CHAOS in LAWRENCE
State to Secure $35M Bailout
Loan for Bankrupt Lawrence
Tom
Duggan
If Governor Deval Patrick has his way,
the City of Lawrence will be able to
borrow $35 Million to pay for their (to
date) $24.5 million deficit. House Bill
4421 will allow Lawrence to borrow the
money which would be backed by state
taxpayers and have no fiscal control
board, no receiver and no oversight.
State Representatives David Torissi, (D)
North Andover, Barry Finegold (D) Andover
and Willie Lantigua (who also serves as
mayor) all support the bill.
Lawrence Mayor Willie Lantigua is also
the Lawrence State Representative in the
legislature and serves on the powerful
Ways and Means Committee. He will be able
to vote on the very bill that will give
him a $35 million loan to spend as the
mayor of Lawrence.
No Infusion of Capital?
Last month Governor Deval Patrick told
the Valley Patriot that the help he and
the state would be giving to Lawrence
would not be financial but would help
Lawrence become more accountable with the
millions of dollars Lawrence spends every
year.
I will say that what we are looking
at in Lawrence is not an infusion of
capital, he told a Valley Patriot
reporter. its getting at some
reforms that make sure that they get on
sounder fiscal footing and management so
that this sort of thing doesnt
happen again. (AUDIO OF INTERVIEW WITH
THE GOVERNOR)
(RELATED STORY)
Governor Patrick is now lobbying heavily
for the $35 million loan for Lawrence at
the state taxpayers expense. All the
while Lantigua has been using his power
as mayor to settle political scores,
which will cost the city millions in
unemployment compensation, lawsuits and
contract labor disputes.
The Hit List
So far, Lantigua has fired Myles Burke,
the citys Inspectional Services
Director, tried unsuccessful to
fire Planning Director Mike Sweeney,
and fired Mary Lou Nichols an office
manager at the DPW. He demoted Deputy
Chief Mike Driscoll and promoted his
campaign manager Sgt. Melix Bonilla to be
Deputy Chief.
He also targeted Recreation Director
Linda Schiavone but withdrew her name
from the council agenda after reaching a
secret deal with her to stay on until
June and then retire on her own. Lantigua
refuses to disclose the terms or the
details of that deal. Coincidentally,
Burke, Nichols, Sweeney, Driscoll, and
Schiavone, all openly supported
Lantiguas rival Dave Abdoo in the
mayors race last November.
Because Lantigua chose to lay off Mike
Sweeney and other city workers he will be
paying unemployment to at least a dozen
employees as well as those he plans to
hire to refill those jobs. According to
postings in Lawrence City Hall, Mayor
Lantigua has since posted the jobs of
employees he has laid off, in violation
of state law.
If HB 4211 passes, State Representative
Lantigua, who also serves as mayor of
Lawrence, will be in charge of spending
that $35 million.
No Cash
Flow
Lawrence has been deficit spending since
January because City Council President
Patrick Blanchette adjourned the
08-09 City Council session without setting a tax
rate and sending out the property tax
bills. As of the date we went
to press (February 4th) the tax rate in
Lawrence under the new council has still
not set a tax rate or sent out property
tax bills. This means the City of
Lawrence has no cash flow while
continuing to pay for police, fire, dpw
services and other city functions.
According to Mayor Willie Lantigua the
citys deficit has climbed from $9.5
Million in early December, to $17.5
million by the beginning of January, to
$24.5 Million by the end of January.
Lantigua says he inherited the budget
mess and shouldnt be penalized for
prior mismanagement. But Lantiguas
new acting Economic Development Director,
Patrick Blanchette was chiefly
responsible for the citys financial
crisis.
Interference/Lack of leadership
In the last two years, the Lawrence City
Council has raided the school building
construction account, the cash reserve
account and refused to raise fees,
permits and fines, contributing to
Lawrences dwindling cash flow.
The city has been hit with massive cuts
in state spending in the last two years.
At one point Lawrence took a $10 million
cut in state funding. Mayor Sullivan
restructured the budget to bare bones
with no layoffs in city personnel, but
further cuts in state aid, a lagging
economy, and a burst in the real estate
market have all lead to Lawrences
financial demise.
In addition to all that, Lawrence has not
held a stable Budget and Finance Director
in the last eight years. This was due to
city councilors abusing their authority
and threatening city workers with their
jobs if they did not comply with
political demands.
