Town officials are warning of a deepening fiscal crisis after a new three-year revenue and expense forecast showed a projected $7 million deficit in fiscal year 2027, soaring to $11 million in FY28 and $15 million by FY29 if current trends continue.
At the Dec. 10 Select Board meeting, Finance Committee Chair Alec Goolsby, Vice Chair Molly Teets and Finance Director Aleesha Benjamin walked the Board through the updated model, describing it as the second phase of budget season and a continuation of long-term planning work. Goolsby said the figures represent the cost of operating the town next year if current operations, staffing levels, contracts and services remain unchanged.
Benjamin said health insurance remains the biggest pressure point. Marblehead is part of the state’s Group Insurance Commission, and early indications suggest another significant jump next year. She told the board she is hearing estimates of 15-17% and added that insurance experts expect “double-digit increases for the next two to three years.”
Roughly 80% of the town’s budget is tied to personnel costs, including both current employees and retirees, and the forecast shows the steepest increases coming from salaries, insurance and pensions.
“It’s really the health care that’s really burning cities and towns right now,” Benjamin said.
Trash collection costs are also poised to jump dramatically. Public Health Director Andrew Petty told the board the town’s expiring 10-year contracts will likely bring a 51% increase in FY27, with annual increases of 3.5% thereafter.
Benjamin told the board that she and Town Administrator Thatcher Kezer are meeting with every department to prepare the state-required balanced budget.
“There will be a balanced budget, but there will be some pretty big deductions to achieve that,” she warned.
Board member Erin Noonan called the situation “alarming and concerning,” and noted that multiple communities across Massachusetts have recently passed large overrides to avoid deep cuts.
While board members emphasized that they will not begin by assuming an override, they agreed the town will likely need to prepare multiple scenarios showing what cuts would look like and what an override could restore.
Noonan asked how the board could be most helpful as the town enters the heart of budget season. Benjamin responded:
“I think having the Select Board members support an override because of these double-digit increases … it’s just near impossible,” she said. “We have been able to make it the past few years, but this is the fiscal cliff. We’ve hit it and we’re there.”
The balanced budget and its service impacts will be presented publicly at the State of the Town address on Jan. 28.
MMLD outlines major grid-fortification project
Earlier in the evening, the board received an update from Marblehead Municipal Light Department Energy Programs Manager Michael Hall, who outlined a multi-phase plan to reinforce the town’s aging transmission infrastructure that carries most of Marblehead’s power from a Salem substation.
Drone footage taken in November showed several leaning poles and tensioners “strained almost to the max” along that route, Hall told the board, describing the system as highly susceptible to extreme weather events, wildlife and vegetation.
Phase 1 of the project replaces seven wooden poles on the Salem side with galvanized steel, at an estimated cost of $318,593, two-thirds of which is covered by a federal grant obtained with support from Beacon Climate Innovations. Phase 2 would move underground 1,800 feet of sub-transmission lines near the Lead Mills Conservation Area, a roughly $1.6 million effort also largely grant-funded.
Hall noted that although phases 1 and 2 are “most critical,” phase 3 would eventually move underground the remaining 3,900 feet of lines connecting to the Village 13 substation along the Rail Trail.
He expects phase 1 work to begin this winter, with completion targeted for fall 2026. Undergrounding would run into mid-2027.
The work, he said, would “eliminate a key vulnerability of critical infrastructure,” prepare for growing electrical demand and ultimately allow removal of obsolete poles along the Rail Trail.
Noonan welcomed the update and noted that the public often overlooks that the Rail Trail is fundamentally a utility corridor with a recreational easement.
Town administrator reports progress on capital projects
Kezer delivered a brief facilities update, reporting that several capital projects have recently wrapped up. The Mary Alley roof replacement is “100% complete,” with only a rooftop door installation remaining in January. He said the building’s new insulation should also help with utility costs. The next phase there will involve bidding out HVAC replacements, elevator upgrades, ADA-compliant downstairs bathrooms and improvements to the lower-level conference room to make it more functional for public meetings.
Kezer also reported that the Community Center roof is now complete, including a new protective coating and snow guards. At the town-owned Hobbs House, which houses the Marblehead Counseling Center, the deteriorating rear deck has been fully replaced. Bids for a full window-replacement project to improve energy efficiency also arrived this week.
Finally, he said the fire chief and building commissioner have inspected and upgraded fire alarm systems at several facilities, including Fire Headquarters, the Community Center, Old Town House and the DPW facility, bringing them all up to code. Kezer added that the town is continuing its review and upgrades of fire alarm systems across all municipal buildings.
Board appoints two new members to Disabilities Commission
Two vacancies on the Disabilities Commission were filled following interviews with candidates Julie Matuschak and Amy Malkoff, who were unanimously appointed to terms ending in 2028 and 2027, respectively.
Annual Tree Burning and tree pickup
Chair Dan Fox announced that the annual community bonfire at Riverhead Beach is set for Tuesday, Jan. 6 at 6 p.m. Curbside pickup will run Dec. 26 through Jan. 16, and trees must be free of lights, ornaments, stands and bags; wreaths and garlands won’t be collected. After Jan. 16, residents must take their trees to the town transfer station for disposal.
The board’s next meeting will be held in January.
