EagleTribune.com, North Andover, MA

November 27, 2012

Editorial: Save surplus for when fire grant runs dry

The Eagle-Tribune

---- — That Lawrence accumulated a $6.6 million surplus in the last fiscal year is good news for the financially troubled city. Financial prudence and careful oversight is required to maintain that surplus for when it may be needed.

Finances have a history of going south in a hurry in Lawrence, and it is easy to imagine that surplus evaporating even before the next budget is produced. Further, city leaders will have to remain on guard against a cash-grabbing free-for-all as various city departments and interest groups seek to lay claim to a portion of the funds.

There will likely be a real need for that money in the next fiscal year’s budget as federal grants run out with little prospect of renewal.

The $6.6 million surplus in the fiscal year that ended June 30 includes $2.7 million that was unspent by city departments and $3.3 million from another surplus left over from the year before, according to the state Department of Revenue. The surplus amounts to 3 percent of the $220.4 million that was budgeted for the city and its schools in 2012, which was the first budget in four years that did not include deficit spending or borrowing.

There were surplus funds in each of the previous two years — $5.4 million in 2010, $4.7 million in 2011. But much of those surpluses was eaten up by unexpected expenses at the end of the fiscal years including the mold cleanup at the Guilmette School and a number of police brutality judgments.

There is a concern on the horizon. In 2010, budget cutting forced the layoff of 23 firefighters, leaving the city to rely on mutual aid for even the most basic fire calls. The reliance on mutual aid irritated surrounding communities and jeopardized public safety in the city.

The situation was resolved when the city received a two-year, $6.6 million grant that allowed the hiring of 38 firefighters. That grant expires June 30. If Lawrence cannot fund the firefighter positions on its own, the city will be right back where it started — woefully short of firefighters and the public at risk.

The prudent thing to do would be to set aside that surplus to cover the loss of the fire grant. But there already are claims being made against the money.

Robert Nunes, the fiscal overseer appointed by the state to oversee spending in Lawrence, said Mayor William Lantigua will propose budget amendments this week that may call for spending about $1 million of the 2012 surplus on “one-time expenses.” Nunes would not elaborate on those expenses. Lantigua, true to form, could not be reached for comment. So, it’s anybody’s guess on what Lawrence’s leaders plan to blow a million bucks.

Gleefully spending down surpluses as fast as the state can certify them is never prudent fiscal policy. A well-managed municipality ought to consider that money as rightfully belonging to the taxpayers and return it by lowering tax rates and fees.

Lawrence is not, by any stretch of the imagination, a well-managed city. It remains a ward of the state, one that for the past few years has simply taken in more state and federal assistance than it can spend.

Lawrence, at a minimum, must be able to assure its residents that the city will provide them with the basics of police and fire protection. Now, a significant source of funding for the city’s fire protection is about to run dry. Lawrence’s leaders would be unwise to spend the city’s surplus on anything else.