BOSTON — A vote to allow Lawrence to borrow up to $35 million to avoid a financial meltdown was canceled minutes after a three-hour public hearing on the controversial bailout concluded.
House Speaker Robert DeLeo cited today's forecast of a snowstorm as the reason for the cancellation.
But it was clear from yesterday's Statehouse hearing that legislators have serious reservations about the bill itself and about Mayor William Lantigua's commitment to working full time as mayor to reverse the city's slide toward insolvency.
Bill 4421 would allow Lawrence to borrow as much as $35 million to close a budget deficit estimated at $24.5 million this year, plus another $15 million anticipated revenue shortfall next year.
There is not only concern about the city's ability to reverse course and repay the money, but also about Lantigua's refusal to give up his state representative's seat despite calls urging him to do so by Gov. Deval Patrick, Lt. Gov. Timothy Murray and the Lawrence Democrat's Statehouse colleagues.
State Reps. David Torrisi, D-North Andover, and Barbara L'Italien, D-Andover, yesterday said they have asked Lantigua to give up his Beacon Hill seat to focus on his role as mayor of Lawrence.
"Encouraged, asked, persuaded, urged ... use the strongest word possible," Torrisi said after yesterday's hearing.
State Sen. Steven Panagiotakos, D-Lowell, said during the hearing that he knows Lantigua is an "unbelievable" worker with great passion for Lawrence.
"I also know he's not a magician," Panagiotakos said. "He cannot be in two places at once."
Lantigua stays away
Panagiotakos said Lawrence is asking for "extraordinary relief" for its financial problems. He questioned whether those problems can be fixed if Lantigua is dividing his time and attention between City Hall and the Statehouse.
"It's telling the mayor cannot be here to come down here and testify on the most important piece of legislation in decades," he said.
Lantigua was a no-show at the hearing on the bailout bill before the Joint Ways and Means Committee, irking at least some committee members.
Leonard Degnan, Lantigua's chief of staff in Lawrence, said that as a House Ways and Means Committee member, Lantigua was ethically barred from attending the hearing and was instead working at Lawrence City Hall.
Rep. Robert Hargraves, R-Groton, wasn't buying that rationale for Lantigua's absence.
"As far as I'm concerned, there's no damned excuse for that," Hargraves said. "The CEO of the city does not show up."
However, Hargraves said the people of the city "cannot be held hostage." He said the Legislature has to do what is best for Lawrence.
Under the provisions of Bill 4421, Lawrence would be given until January 2011 to balance the city's budget or face state takeover.
A full-time financial overseer would advise the Lantigua administration, but the mayor would have the final say.
Critics of the version of the bill said that instead of an overseer, the city needs a financial control board to make decisions. The five-member board would include the mayor and the president of the City Council. But the balance of power would rest with three members appointed by the state.
Opponents of a financial control board said Lantigua, the state's first elected Latino mayor, deserves a chance to solve problems he inherited from predecessors.
About 200 people, including 20 representatives and senators, attended the hearing on what's become a statewide debate over how Lawrence's financial crisis should be handled.
Jay Gonzalez, the state's secretary of administration and finance, described how the global economic crisis, cuts in local aid, and "mismanagement and failure to make tough decisions" combined to erode city finances. The bill would allow Lawrence to borrow money, which is not regularly allowed under state law. The bill would not provide any handout of state money to Lawrence, he said.
"There must be enhanced oversight and intervention. The people of Lawrence deserve nothing less," Gonzalez said. "The question is not whether state intervention is needed. The question is what is the appropriate level at this point in time."
But state Rep. Karyn Polito, R-Shrewsbury, pointed to a 2008 report from the Department of Revenue that cited the need for a "control board" to repair Lawrence's failing finances. She questioned if providing the city "with another credit card on top of another credit card that's already maxed out" is the best course of action.
In essence, "the credit of Lawrence is based primarily on the state and local aid given to Lawrence."
More than two-thirds of Lawrence's budget is subsidized by state aid.
Mayor's efforts described
In Lantigua's absence, Degnan and Patrick Blanchette, Lawrence's interim economic development director, spoke yesterday. They cited both the need for the loans and Lantigua's work to improve the city after just 37 days as mayor.
Blanchette said Lantigua has put an expense freeze into effect, drastically reduced the number of take-home city cars, reduced and consolidated city positions, and developed an aggressive strategy to recoup unpaid water and sewer bills.
Degnan noted the infancy of Lantigua's administration and pointed the finger at former Mayor Michael Sullivan's administration for the financial fiasco.
"The fact of the matter is the previous administration caused the problem," Degnan said.
Hargraves rapped Degnan for blaming the problems on the past and encouraged him to look forward. "You gotta go forward," he said.
As expected, ousted city Planning Director Michael Sweeney spoke in favor of a financial control board. After he was laid off three weeks ago, Sweeney launched a Facebook page advocating for a control board immediately.
At the hearing yesterday, Sweeney said $300,000 in new positions were added to the city payroll since Lantigua took over. He also said the administration is actively trying to hire as many as a dozen new employees, despite the ballooning deficit. He urged lawmakers to "strengthen the bill by having a fiscal control board in place."
Also testifying yesterday were Merrimack Street developer Sal Lupoli, Essex Street property owner Gilda Duran, and city councilors Frank Moran and Modesto Maldonado. Three city attorneys, police Chief John Romero, police Deputy Chief Melix Bonilla, Treasurer Patti Cook, comptroller David Camasso, public works Director Frank McCann, and City Councilor Grisel Silva also attended.
Many Lawrence residents also went to the hearing on a school bus that left City Hall around 9:30 a.m. As Ways and Means Committee members filtered out of the room, several of the residents took the microphone to ask the committee to give Lantigua a chance to lead the city forward.
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