LAWRENCE — "Now we can move forward," Mayor William Lantigua said after state Senate approval of a bill that allows Lawrence to borrow up to $35 million to stay solvent.
"Expenses are going to be controlled, and I'm glad that we're going to be able to balance the budget," Lantigua said yesterday after the Senate voted overwhelmingly in favor of the bill.
The bill, originally filed by Gov. Deval Patrick, will allow the city to float up to $35 million in municipal bonds, but it comes with strings attached.
The bill will now be sent to the House leadership and it could go to the governor for his signature by the end of the week.
Rather than immediate establishment of a strict finance control board, as called for in a defeated Republican amendment, it requires a strong overseer to keep an eye on the city budget and report any financial improprieties, or success, to the state.
Just one call from the overseer reporting that Lawrence's financial troubles need stronger medicine could result in the immediate imposition of a control board.
"A finance control board will be appointed if the overseer reports, in writing to the Secretary of Administration and Finance, that the city is unable to achieve a balanced budget," according to a summary of the bill that was approved on a 31-4 vote.
This differs from Patrick's version that called for a finance control board next year if the overseer determined it is needed.
The original wording also gave the secretary of administration and finance greater leeway in deciding whether a control board is needed. The Senate's bill takes away that ambiguity.
Also part of the bill is additional language regarding receivership. If a finance control board is appointed, and that board decides "its powers are insufficient to restore fiscal stability," then the control board "shall" notify the secretary of administration and finance. The secretary must then advise the governor to file legislation putting the city into receivership.
Mayor's office could be abolished
The bill recommends that the receiver "shall exercise all powers of the control board, and may exercise the power of any city official, elected or otherwise."
Further, the bill states, "upon appointment of a receiver, the office of mayor shall be abolished. Thereafter, the receiver shall exercise all of the mayor's statutory powers."
Sen. Steven Baddour, D-Methuen, said he feels the amended bill is strong enough.
"We struck the right balance between putting teeth into the bill and allowing Lawrence to resolve its problems with a new council and a new mayor," Baddour said. "It's a very short leash."
Sen. Bruce Tarr, R-Gloucester, whose district includes North Andover, disagreed.
"We are taking half steps instead of going directly to a finance control board," he said. "We are enabling the city — allowing the situation to continue without strong intervention."
Tarr said a five-person finance control board, with three people appointed by the governor and the other two being the mayor and president of the City Council, would have brought greater control over a budget that is 70 percent funded by the state.
"People paying the bills are from other parts of the state," he said. "With an overseer, taxpayers have no role. With a finance control board, there are people there representing the taxpayers. That isn't there in the bill that was passed."
Senate Ways and Means Chairman Steven Panagiotakos of Lowell said the $35 million is not a direct loan. The bill would simply allow the city to borrow money on the bond market. It would be up to Lawrence to repay the bonds.
He also said the bill was tougher than the version passed by the House last week.
When pressed by Sen. Richard Tisei, R-Wakefield, about what would happen if Lawrence is unable to repay the $35 million, Panagiotakos conceded that there's nothing in the bill that legally requires the state to bail out Lawrence. But a future Legislature probably would feel "morally" compelled to do so, he said.
The next question, said the senators, is who takes on the role of overseer, a post appointed by the governor. Tarr said that whoever it is will need to have a "strong personality," and will have to be able to work well with the Lantigua administration and the City Council.
"It will take someone with some political skill," Tarr said.
Lawrence isn't the first community to ask the state to let it float bonds to close a budget gap.
In the past decade, four communities — Medway, Salem, Southbridge and Swansea — were given permission by the Legislature to do just what Lawrence is asking, but without the requirement of a control board.
In each case the communities were seeking much smaller bonds, between $1 million and $5 million each.
