LAWRENCE — Mayor Michael Sullivan is advising city employees who are worried about being denied pay for unused sick and vacation time to postpone their retirement until next June. He's also advising Mayor-elect William Lantigua to keep them on.

"I'm encouraging all of the people who were going to leave Jan. 4, to continue working, at least through the end of the fiscal year (June 30)," Sullivan said in an interview.

"If that accrual money that is owed them isn't going to come, they should stay. I know if I were a regular employee and were planning on leaving on the 4th and find out I'm not going to get the money owed me, then I'm not leaving," the mayor said.

Sullivan, who is completing his second four-year term, leaves on Jan. 4 and state Rep. Lantigua takes over as the state's first elected Hispanic mayor.

At least a dozen city employees are owed a total of some $700,000 in accrual payments for unused sick and vacation time and longevity and shift differential payments. But the payments are very much in doubt because the cash-strapped city doesn't have the money in its budget. The city is awaiting state approval to borrow millions of dollars to help close a deficit now estimated at $17 million.

The city solicitor and comptroller have both told Sullivan the city can't spend what hasn't been appropriated.

Lantigua was not available for comment. His top aide, Leonard Degnan, said the new administration doesn't intend to deny payments to those who have earned them fairly. "Contractually, if they are owed the money, we are going to pay them. ... But we definitely have questions about whether some of these payments are legitimate," Degnan said.

He pointed to a combined $175,000 in payments claimed by Thomas Schiavone, economic development director, and Barney Reilly, senior citizen director. Degnan also flagged a request by Mark Andrews, the outgoing budget and finance director, for $41,000 for unused vacation and sick time.¬ Andrews, who has worked for the city since September 2007, recently accepted a job as town administrator in Wareham.

Degnan said "the city has no money" and is teetering on the brink of bankruptcy, so it may have to reimburse the deserving employees on a payment plan over a period of months or possibly years.

Meanwhile, in an e-mail exchange with Sullivan, City Attorney Charles Boddy and Comptroller David Camasso told the outgoing mayor the city cannot legally pay any of the accruals without money earmarked for that purpose.

"The bottom line is, under state law, the city can't spend unless there's been an appropriation," said Boddy, who met earlier this week with state Department of Revenue officials to discuss the issue. "And there's been no appropriation for this."

Camasso¬ warned "there can be no payouts" unless he transfers money from other accounts to fund an appropriation.

The catch is there's not enough money in other accounts to make such a transfer.

Said Camasso: "My staff and I have reviewed each department's budgets and found that there is no¬ surplus large enough to cover the accruals that total approximately $700,000."

Sullivan argues that the city has always found a way to pay the accruals during his eight years in office. Typical waiting time for retirees to receive their payouts was only six to 10 days, he said.

Already this year, 25 city employees have received accrual payments after retiring or being laid off, Sullivan said. Topping the list, with their payouts, are Police Capt. Alfred Petralia, $108,652; Deputy Fire Chief James Moffatt, $86,877; Water Commissioner Robert Fazio, $75,900; Fire Capt. Robert Higgins, $70,547; and Fire Capt. William Lannon, $60,458.

Sullivan also noted that when 27 city employees took advantage of an early retirement plan in 2003, the city was able to pay them a combined $800,000 in accruals, even though the money was not budgeted.

Sullivan said if there is a holdup in payouts for the latest group of retirees, they should stay on.

"If this is not going to be a smooth process, I'm going to encourage all these employees to change their minds and stay on and serve the city at least through the fiscal year, when there's a new budget," he said.

Sullivan said the stampede for the exits was being driven by the fact that Lantigua has made it clear he wants most department heads and the entire mayoral staff to leave as soon as the new administration takes over.

"People are operating out of fear about what's about to happen with this new administration," Sullivan said.

Sullivan said there was no purge at City Hall when he took over. He said he kept everyone who wanted to stay and only hired new staff to fill vacancies.

Sullivan said there would be no accrual issue if employees stayed on into the new year.

"Mayor-elect Lantigua should recognize this and start his term with the present department heads and staff," he said.

By taking his advice, Sullivan said, Lantigua could save the city "hundreds of thousands of dollars."

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