I don’t mean that in the negative. No one is doing anything wrong. It’s just not honest.”

McCue said the schools do everything they can to have the revolving accounts in the black.

“If there’s a deficit in the pool, for example, there are surpluses in other accounts,” he said. “It’s the bottom line.”

The School Committee is expected to meet again on Monday, April 6 in person at City Hall and online, beginning at 6:30 p.m. Velez and McCue are expected to return for round two of budget discussions.