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THE MALDEN ADVOCATE–Friday, March 4, 2022 Page 7 FUTURE | FROM PAGE 1 den Public Schools. Hogan’s report was made in coordination and consultation with City Controller Charles “Chuck” Ranaghan, who was also present at Tuesday’s meeting. There was somewhat of a siren set off with regard to a potentially significant “budget buster” item down the road, as Hogan described a “Top Six” of existing budget items that were significant to the financial planning responsibilities of both present – and future – Malden city officials. The largest “Budget Future” line item of concern described by Hogan was the $266 million Other Post-Employment Benefits (OPEB) liability. OPEB covers the medical insurance coverage costs the City of Malden provides to municipal employees who are vested after a certain number of years of employment. The $266 million was the liability the city is obliged to fund for employees no longer actively employed who are eligible for the medical insurance subsidy. While Malden at this time nor in the future will not be required to provide funding for the entire OPEB all at one time, it is a liability and the city is responsible for administering that figure, Hogan explained. He said that while the state at this time is not requiring communities to apportion direct fiscal budgetary funding to the health insurance liability, as it does to the pension liability figure, he expects that it will do so at some future date. “When that day comes, $266 million is a big number; it’s real and it’s #1,” Hogan said. To put the figure in perspective, Hogan said the #2 item on the budget impact list was the municipal pension liability figure, which he said is approximately $100 million. He said the city provided $14.8 million in the present fiscal year budget toward that liability figure. “So, when you look at $266 million, you can see where that will go,” he said. The city’s chief financial strategist did tell the City Council that Malden is in a better position financially on this issue than many communities of its size and in its region for two key reasons. Hogan said Malden has already funded over 70% of the pension liability, which is far above many communities. He told the City Council the state-mandated budget item assigned to the employee pension liability figure is designed to increase a minimum of 8.6% annually. “We’ve done a very good job as a community on our pension liability The city’s chief budgetary stra t egist, Ron Hogan, addressed the Malden City Council at last Tuesday’s meeting. (Advocate Photo) fund. When you hear of states like Florida and Rhode Island with these pension fund crises, they are about in the 15 to 20% funded range.” The second reason Malden is in better shape than some other communities in the region, Hogan said, is the fact that a new ad hoc City Council committee is now in place to examine and discuss longterm financial matters – established for the first time this year by City Council President Craig Spadafora. “This is something that not many other communities have in place. I really have not heard of it in any of our cities and towns,” Hogan said. Hogan added that a good example of an item to be discussed was the pension liability fund. Due to go up 8.6% next year, it would be a budgetary line item increase of $1.1 million, an increase that would not be sustainable annually given the existing resources. A third issue on the budgetary impact list is the discrepancy in the Chapter 70 education funding from the state and what the state has determined Malden is assessed to fund locally. Hogan gave a presentation on this sole issue to the City Council earlier this fiscal year, this past November, where it was stated Malden is expected to pay what local city officials have determined is a disproportionate amount for education funding, as compared to similar communities, such as Everett and Revere. He reiterated that Malden officials have been in frequent contact with our local representatives at the state level – State Representatives Paul Donato, Steven Ultrino and Kate Lipper-Garabedian and State Senator Jason Lewis – to request that gap be lessened. It is a liability for Malden financially, and it has to be addressed to get the city to a more equitable result from the state Chapter 70 funding formula, Hogan said. Another impactful budgetary item in the near future is the expected decision on a lawsuit made by a group of past and present Malden Police officers regarding detail pay, which is called Owens et al v. City of Malden. Hogan says there is a potential municipal liability for the city in that case of $8.25 million. The status and condition of the two major parking garages in the downtown district of the city – the Jackson Street Parking Garage and the Central Business District (CBD) Garage – is another budgetary impact item. Both garages were formerly maintained and run by the Malden Redevelopment Authority (MRA), which in 2021 was dissolved and reconfigured as a wholly municipal office, Strategic Planning and Community Development. The two garages were deeded to the City of Malden as a result and are now its responsibility. The two garages, particularly the CBD garage, are in various stages of disrepair, and need work in regard to both safety and sustainability. About $3.5 million was spent by the MRA on ongoing repair projects prior to the garages being turned over. Hogan said some major expenditures have to be made in the coming years to achieve the safety and general repair needs and goals for the two garages. He estimated $10 million is a base figure for those repairs and enhancements. Number Five on the “Top 6” list is a new addition: the coming assessments to the City of Malden as its share of the new, $317 million Northeast Metro Tech high school building in Wakefield. Like all of the 12 sending schools, Malden has been assessed a portion of the funding cost, with that total figure at $36.3 million spread over a 30-year bond, which would make it approximately $1.2 million per year, beginning in Year 3 of the construction in 2025. The final “Top 6” item is the expected, future costs of repairs and mandatory maintenance of the Malden Public Schools buildings, particularly the five K-8 school buildings, Beebe, Ferryway, Forestdale, Linden and Salemwood, which were all built close to 25 years ago, from 1997-2000. “They were all built around the same time, close to 25 years ago, and they are starting to show some of the same maintenance needs, like leaky roofs, for instance, that buildings require of that age,” Hogan said. Several Councillors had some questions on a number of the points made in the presentation, with Ward 2 Councillor Paul Condon and City Council President Spadafora concurring with Hogan that productive discussions are expected to originate and continue in the future with the new Long-Term Finance Committee. 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