LAWRENCE — As indictments and charges pile up against employees accused of shaking down a city that is heavily dependent on state aid, in Boston there is little appetite for further tightening the grip on city spending.
But there is growing impatience among state legislators that Mayor William Lantigua has allowed workers who have been charged or indicted to continue collecting their paychecks even after they’ve been sent home.
Yesterday, state Rep. Diana DiZoglio, D-Methuen, said she will introduce a bill that would give the city’s state-appointed fiscal overseer the power to remove indicted employees from Lawrence’s payroll.
Also yesterday, state Representative Frank Moran, who is president of the Lawrence City Council, said the mounting indictments among city workers have caused him to reverse his support for Lantigua on this issue.
“In the past, it was only one or two persons,” Moran said. “Now, when you have a number of people being indicted. At this point, you have to send a message to city employees to let them know bad behavior is not going to be rewarded, not going to be tolerated.”
Several of the employees recently charged or indicted have worked on Lantigua’s campaigns.
Beyond clearing the city payroll of employees who have been indicted or charged with official corruption, there is little support among state legislators for extending the state’s control over city and school operations. A spokesperson for Gov. Deval Patrick did not respond to a question about whether there is a need for more control, except to say that the state oversight so far “has helped the city regain its financial footing.”
At the schools, where a former superintendent recently completed a jail term for diverting school resources to his personal use, a state-appointed receiver took full control of all operations, including academics and spending, late last year. The decision by the state Board of Elementary and Secondary Education to send in a receiver was driven by chronic under-achievement among students, not the conviction of former Superintendent Wilfredo Laboy. The schools will spend $142 million in the fiscal year that begins July 1, nearly all of it state money.
At City Hall, a fiscal overseer with veto power over spending has been in place for more than three years as part of a deal that allowed the city to borrow up to $35 million to pay off deficits that accumulated under former Mayor Michael Sullivan. In the end, the city borrowed $24 million.
Yesterday, the legislators representing Lawrence and the region said the alleged thefts and shakedowns against the city and its contractors over the last few years have been a drain on the state’s poorest city, but noted that the city is otherwise recovering from its budget brinkmanship. Its last three budgets have had multimillion surpluses and Robert Nunes, the fiscal overseer, has said the $255 million budget for the city and schools that Lantigua sent to the City Council last week is balanced.
Lantigua was able to balance the new budget even while retaining all 31 firefighters who faced layoffs when the federal grant that has been paying their salaries runs out in August. At the same time, police ranks remain heavily depleted in Lantigua’s budget proposal.
“As this develops, we can re-evaluate things, but right now city finances are in good shape,” said state Sen. Barry Finegold, D-Andover. “As things play out, we’ll continue to evaluate the situation. But according to the bond agencies, the city’s finances are in good shape.”
Standard & Poor’s raised the credit rating on Lawrence’s long-term general obligation bonds half a notch, from BBB- to BBB, both investment grades, in August. Also in August, Moody’s Investors Service left its rating of the city’s debt at Baa1, also an investment grade. Both companies improved their outlooks for the city’s credit ratings, meaning they do not expect to change the city’s credit rating anytime soon.
Moran, the state representative and City Council president, agreed that more controls are needed at Lawrence City Hall, but said they should be imposed by Mayor Lantigua, not by state legislators or Gov. Patrick.
“All these indictments that are going on need to be addressed by this administration,” Moran said. “These people work for the mayor. They fall under his jurisdiction.”
Most recently, on Thursday parking attendant Justo Garcia was arraigned for allegedly skimming thousands of dollars from parking receipts at the Museum Square parking garage, where Lantigua hired him in 2010 and then promoted to a position that gave him oversight over collections. Garcia was Lantigua’s campaign photographer in 2010 and remains a campaign foot soldier.
Also arraigned on corruption charges in recent months were Deputy Chief Melix Bonilla, who managed Lantigua’s 2009 mayoral campaign; former Chief of Staff Leonard Degnan, who also worked in Lantigua’s 2009 campaign; and police Officer P.J. Lopez, a Lantigua loyalist in a police department.
Degnan resigned before his indictment. Bonilla and Lopez continue to collect their salaries as their cases go forward.
Garcia also remains on the payroll, although he did not report to work yesterday, said acting Public Works Director John Isensee.
In the Building Department, inspector Lawrence Hester was not criminally charged but was sent home for 10 weeks last year after it was discovered that he failed to report $33.3 million in new development he approved over two years, leaving $300,000 in property taxes uncollected. The city was later able to bill for all but about $32,000 of the lost revenues. Hester was paid for nine of the ten weeks he was put on leave.
“It’s a messy pattern, definitely,” state Rep. Marcos Devers, who is running against Lantigua in the Sept. 17 preliminary election, said about the allegations of wrongdoing at City Hall. “What’s next? We don’t know. We need to wait for the district attorney to do what he needs to do. We need to hear from the Attorney General, to see where all this, the two grand juries, are going. But If I become mayor, or whoever the mayor will be, we need to take action.”
Lantigua is in Florida, where he attended his father’s funeral yesterday, and could not be reached.
Nunes, the city’s fiscal overseer, did not return phone calls.