LAWRENCE — Gov. Deval Patrick is ready to allow Lawrence to borrow up to $35 million to cover its mounting debt, but if it can't balance the books by Jan. 31, 2011, a state control board may take over the city.
With the city facing at least a $17.5 million shortfall this year, Patrick filed the legislation to help the city "get back on a path to responsible budgeting and to avoid the need for the state to implement a control board."
Without the loan, the city will run out of money by spring, the press release said. Lawrence's budget problems are only expected to get worse next year. According to the release, the legislation would allow the city to borrow up to $35 million over the next 20 years.
"This is a responsible way to help the Lawrence community get back on its feet," said Patrick. "Through support and strong oversight, this bill can put Lawrence on a course toward long-term and lasting fiscal stability."
Mayor-elect William Lantigua says the legislation - if passed - will give his administration a chance to fix the city's budget. It requires some city and school functions be combined and a state-appointed overseer be installed in City Hall to report back to Beacon Hill. In addition, the bill requires the city to move to the state's insurance plan or a regional health purchasing group if it will save the city money.
"We cannot function without a balanced budget," Lantigua said. "This is the only way we can balance this one, and then we'll look toward our next budget."
Lantigua said consolidating school and municipal personnel was long overdue, and he plans to scour city departments in search of unnecessary spending.
"Wherever we feel the services are not needed - or where it's lacking - we will address it," he said.
The governor's bill calls for an assessment of the city government's ability to manage its finances and development of a three-year financial plan, according to the press release.
The City Council will begin its 2010 budget talks at its first meeting on Tuesday, with six new members joining the nine-seat council.
City Councilor Grisel Silva said the governor's proposal would allow the mostly new council to create a plan to repair city spending, but the incoming administration would have to make some difficult personnel decisions.
"This administration needs to do severe cuts somewhere, somehow," Silva said.
Lantigua blamed outgoing Mayor Michael Sullivan for the budget crisis.
"It's sad that we inherited this financial fiasco from the previous administration," Lantigua said. "We just have to go forward and do the best we can to fix this."
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