Former Budget Director John Griffin
resigned after a few short months in the
budget position, telling The Valley
Patriot that it was constant interference
and dirty politicking by Council
President Patrick Blanchette that lead to
him resigning. Griffin said at the time
that he was constantly being harassed and
bullied by Blanchette and other city
councilors to sign off on expenditures or
change budget numbers to suit their
political agenda.
Former Comptroller Jim
Limpiris told the Valley Patriot in May
of 2007 that Council President
bullied him into making expenditures he
felt were illegal. According
to the city charter, the Council
President has no authority over the day
to day operations of the city and only
has the authority to officially act when
at the council table.
Limperis says that on several occasions
he refused to sign off on city
expenditures that he found contained
very suspicious activity and
fell under the category of
excessive spending. According
to emails and memos obtained by The
Valley Patriot in 2007, Limperis refused
to sign off on non-union raises. He also
questioned how the city could legally
give raises to non-union workers when no
money was available in the city budget
and while collective bargaining was still
in progress with the citys 22 labor
unions.
Thats when Council President
Patrick Blanchette sent an email to
Limperis demanding that he not question
the expenses, stating:
Again, the city council voted to
appropriate money in the form of a
transfer. No other questions should be
asked. Lets stop with the games and
leave our difference at the door.
Unfortunately I think titles are going to
some peoples heads. Even though
signatures are needed - it does not allow
for people to be obstructionists. Also,
no need to involve someone from DOR
(Department of Revenue) in this city
matter. Lets keep our issues in our
own house.
Limpiris says that during the entire
seven months he was comptroller, he
routinely experienced harassment and
interference from Blanchette to approve
expenditures he felt were
illegal because there was no
funding source for Blanchettes
appropriations.
Lantiguas
New Economic Development Director?
Former Council President
Blanchette has not only
mismanaged the finances of the city of
Lawrence but has also mismanaged his own
personal finances. In early 2009, the IRS
put a tax lien on Blanchette for his
refusal to pay approximately $9,000
income taxes over a period of three
years. To date, Blanchette has not paid
his income taxes.
At the time Blanchette failed to pay his
taxes he was making $70,000 as a
conciliator in the industrial accidents
Board in Boston, $17,000 as the city
council president, had a free cell phone,
blackberry, an out of state travel budget
to go on junkets, free health insurance
and contributions to his pension.
Blanchette does not own a property, is
not married and has no children.
Lawrence Mayor Willie Lantigua has named
Blanchette to be his acting Economic
Development Director and will be largely
responsible for spending the additional
$35 million Deval Patrick is going to let
Lawrence borrow with the backing of your
state tax dollars.
CLICK for larger EAF Form
Where Blanchette signs off on his own
raise while city workers are being laid
off.
Conflicts of interest
Lawrences new mayor Willie Lantigua
appointed Blanchette to a city job in
violation of a state law that prohibits
elected officials in local municipalities
from taking city jobs in the communities
they served for at least six months after
leaving elected office.
Mass
General Laws Chapter 268A. states:
This section shall not
prohibit an employee of a municipality
with a city or town council form of
government from holding the elected
office of councilor in such municipality,
nor in any way prohibit such an employee
from performing the duties of or
receiving the compensation provided for
such office; provided, however, that no
such councilor may vote or act on any
matter which is within the purview of the
agency by which he is employed or over
which he has official responsibility; and
provided, further, that no councilor
shall be eligible for appointment to such
additional position while a member of
said council or for six months
thereafter. Any violation of the
provisions of this paragraph which has
substantially influenced the action taken
by a municipal agency in any matter shall
be grounds for avoiding, rescinding, or
canceling such action on such terms as
the interest of the municipality and
innocent third parties require.
Blanchette, who lost the mayors
race when it was learned that he refused
to pay three years worth of income taxes
to the IRS was legally responsible for
the citys budget according to the
city charter. When he left office on
Monday, January 4th, Blanchette left the
city with a $17.9 million budget deficit,
did not set a tax rate or balance the
budget as required by law.
Keeping the seat open for himself
Fired Economic Development Director
Thomas Schiavone was denied a contract by
Blanchette and the city council two
months before the end of Blanchette's
term. Schiavone had spent nine years on
the job without a contract. Blanchette
not only voted against Schiavone's
contract, but as the council president he
lead the charge to convince other
councilors to vote against Schiavone's
contract as well. Two months later, Mayor
Lantigua appointed Blanchette to
Schiavone's job, which was only vacant
because Blanchette himself denied
Schiavone a contract keeping the job open
for himself.
