By Adam Swift
The city council is set to begin its FY27 budget subcommittee meetings on May 18, according to Council President Roberto Jimenez-Rivera.
On Monday night, City Manager Fidel Maltez officially presented the council with his proposed $272,378,292 operating budget for the coming fiscal year, which begins on July 1.
“The Budget funds City expenditures at $116,129,801 and School Department expenditures at $156,248,491, for a total budget of $272,378,292,” Maltez stated. “The School Department Budget is increasing by 3.55%-a minimal increase to address the revenue loss from an enrollment decline of nearly 350 students. This loss is unprecedented and has a significant effect on our entire community.
“This year our City is increasing our support of Chelsea Public Schools by approximately $4 million,” the city manager continued. “This is the highest contribution above net school spending from any gateway community.”
Maltez said the city is able to contribute this additional funding by utilizing $4,495,000 in reserves to support the budget.
“City expenditures have increased by 4.80%,” Maltez wrote. “This is the lowest annual increase since FY22, which is something we are proud of, particularly when costs outside of our control are so high. In fact, if we remove these costs, our budget would be increasing by only 0.92%.”
In other words, Maltez said the majority of this year’s increase, or 3.88%, are non-negotiable items. These items include things like the cost of regional schools, employee healthcare costs, charter school costs, and several others.
“To put it further in perspective, in FY22, our health insurance costs went up by $25,000,” Maltez said. “This year, health insurance costs are going up by $1,053,545-even after we made difficult health plan decisions and utilized savings in our Healthcare Trust Fund. In FY24, we paid $1.4 Million for Regional Schools; this year we will pay $3.2 Million due to our share of costs of the new Vocational School in Wakefield.”
In the letter to the city council, Maltez highlighted the budget commitments to the fire department.
“Calendar year 2024 was very difficult for our City with an unprecedented 14 large fires,” Maltez said. “In close collaboration with our City Council, we made a strategic decision to expand the capacity of our fire department by adding Engine 4. We have already seen the benefits.”
By adding Engine 4 to the mix, Maltez said the fire department responds to incidents quicker and has reduced the severity of the incidents.
“Chelsea is a city prone to large fires and it is prudent for us to continue with this investment,” Maltez stated. Since FY2024, we have increased the Fire Department staffing from 98 to 108. This is the biggest investment in our Fire Department since receivership.
“We know this historic investment will pay dividends in increasing public safety for our entire community,” Maltez continued. “The City’s overall headcount will increase by three (3) positions in the coming fiscal year. This increase is attributable entirely to the City’s continued investment in the Fire Department as part of a multi-year initiative to expand total department staffing to 108 positions and fully staff Engine 4.”
Absent the investment in public safety, Maltez said the city’s overall staffing level would decrease by one position.
“Just for the public, this is just the cover letter to the budget, we’re about to go into the budget season,” said District 8 Councilor Calvin T. Brown. “I know it is a lot of reading … but it is just a two-page letter in our budget, so if you need to reread this, if you want to see it, you can also get a copy of it online. I just wanted to make sure that the public is aware.”
The budget hearings with city departments have been scheduled for May 18-20, according to Jimenez-Rivera.
“We will also have a separate one with the school department,” he said. “That one, the date is to be determined, we will announce it once we have it.”
As a gateway city, Maltez has stated that the city is facing extreme pressure from escalated fixed costs, contractual obligations, and inflation, all of which he said outpace revenue growth allowed under Proposition 2-½.
“At this moment, we have to be fiscally responsible while keeping the tremendous momentum we have built,” Maltez said. “I deeply appreciate the City Council’s support and dedication, and I look forward to working together as we navigate these challenges.”