The Mayor Presents the FY26 City Budget

This is what cutting $2.1 million from the city side looks like...

If I haven’t yet invited the city residents to take a breathe, I will invite it now. This is a lot. Let’s get into the details…

The mayor presented her proposed FY26 budget to a joint meeting of the city councilors and school committee on Monday, May 5, 2025. To summarize where we are at this moment, the city has a $6.1 million gap in revenue-to-costs. To close this gap (because the city must vote on a balanced budget, it cannot run a deficit), the school committee has created a budget that cuts $4 million from the district, and that will result in 31 teacher positions being eliminated and 5 administrator positions being cut, along with some non-salary services.

A previous article explains why Melrose, and similar cities and towns, have ongoing revenue-to-cost gaps; in other words, how we got here. As the mayor, and many others, have stated, the costs of insurance, benefits, contract negotiations, out-of-district tuition, and transportation have far outpaced the revenue growth, leading to growing, and unsustainable, cost cutting measures to create balanced budgets.

On Monday, Mayor Grigoraitis presented the cuts that will be made on the city side of the ledger. That is, the remaining $2.1 million of cuts to get to the total $6.1 million needed to balance the budget.

She began her discussion by soberly stating that “this is a survival budget.” While Melrose continues to maintain a high bond rating and has a “a strong and stable financial outlook and reputation with lenders,” the budget “is balanced but is not moving us forward.” Rising costs outpace revenues. This budget is Melrose living within its means, meaning that, to do this, it must cut…and cut….and then cut more such that all of us will feel the impact in decreased staffing and reduced, or eliminated, services that most of us have come to expect.

To begin, Melrose is not alone in its financial problems, as I have written about in previous articles. The mayor noted that Milton, a town of similar size and residential tax base to Melrose, is also in a very similar financial situation. They successfully voted to pass a $9 million override last week, which will help the town avoid major cuts for FY26. Meanwhile Stoneham, just next door to us, did not. Stoneham is now significantly reducing their library hours and senior center services. Documentation for a May 5 town meeting indicates that requests of over $2 million in free cash were made to balance their budget for the upcoming year, with approximately $1.2 million that would have been used for the stabilization fund being used to cover expenses instead. On May 7 the Stoneham announced that another override vote will be held on June 14, to try again to raise money to cover their costs.

As the mayor stated, Melrose will soon choose which path we will take. To be clear, there will be an override put on the November ballot, but the FY26 budget will not benefit or be impacted by it. That is, even if an override passes, Melrose will see the cuts being made in the upcoming year.

Unfortunately, to add to the misery, national politics “are very much a part of our budget” as both the state and the federal government plan to significantly cut back on Medicaid and special education funding and Melrose must prepare for “potentially historic reductions in federal funding.” Melrose was awarded two multi-million dollar federal funds, through FEMA and the EPA, and has included these funds in upcoming budgets. Now, there are concerns if the city will ever have access to these funds. Further, federal cuts will impact the city’s work on climate resiliency and Melrose, a low-lying town that sees significant flooding, may not be able to continue improvements in this area.

What will be cut in the city?

The city will eliminate 21 positions next year (on top of the 3 positions cut last year), which is a 10% reduction in the workforce over the last two years.

Staffing reductions

• 5 positions in the DPW

• 2 staff in the police department

• one position at the library

• one staff in the solicitor’s office,

• one position in the emergency management department

• 50% reduction in the veteran’s services department

• Reduction of the clerk in the election staff office

This is on top of the reductions made last year: the elimination of the city’s sustainability manager, economic development director, and social services coordinator, deferred investment in information technology capital needs, cuts to the Health Department, Veteran Services Department, Council on Aging programs. That is just the city side. On the school side there was a reduction in 14 teachers and 5 administrators in FY25.

Melrose is eliminating its ambulance in the fire department and will be using a private ambulance service, thus eliminating eight positions in the fire department and reducing overtime costs there. This will have the residual outcome of reducing the overall building cost for the city’s fire station renovations project and may help with anticipated cost increases from upcoming tariffs, thus keeping the project within budget.

As has been discussed in previous city council meetings, some FY25 free cash has been requested to pay for non-recurring, non-staff FY26 school and city costs, such as gear for firefighters, Chromebooks in the schools, and fire staff overtime costs, freeing up some (minimal) funding for next year.

The Special Education Stabilization Fund now is funded at slightly over $1million. This money is used to pay unexpected overages in the special education department, which may be especially hard hit next year. It is with a clear eye that Melrose acknowledges it cannot fully replace over-$2million that the city receives from the Department of Education should that funding be eliminated, having a robust stabilization fund helps us be better able to weather a storm of that magnitude should it be needed.

