LAWRENCE — Mayor William Lantigua yesterday proposed a $237 million budget for the city, its schools and special funds that contains none of the layoffs, service cuts, deficit borrowing and other miseries that were needed to balance the current budget.
The budget proposal would hike spending 5.4 percent, much of it due to an enrollment increase in the schools that will trigger a $10.3 million jump in Chapter 70 aid from the state. Property taxes would increase 2.59 percent — within a fraction of the maximum allowed by state law — while leaving water and sewer rates flat.
Lantigua's budget proposal also would extend a pay freeze for all city employees, add three public works employees and encourages City Council to rent space on city buildings for advertising and cell phone antennas.
The budget proposal is a sharp contrast to the one Lantigua presented last May for the current fiscal year, when he resolved a $15 million shortfall by laying off 80 employees, slashing city services such as garbage collection, chasing down tax deadbeats and borrowing $3.4 million. The state allowed the borrowing - along with another $24 million in borrowing to cover other budget deficits accumulated under former Mayor Michael Sullivan — as part of a deal that also called for cutting health care costs and accepting a fiscal overseer at City Hall.
"Last year, I asked for shared sacrifice so we could get to this fiscal year," Lantigua said in a 40-minute PowerPoint presentation of his budget to the council last night, which he delivered in both English and Spanish. "This budget before you is without any borrowing. We're not laying off one single person. The deficit has been eliminated. (These are) real numbers, not make-believe. Not hiding. Not duplicating and nothing phony about it." However, the budget does include $200,000 that would be raised by increasing overtime parking fines from $15 to $25, an increase the City Council is considering but has not approved.
Other trapdoors also may exist in the budget proposal. It contains just $495,000 to settle seven pending brutality lawsuits against police, even though $350,000 already is tapped by a single settlement reached earlier this year.
The budget also contains just $150,000 for snow and ice removal, far below the $1.3 million spent this year. And it proposes no pay hikes for any city employee, although contracts with two police unions and the union representing clerical and public works employees are unsettled.
The new budget also reaps the benefits of many of the cuts that Lantigua and the council put in place to solve the fiscal crisis last year, including many ordered by the state. Among them, the city will save $1.5 million by moving the health benefits for retired employees from a city-run plan to the federal Medicare program. The city's unemployment insurance bill will drop from $1 million to $300,000 as payments to laid off employees run out. With no layoffs planned in the upcoming fiscal year, severance pay for police and firefighters will drop $323,000.
In another tentative measure of Lawrence's fiscal recovery, Lantigua noted last night that the city will leave nearly $8 million of the $35 million borrowing authorization on the table when the clock runs out on the authorization June 30. The budget also includes $1 million in new property tax revenues that will be generated by new development, including Malden Mills, a former textile mill on the Methuen line where two buildings are being converted to 75 apartments.
Lantigua's budget proposal is not entirely without pain, much of it brought on by the unbalanced budgets of the past. The principal payments on the city's debt would nearly double in the next fiscal year - to $2.8 million - as it makes the first payments on the $27.4 million it borrowed last year to pay off the four years of operating deficits.
And while the Fire Department is using a federal grant to rehire all 37 firefighters who were lost to layoffs and attrition over the last few years, the new budget contains little good news for police.
Lantigua said his budget includes funding to call back nine police officers who were laid off over the last year, but police Chief John Romero contradicted Lantigua immediately after his presentation. Romero said eight officers were called back, not nine, and he said seven of those replaced officers who were not part of the layoffs but left on their own.
"The names may have changed, but fiscal year 2011 has one more (officer) than 2010," not nine, Romero said.
None of the 24 police officers who were laid off in this year's budget would be rehired in the new budget unless the federal government approves another request aid that the city will submit later this year, Robert Nunes, the fiscal overseer appointed by the state, told Eagle-Tribune editors at a meeting at the newspaper yesterday afternoon.
Nunes otherwise was characteristically upbeat in his presentation to the editors. He said the state Bureau of Accounts, an arm of the state Division of Local Services - which Nunes oversees - has tentatively signed off on the new budget.
"The city has turned itself around," he said. "The economy has turned around. The revenues have improved."
Still, Lantigua's budget proposal includes suggestions that the city's fiscal headaches are not entirely over. For example, the budget would satisfy a mandate from the state that the city set aside a $744,000 capital reserve - which is intended to cover ongoing repairs and major purchases - by using money that already has been designated to rebuild the interior of the Guilmette school. Much of the Guilmette's interior was demolished over the winter to wipe out a mold infestation.
The City Council met in special session last night to receive the budget and begin the task of adopting it by the start of the new fiscal year on July 1. The council can cut spending, but cannot increase it, before sending the budget back to Lantigua for his signature and for a second sign-off from Nunes.
"We're going to make sure the numbers add up and the revenues are real," Daniel Rivera, who chairs the council's Budget and Finance Committee, said after Lantigua's presentation. "If we see inefficiencies, a place to cut, we're going to cut."
Rivera identified a first cut last night, when he said he would ask city councilors to cut their $15,000-a-year salaries 20 percent. The councilors cut their salaries 10 percent this year, which Lantigua restored in his budget proposal.
Rivera's committee is scheduled to begin its review of the budget June 8 and will hold two public forums on June 16 and 20.
In all, the $237 million budget includes $144 million for the schools, which is funded entirely by the state. The city's water, sewer and airport funds would receive another $17 million, and the city itself would receive about $76 million.
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