HAVERHILL — The City Council has rejected Mayor James Fiorentini's request to borrow $44,090 for a federally-mandated study of the downtown floodwall, putting about 40 merchants and property owners in the area at risk for an unprecedented surge in insurance costs.
Councilors agree there's no time to waste in starting the study, but said Fiorentini is to blame for the delay because he is insisting on borrowing money for the analysis.
They want the city to use an account funded by "water supply fee" payments from developers that is reserved for expanding, maintaining or repairing Haverhill's drinking water system. The fund, created by city ordinance in 1996, has about $1.5 million in it, city officials said.
"It's a big mistake to go into debt for a relatively small amount of money when we may be able to use the water supply account for it," said Councilor Michael Young, who is leading the fight to use the water supply money for the floodwall study.
The city's lack of action on the matter has put Haverhill in jeopardy of missing a deadline for completing the study and any repairs or improvements to the 74-year-old barrier that may be required by regulators. The federal government has given the city until May 20 to complete the work or risk having the floodwall decertified.
About 40 businesses and other property owners located downtown on the banks of the Merrimack River would see their insurance rates skyrocket by up to 10 times if the floodwall is decertified, Public Works Director Michael Stankovich said.
"Without certification, it will be like there is no floodwall at all when it comes to insuring property down there," Stankovich said.
Stankovich said the city is already way behind schedule in starting the project. He said he had hoped to give the firm doing the study the green light to begin work last week.
Councilors said they understand the urgency to begin the study right away. But they disagree with Fiorentini's plan to pay for it by borrowing money.
The water supply fund was most recently used to pay for an ongoing study of potential future drinking water sources, including the Merrimack River. Recently, the council approved a request from the mayor to use $1 million from the account to buy new water meters for city residences and businesses.
At last week's City Council meeting, Fiorentini said he also wanted to use the water supply account to pay for the floodwall study. However, he said the city has received legal opinions from City Solicitor William Cox and another city lawyer, Michael Leon, that it would be illegal to use the fund for the floodwall study or improvements to the structure.
"We would expose ourselves to liability if we go against two legal opinions. We could get sued and we'd lose," the mayor told councilors. "If I came here and said I have two legal opinions not to use the water supply fund for this study, but I want to do it anyway, I'd get killed ... We can't do it."
Councilors disagree with the legal opinions, and they questioned the mayor's motivation for soliciting them. They contend Leon was not given all available information about the fund, such as that it is being used to buy water meters and that it was once used to pay back a loan.
Council President Michael Hart said he doesn't accept Fiorentini's argument regarding the legal opinions either.
"We're putting the legal opinions on a pedestal because a decision was made to pay for the study a certain way and people have dug their heels in," said Hart, a lawyer and former city solicitor. "I think we could probably use it for the (floodwall) study because it's close and because of how the fund has been used in the past."
At last week's meeting, Young produced an e-mail from Deputy Public Works Director Robert Ward that he called "the smoking gun" that shows why the mayor and Ward don't want to use the water supply fund for the floodwall study.
The e-mail says the city has already committed $1 million in the fund for the water meters, and that the city intends to use the remaining $500,000 to finish the study on future drinking water sources.
"(Ward's) department has been raided to pay for the city budget, so this is all he has left to get things done that he has to get done," Young said of the water supply money. "The whole $1.5 million has been earmarked or committed. That's why the mayor got the legal opinion saying it has to be done how he wants to do it."
Hart said Young "lifted the cover on what's really going on here."
"I'd like some transparency," Hart said. "We're using the fund for some borderline things, but then we're told we can't use it for other things that also may be borderline."
Fiorentini accused councilors of putting the city and downtown property owners at risk.
"The argument of some of the councilors seemed to be that if no one is looking we can do whatever we want with money," the mayor said. "This is simply wrong. Our job is always to follow the law and always to do what is right. If our lawyers tell us that we cannot use the money, then we have to follow the law just like everyone else."
Asked what he will do if the council does not approve his request to borrow the money by next week, Fiorentini said he is not sure. He said he talked to Leon again yesterday and that the attorney stands by his original opinion.
"We all agree we have to do the study and that there is no time to waste," the mayor said. "But we can't do it without the council's support. They're either going to have to approve a bond or an appropriation (of money) from somewhere else."
The flood wall runs for roughly 2,200 feet on the north side of the river, essentially between the Comeau and Basiliere bridges, and along Washington and Merrimack streets. The U.S. Army Corps of Engineers built it after the 1936 flood that left much of downtown under water.
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