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Governor Patrick Files
Legislation to Help City of Lawrence Regain Fiscal Footing |
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BOSTON –
Thursday, December 31, 2009 – To help the City of Lawrence
rebound from extreme fiscal challenges, Governor Deval Patrick
today filed legislation that will give the city new tools to
help balance its books and set itself on a path to a strong
economic future.
The City of Lawrence is facing a current fiscal year operating
budget deficit of approximately $9.5 million and a capital
project deficit of $8 million. Lawrence is also facing a
projected budget gap in Fiscal Year 2011. The City will be
unable to resolve these budget deficits without the authority
to borrow, which officials are unable to do under current law.
Without state action, the City of Lawrence will be unable to
continue to fund critical city operations as early as this
spring.
“This is a responsible way to help the Lawrence community get
back on its feet,” said Governor Patrick. “Through support and
strong oversight, this bill can put Lawrence on a course
toward long-term and lasting fiscal stability.”
“This bill provides the new Mayor and City Council time and
tools to repair Lawrence’s budget. There is a lot of hard work
that needs to be done. This bill creates the framework for a
strong partnership at the City and State level to ensure
Lawrence’s financial stability for the future,” said Senator
Susan Tucker.
"This is a step forward in the right direction for the City,”
said Representative Barry Finegold.
“I appreciate Governor Patrick for his leadership and efforts
to put Lawrence on strong financial footing,” said Mayor-Elect
William Lantigua. “I look forward to continue to working with
him and all of our partners to bring the City’s budget into
balance and to make our community strong for today and
tomorrow.”
The comprehensive legislation filed today requires the City to
meet certain conditions to get back on a path to responsible
budgeting and to avoid the need for the state to implement a
control board in Lawrence.
Specifically, the legislation allows the City to borrow into
deficit up to $35 million to balance its FY10 and FY11
budgets, allowing it to generate a steady cash flow, and to
meet payroll and other commitments. The City would be able to
borrow for up to 20 years. The bill also increases state
oversight of the City’s finances by providing for a
state-appointed fiscal overseer who will work cooperatively
with the new mayor and city council. The overseer will report
directly to the Secretary of Administration and Finance and
will be paid for by City funds.
The bill requires the overseer to assess the ability of City
government to manage the City’s fiscal challenges and develop
a three year financial plan. If the City is not able to
balance its FY11 budget before January 31, 2011, the overseer
will report this to the Secretary of Administration and
Finance. If the state overseer concludes that the City is
unable to achieve a balanced budget and fiscal stability after
that time, the Secretary of Administration and Finance may
appoint a finance control board with extensive powers.
In addition, the bill requires the City to act to move to GIC
or a regional health purchasing group if it will save the City
money and requires the consolidation of municipal and school
business functions. |
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