Service reductions

• Flowers will no longer be hung from our lampposts, as funding for watering and caring for the flowers has been eliminated.

• There will be no parklets installed this spring, as the cost of installing, maintaining, repairing, and removing them has been cut.

• The library will not be open on Sundays.

• Melrose will no longer have funds to pay the police overtime costs for the Victorian Fair, Main Street Trick or Treat for Halloween, Home for the Holidays, or Summer Stroll. I believe this means they will not run next year.

• The city yard will have reduced Saturday hours.

• The number of trash barrels at public parks will be reduced, and in some cases eliminated.

• There will be no Sunday pickup of city trash barrels.

• Roadway line painting and roadway sign replacement will be reduced to only critical needs.

• Sidewalk repairs and field maintenance will be reduced.

• Residents will be required to purchase a sticker to access the city yard during calendar year 2026.

• Part time custodial staffing at Memorial Hall will be reduced, meaning there will be a reduction in available times for the use of Memorial Hall.

• The line item supporting DPW’s Adopt A Site program will be eliminated.

• The funding for a public health specialist, all senior van drivers, and the Milano Center part-time staff will be removed from the city budget and will be entirely grant or special revenue funded.

• The mayor’s line item for community outreach will be eliminated. This has funded kindergarten welcome night, new shirts for the Melrose United basketball team, tables for the Melrose high school prom, brochures for the senior resource fair, and communication and publicity of the annual census and local elections.

• The Commission on Women, the Human Rights Commission, the Disability Commission will not receive any city funding.

• Many city services will have increased fees (more details on this upcoming), and will likely include increases to Memorial Hall rental fees, Wyoming Cemetery fees, fees charged by the city clerk’s office, fees overseen by the planning board and zoning board of appeals. There will be increases to certain DPW disposal fees, and a review of the liquor commission and park commission fees. These are in addition to the fees that were already increased in the last year.

As the mayor stated, many of these changes are in line with long-standing practices in neighboring communities. Melrose “cannot afford to deliver services without making the users, our fellow community members, directly bear the cost.”

Looking for other possible sources of revenue

Some of the creative ways the city is looking to find more revenue is allowing retirees age 65 and under to opt out of the city’s health insurance plan. If all eligible retirees had participated in this, the saving would have been close to $800,000. However, this plan was piloted this spring and so far, there has been no interest and no one has signed up.

The city applied for and received a technical assistance grant from the metropolitan planning committee to develop a strategic plan for Memorial Hall. The beloved hall, home to many city-wide arts and cultural events, runs at a deficit to the city. It is hoped that this city treasure can become, at minimum, “budget neutral,” and at best, a revenue generator.

The mayor is grateful for the city’s unions for both “recognizing the city’s challenging financial situation while advocating for their members.” For the first time in over ten years, the city has active contracts with all unions, city and schools, for the next fiscal year, which has allowed for more accurate planning.

The mayor briefly talked about FY27, reflecting that there will be significant stressors on the budget that will be very costly for the city. Namely, negotiating union contracts again, determining retiree benefits packages, and a revenue projection for the Recreational Department that will mean that continuing to run that department using revenue generated from user fees alone (with no city funds) will not be possible.

The most sobering lines of the night: “This budget comes at a cross road for Melrose. Without additional investment, we will need to look next year to cut any spending that is not mandated by law or contract.”

Wow. Please take a moment to read that sentence again and imagine this city with only mandated costs covered, with nothing else. A few examples of what is not mandated are: all schools sports… The Recreation Department… The senior center... Memorial Hall… the Victorian Fair, Summer Stroll, Home for the Holidays, and Halloween Trick or Treating on Main Street…maintenance of parks and planting of trees to name a few. Things that make Melrose….Melrose.

The mayor stated that she believes the way out of this difficult situation is a “greater and more predictable source of revenue.” Specifically, she is advocating for an override, and plans to ask the city council to vote to put a measure on the November ballot. As has been stated before, Melrose has passed one override in the past 30 years, in 2019. Details on this year’s request will be provided later in May.

What’s next?

The next steps are in the hands of the city councilors and they work to appropriate funds for this budget. Budget meetings begin on Thursday, May 8, in the Appropriations and Oversight committee, where the city council will have the opportunity to ask questions about the budget.

The next six weeks will be budget hearings, where every department will present their budget to the city council to be voted on, and either appropriated as presented or reduced.

For anyone interested, this older article details how Prop 2 1/2 constrains our taxes. And this older article outlines how to calculate how an override would impact your taxes, using the figures from the proposed June 2024 override request.

We’re all in community together, Melrose.