Special to the Recod
This month’s community message from City Manager Fidel Maltez focuses on the proposed FY27 budget for the city.
Hello, residents of Chelsea. Welcome to Our Community. My name is Fidel Maltez, and I am humbled to serve as your City Manager.
Today, I’m here to speak with you about the City’s Fiscal Year 2027 budget, including what this budget costs, what is driving those costs, and what it means for our community.
The total proposed budget for Fiscal Year 2027 is approximately $272 million dollars. Roughly $116 million for City operations, and more than $156 million for our Schools.
City costs have gone up by 4.8 percent and this increase is driven by several factors —many of which are outside of our control.
For example, to provide health insurance to city and school employees and their families, we are paying over $1 million dollars more than we did last year. Over one million dollars in a single year. To pay for this increase, we made the difficult decision to pull funds from our Healthcare Trust Fund, rather than take money out of the pockets of our hardworking employees. But we fear the cost of healthcare will continue to increase, and we can’t keep taking from our reserves.
Other costs that have increased significantly are our regional school assessment and Charter School costs. We are paying $1.8 million more—in two years—towards the new Northeast Regional Vocational High School in Wakefield. Charter school costs are also going up by $2.6 million this year, compared to $560,000 two years ago.
On top of these costly obligations, inflation is high, I know you feel that, and costs are higher than what feels like ever before. 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 this strategic investment in public safety, the City’s overall staffing level would decrease by one (1) position. Beyond our obligations, like healthcare, and funding these positions, the City’s budget would actually only go up by 0.9%.
Now I need to talk about our schools. Chelsea Public Schools has lost 350 students this past year because federal immigration enforcement has created a climate of fear in communities like ours. Families—our neighbors, our residents, the parents of children who were sitting in Chelsea classrooms—have fled. Some have left the city. Some have left the state. Some have left the country. They did not leave because they wanted to. They left because they were afraid. And their children left with them.
Massachusetts funds our schools based on enrollment. Fewer students means less Chapter 70 aid from the state. Because of the school’s drop in enrollment, we are forecasted to receive “minimum aid” for our schools, resulting in a budget deficit of millions of dollars, forcing us to make difficult decisions.
So this year, the City of Chelsea is stepping in with an additional $4 million contribution to our schools. We are also using nearly $4.5 million in reserves to support the overall budget. But even with our additional contribution, this does not make the School’s budget whole. The gap is too large, and Chelsea is already a leader among our neighbors when it comes to supporting our schools. We currently provide funding 105.6% percent above what the state requires cities and towns to give to our schools. But it’s still not enough to undo the damage that federal immigration enforcement has done to our enrollment, our funding, and our families.
The budget process now moves to the Chelsea City Council, who will hold public hearings so department heads can present their budgets. These hearings are a great opportunity for residents like you to share your thoughts with the Council regarding the City’s budget. After the hearings are complete, the Council will review it, they may amend it, and finally they will vote to adopt the final budget.
Beyond immediate measures, the City is also taking steps to grow our tax base for the long term. One of those steps includes proposed updates to our inclusionary zoning ordinance as one part of a broader strategy to spark new development, support affordable housing production, and generate the revenue our schools and city services depend on. As you know, under Massachusetts’ Proposition 2½, our ability to raise revenue is constrained, which means sustainable growth must come from new development. Following a City Council meeting on March 30, 2026, where we heard clear support for a gradual, balanced change, I’ve submitted a revised ordinance with four targeted updates—the first since 2019—designed to reflect today’s economic realities while honoring our commitment to affordability. We have also committed to producing an annual report to track this policy’s progress going forward.
This year we have worked really hard to bring your voice and input into our budget process. We have held four community sessions on the budget. We have also hosted monthly meetings with residents to discuss any issues they are facing. Our Administration is committed to transparency, accountability and responsiveness. Our budget process continues with the City Council hosting hearings with every department on Monday May 18, Tuesday May 19 and Wednesday May 20.
I will not close tonight by pretending this is anything other than what it is—a hard year, shaped by hard circumstances, many of which were not of our making.
But, what we don’t want, what I don’t want, is financially hard years to become the new normal for Chelsea. We have faced moments like this before, when the pressures were immense and the path forward was not clear. And every single time, Chelsea has moved forward.
Thank you for listening. Thank you for your trust.
May God bless the City of Chelsea. See you next time in Our Community.