MARBLEHEAD — Superintendent John Robidoux and Assistant Superintendent of Finance and Operations Michael Pfifferling discussed an additional $1.5 Million budget reduction with the School Committee Thursday night.
These cuts supplement $2.6 million already cut or reallocated from the proposed FY27 budget.
The School Department’s budget cuts are in response to a $7 million deficit currently facing the town. The department makes up $2 million of the deficit.
Robidoux said the School’s Budget Subcommittee created a level-funded budget, which included a reduction of $2.6 million, which was presented at the School Department’s budget hearing.
“The town came back and has said in many different forums that they want us to cut another 1.5 million,” Robidoux said.
“We need to come to some understanding of how do we get out of this fiscal crisis that we’re in? A fiscal crisis that affects the schools and all the town departments. … This isn’t a one-decision thing that made this happen. This is ongoing. This has been taking place for a long time, and quite frankly, no one should be surprised that we’re in this situation.”
Robidoux said he is “not convinced” $1.5 million is the final number, and Pfifferling has “done his due diligence around trying to get to that number.”
Robidoux, following a directive from a previous meeting of the Committee, worked to determine if the additional reductions were to total $1.5 million or if the number was less.
Pfifferling discussed employee benefits within the town and how it contributes to the budget.
He said employee life insurance — an opt-in policy and totals $15,000 where the employee contributes 25%, and the town contributes 75%— costs the school’s $20,300.
He said, “The numbers are so small, it’s not going to make up the $1.5. It didn’t have a great impact. It was off by $100 one way or the other.”
Additionally, other post-employment benefits, which are for retirees of the town, and include health care benefits, have been unfunded, Pfifferling said.
This means the town did not set aside enough money for the allocation.
“We’re using this year’s money to pay last year’s work. … We’re paying for some of these benefits that should have been funded back when the workers were here.”
He said the debt to the town is $142 million and is being funded at $250,000 a year.
In FY26, $250,000 was allocated to this line item.
On Thursday, the Select Board approved a preliminary town budget to be presented to the Finance Committee and voters at the Annual Town meeting. This line item for other post-employment benefits was not allocated any funds in FY27.
According to Pfifferling, 61% of the town’s retirees are school employees.
Regarding pensions for municipal employees, excluding licensed educators, Pfifferling said the town did not fund this correctly in the past, and he currently pays 11% into retirement as a town employee.
The town’s debt on this is $60 million, with the expectation to pay this back by 2036 at a rate of about $6 million per year, Pfifferling said.
He said the town allocated $5.8 million to this line item for FY27. He said 61% of this is on the side of the town, with 39% coming from the schools. “That makes sense because all of our licensed staff is in MTRS (Massachusetts Teachers’ Retirement System).”
Pfifferling said $6 million of the budget must go to fund the pension, “which again frustrates me because we’re trying to work today, but we’re paying off the debt from the past.”
He said the pension allocation and other post-employment benefits “go hand-in-hand,” and once the pension deficit is paid off, the town is “going to look to pay off the OPEB debt.”
