In a financial report delivered by Medford Finance Director Aleesha Nunley-Benjamin on Feb. 16, a troubling financial situation for the city of Medford was presented to the Medford City Council. Revenues plummeted due to the recession caused by the COVID-19 pandemic.
Nunley-Benjamin said that the city received $19,105,993 in local receipts for the fiscal year 2020, a nearly million dollar shortfall from the projected budget. Local receipts are projected to decline to $15,830,089 for fiscal year 2021, which would be a $4.2 million loss from the prior year.
According to Nunley-Benjamin, Massachusetts entered a recession in February 2020 with a recovery outlook between the fiscal year 2023 and 2025. This recession has seen the state’s gross domestic product decline by 3.4% with hotel occupancy plummeting and the shuttering of around 4,000 Massachusetts restaurants. The pace of the recovery slowed down with the winter surge of COVID-19 cases.
“We're in a recession, it's serious and cities and towns need help,” Nunley-Benjamin said. “It's going to be another tough budget year for us.”
Members of the City Council expressed their concern with the financial report.
“We haven’t heard anything positive,” Councillor George Scarpelli said. “I don't want to be the gloom and doom person, but I think people should realize, unless we see a big movement afoot by the federal government, this looks pretty scary.”
Council Vice President Adam Knight echoed Scarpelli's sentiments.
“I do have some concerns as to whether or not we're going to be able to sustain the level of services that we're providing right now, based upon the fact that we only have $8 million of free cash money available to us in reserves," Knight said.
Jackie Piques, director of communications for the City of Medford, wrote in an email to the Daily that the city instituted a non-emergency spending and hiring freeze in January in response to the current crisis, similar to the one implemented in March 2020.
“Like most cities and towns, the City of Medford has seen drastic impacts to its budget over the last year, impacting two fiscal years," Piques said. "We have had to make significant cuts in numerous areas of city operations while retaining service levels and while working to avoid personnel changes as much as possible."
She added that they have had to be creative and hard-working to ensure the health, wellness and safety of the Medford community.
Nunley-Benjamin stressed the importance of a new federal stimulus package that includes aid for local governments.
“We still are experiencing large revenue losses due to the economic impact of the pandemic," Nunley-Benjamin said to the Council. "The reduction in the budget is entirely due to the economic fallout. Revenue losses without federal aid have forced many cities to freeze spending, surface cuts, furloughs [and] layoffs."
Nunley-Benjamin expanded further on her hopes for future assistance.
“We've experienced really huge revenue losses and the government's giving stimulus checks to citizens but not to cities and towns that desperately need it," Nunley-Benjamin said. "So I'm hoping that the Biden administration hears that and says, 'Here's some money for you cities and towns, use some revenue offset, let me help you.' Because we need it.”
Scarpelli agreed with Nunley-Benjamin's perspective on the need for federal aid.
“This seems and looks pretty bleak, unless we see some sort of turnaround on the federal side … We’re looking at some pretty slim times," Scarpelli said.
Piques echoed these statements.
"The City would need a significant, multi-million dollar stimulus to help with the current projected budget deficit for FY22," Piques said.
She said Medford remains hopeful that the Biden administration will make additional funding available to cities and towns.
The city does not know yet whether it will have to make cuts to public services.
“We are awaiting additional information from state and federal governments, however if we do not receive additional federal stimulus funding the City would likely have to cut public services in some fashion,” Piques said. “We will do all we can to avoid this scenario, but we are faced with an extremely difficult budget as we prepare for FY22 following a recession and we are keeping many options on the table as we further our discussions and planning.”
In addition to assistance from the federal government, Medford is hoping for help from Massachusetts.
“The City would like to see the State government increase local state aid funding as the State cut the City’s charter aid reimbursement by $1M," Piques said.