Schiavone, as well as other members of
the Sullivan team say they plan on taking
legal action against the city and have
already retained lawyers to represent
them in a lawsuit against Lantigua.
Blanchette/Councilors
took while services were being cut
At the same time the Lawrence Police
Union, Fire Union and laborers unions in
the of Lawrence were taking furloughs,
facing layoffs and losing benefits,
Patrick Blanchette and the Lawrence City
Council raised their own pay. In the six
years Blanchette has been president of
the council he has raised the city
council pay from $5,200 per year (times
nine councilors) to $15,000 per year with
a $2,500 bonus for the
council president himself. The
Lawrence City Council also had free cell
phones, blackberries, an out of state
travel allowance to go on junkets, free
health insurance and payments into their
pensions.
Three city councilor fought during the
last budget cycle to cut the
councils pay and reduce their own
budget, but Blanchette and his Budget
Committee Chairman Grisel Silva buried it
in committee and the proposal never saw
the light of day. During the subcommittee
discussion Silva said she would not
support a cut in the councils pay
because she could not afford to
take a furlough.
Since then Lawrence has laid off
essential personnel, reduced benefits for
city workers, cut staff, become slow to
pay vendors doing business with the city,
closed two fire stations, is down to one
food inspector and the city council has
yet to reduce their own pay, perks or
their budget ... even under the new
council.
Over their Heads
Two years ago the Lawrence City Council
was so bogged down with petty squabbles
and political agendas that they were
incapable of passing the city budget.
After three months of stalling a budget
vote, (then) Mayor Sullivan had to go
over their heads and get the city budget
Certified by the Massachusetts Department
of Revenue without a vote of the city
council. Councilors had violated
so many policies and procedures while
trying to hold up the Sullivan budget
that Sullivan had the legal footing to go
over their heads, in effect rendering
them irrelevant. City Councilors vowed
revenge against the Sullivan
administration for putting an end to the
dog and pony show that included screaming
fits, degrading members of the public
from the council table, berating city
employees and wild accusations about
conspiracies.
No End in Sight
Even if the Lantigua administration in
Lawrence gets the $35 million loan, that
will only go to pay for the current
operating deficit in city expenses. A new
budget cycle will begin July 1st, if the
new city council passes a 2010-2011
budget on time. That budget will include
additional cuts in state aide, increases
in pension and unemployment payments,
raises for union and contracted
employees, a lagging economy, a decrease
in local property tax revenue and the
expense of repaying a $35 million loan
that the state is allowing them to
borrow.
Lowell State Representative Tom Golden
(D), Lowell, and several other state
representatives on Beacon Hill have
already said they oppose giving Lawrence
a state backed, $35 million loan to cover
operating costs in the current city
budget unless there is an oversight board
and a receiver to control the money
Lawrences mayor will be allowed to
spend. Several reps. have predicted that
this would be bailout 1 for
Lawrence as the economic prospect for
Lawrences financial future is
going to get worse before it gets
better.
Governor Patrick and officials at the
Department of Revenue say that if House
Bill 4421 is passed without a receiver or
fiscal oversight board, Mayor Lantigua
and the Lawrence City Council will have
until January of 2011 to get their fiscal
house in order or face full receivership.
But some state officials like Karyn
Polito (R) Shrewsbury, say that is too
late with the financial crisis in the
state getting worse every day and the
deficit in Lawrence becoming
insurmountable to the point where
Lawrence is no longer solvent.
Mayor Lantigua has yet to name an
economic team or present a spending plan
to manage the citys finances, nor
has he revealed what he would do with the
$35 million if the legislature passes the
loan measure.
Related Story> Sweeney pens letter to
the ethics commission: As Deadbeat Dad
Lantigua admits getting ex-wife a job in
the Police department
Lantigua
Attorney likens firing employees to
Normandy Invasion
Tom Duggan is the president
of Valley Patriot, Inc., a former
Lawrence School Committeeman, and hosts
the Paying Attention! Radio Program on
WCAP, 980AM, every Saturday from
10am-1pm. You can email your comments to Tdugjr@aol.com
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