Medford facing $1.8M deficit, schools seeking $94M for budget

The city of Medford is facing an approximate $1.8 million deficit in the fiscal year 2027 budget. And that doesn’t even account for an additional $5 million request from the School Department to cover all its legal obligations.

The City Council and School Committee met in a joint session on April 8 with city officials, including Chief Financial Officer Bob Dickinson, Chief of Staff Nina Nazarian, and Mayor Breanna Lungo-Koehn, to discuss the problems facing the FY27 budget.

Dickinson said the city budget is approximately $217,887,492.59, a difference of a little over $12 million from fiscal year 2026. The schools are requesting $94 million, up almost $10 million, due to a number of unforeseen issues.

Dickinson said the city already has to cover a $1.1-million gap in the general fund, and department heads are being asked to make reductions.

Lungo-Koehn added there also gaps in the Medford Family Network’s account due to a slashing of federal funds ($240,000), in funding for non-union employee raises ($200,000), and an annual 2.75%-3% increase to the school budget ($300,000).

“That 2.75% or even 3% is not going to be enough to meet our obligations in unavoidable costs that we’re carrying into ’27,” said School Committee Vice Chair Jenny Graham, requesting councilors and others watch the school budget presentation on April 6. “It’s a confluence of events.”

Council President Zac Bears said there is a possibility of more money, given that the city has underestimated its local receipts by $3-$7 million each year for the last four or five budget cycles.

“It would be helpful if we have the projection for FY26,” Bears said. “It could be off a significant amount.”

Either way, Bears said, Medford is actually facing between $1.8 million and $5.8 million in deficit.

Lungo-Koehn said local receipts are on the list of possible sources of additional revenue, but the city is still facing a tough budget year. She said this is the final year of COVID funds from ARPA, which will need to be completely used up by December. After that, the city will be forced to absorb the cost of what those funds were paying for, which are five positions hired during the pandemic.

Plus there’s uncertainty around insurance costs, which are estimated to be going up 10% this year, although Dickinson said the city’s projections are within $100,000 up or down.

“But now you’re looking at an additional $5 million, if we’re including the school side,” Bears said of the deficit.

School Committee member Erika Reinfeld asked just how the city will decide what goes or what stays in the budget.

“Essentially, what are the priorities for this budget?” she asked. “What guiding principles are we trying to meet?”

Lungo-Koehn said the priority is to balance the budget. She added she has always  made the schools a priority for the city, as well.

“We’re trying to keep a balance,” the mayor said. “We have all sorts of priorities, like balancing the budget without making cuts, and dealing with high increases, all within 2.5%.”

Nazarian said the city’s staff has worked hard to find creative solutions to a number of issues over the years.

“We are constantly having conversations to find creative solutions to move the mission forward,” she said.

Bears said it’s obvious the overrides that passed a few years ago haven’t been enough to solve the city’s financial issues.

“All comparable cities to us are facing issues unless you’re Cambridge or Waltham,” Bears said. “It’s not an easy fiscal year for municipalities in this moment, what with federal state aid cuts and the impacts of high inflation on municipal budgets.”

Bears added the average taxpayer is also facing high costs and making difficult decisions in their own daily lives. It should come as no surprise then, he said, if residents hear the city is in the same boat.

Bears said there have been communications coming from City Hall saying, “Hey, we’re going to have to make some really hard decisions, we’re not  going to be able to fund new programs.”

“For me, the thing that I heard when we said what are the values underlining the city side of the budget…a balanced budget is a goal, not a value,” Bears continued, adding he is looking to understand what’s staying and what’s going and what priorities are pushing those decisions. “We need to get better at articulating the values that prioritize our decisions in the city budget.”

But what about the schools?

Despite two hours of discussion among city officials, no decisions were made regarding either the $1.8 deficit, although the administration is working to eliminate the gap, or the $5 million being asked for by the School Department.

But during the School Committee meeting on April 6, school officials were presented with the preliminary FY27 school budget, which came in at a whopping $94 million.

Director of Finance Noel Velez and Budget Analyst Gerry McCue were back before the body to discuss the issues facing the budget, including more than $3 million in salary and step increases and $3 million in unavoidable costs, such as absorbing additional positions into the budget and increases in utilities, among a long list of costs.

There were also requests for $987,172 for school-based spending for high quality instructional materials and additional teaching support and for $554,255 in new or increased facilities and operations spending for contracted maintenance services and additional maintenance workers.

Although the schools have identified approximately $490,000 in savings, the overall budget number comes to $94,032,696 million.

Superintendent Dr. Suzanne Galusi said those numbers are all based on the extensive collaborative meetings between school administrators, department heads, directors, and principals.

A total of 57 meetings in all, said McCue.

“Tonight’s presentation is a testament to the consistency and coherence we are working to establish as through lines across every level of the district,” Galusi said. “We’re moving towards a unified vision that ensures every dollar supports our shared educational goals.”

During the long presentation by McCue and Velez, Lungo-Koehn interrupted to ask just what the percentage increase was from FY26 to FY27 in the school budget.

At McCue’s response of 9%, the mayor asked if this was just wish list items.

“It’s not wish list,” McCue said. “We have identified the costs, and these costs are bottom line. That bottom line is collaborative bargaining and special education costs, although there is some wiggle room to push off some items to [fiscal year 2028]. We’ve pretty much screened out the spending we thought were little more than a wish list than actual need.”

McCue also suggested there are options to lower the final budget number, such as deferred maintenance or pushing back certain purchases.

The mayor, however, said “the money is just not there.”

While McCue said this is just a preliminary budget and a starting point, Galusi said this request “aligns to our instructional vision, our strategic initiatives and our core values.” But, she too said there’s still a lot of refining to do.

Lungo-Koehn brought the issue down to basics.

“This budget is $5 million off,” the mayor said. “I’d have to wipe out half the city departments to pay for this. I don’t know which one you want me to get rid of.”

Members of the School Committee, however, said there was still a ways to go before a final budget is presented. And, Paul Ruseau reminded everyone this was a process the body itself voted for and approved and needs to see through to the end.

“This process is what we vetted and approved in 2024, specifically so the public would know what we, as a body, believe it would cost to perform the duty that we’re elected to perform and the professionals we hired to execute on,” Ruseau said. “I agree it’s awkward, but we have to tell the public the truth.”

Graham agreed, saying the “one thing Medford is seeing and feeling right now is that transparency comes with discomfort.”

“It’s easier to just be mad about someone doing something behind closed doors than to have to sit in the discomfort of ‘We don’t have that answer just yet,’” she said. “That’s uncomfortable for people, and I fully get that. I think it allows people to engage with the process in a completely different way, and I think we’re all better for that.”

While the School Committee made no final decisions on the budget on April 6, a final budget presentation by McCue and Velez is due at the end of the month.

The School Committee is expected to meet again on Wednesday, April 29, online only. Click here for scheduled meeting times and for an agenda.