By THOMAS GRILLO
LYNN — Mayor Judith Flanagan Kennedy delivered some good news to the city council Tuesday night on the state of the city’s finances.
“We will avoid any layoffs and tax increases for the rest of this fiscal year,” Kennedy told the council and a packed chamber.
In a rare appearance requested by the 11-member panel earlier this month, Kennedy spent more than two hours explaining that she has the city’s budget woes under control. Much of the problem, she said, was an accounting error over the number of school retirees who receive health care benefits.
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In response to questions posed by the council, Kennedy said while she didn’t create the financial problem, it is her responsibility to fix it. She acknowledged the frustration by the council who have heard wildly varying estimates of the deficit from $1.3 to $7.5 million from administration officials.
Her most recent calculations put the deficit at $1.8 million and the mayor outlined a series of steps on how to fill the hole. About $1 million will be shifted from the so-called overlay account, the $400,000 for a new fire truck that has been purchased can be moved to the 2017 fiscal year budget; there will be a $250,000 savings for a lower cost liability insurance; and $50,000 has been saved on fuel costs given the lower price of gasoline.
Kennedy said a hiring freeze will be kept in place. The only new employees will be paid from grant money, she said.
“We will not approve any new hires from the general fund until we are back on solid ground,” she said.
Kennedy also noted that every purchase order — even amounts under $25 — must be approved by her office or by Peter Caron, the city’s chief financial officer. Any overtime for City Hall employees must receive prior approval, she added. Overtime for public safety employees will also be monitored.
“We will keep a close eye on every dollar being spent,” Kennedy said.
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The mayor also asked the council to reconsider an earlier vote for an election commissioner.
She cautioned that arbitration is underway that will decide the contract for the firefighters with International Association of Firefighters Local 739. She said if the Joint Labor-Management Committee comes up with raises that are higher than the ones recently given to the police union, she may be forced to close a firehouse.
Earlier this year, the police union settled on a retroactive agreement that provides a 1 percent boost for 2014, a 2 percent increase for 2015, 2016 and 2017 and a 1 percent raise for 2018.
Councilor-at-Large Buzzy Barton, a retired firefighter and former president of the firefighters’ union, objected to the closing of a firehouse. “The public and the firefighters will be at risk,” he said.
Ward 1 City Councilor Wayne Lozzi praised the mayor for coming to the council and explaining the city’s financial situation. Still, he raised a question as to why previous school budget surpluses prior to her becoming mayor were as much as $10 million.
“A month ago, the financial picture wasn’t rosy and I’m glad you came here to explain,” he said. “But you detailed a lot of steps you intend to take and that’s what a mayor needs to do.”
In other matters, the council’s five-member Personnel Committee chose three finalists to replace Mary Audley as city clerk. The full city council is expected to make its choice next Tuesday.
Former city councilor and attorney Timothy Phelan received three votes, Andrea Crighton, who has worked as a clerk in state Senate on Beacon Hill for 11 years and is the wife of state Rep. Brendan Crighton, received one vote and Assistant City Clerk Janet Rowe, who has worked for a dozen years under Audley, received one vote.
The other candidates included Mary Gokas, head clerk in the City Clerk’s office, Karen Richard, administrative assistant in the clerk’s office, Paul G. Smith, a Nahant attorney, and Stanley Slepoy, a Massachusetts Department of Transportation employee.
In addition, attorneys for four medical marijuana companies presented their plans to open a clinic in the city.
The applicants include New England Patient Network Inc. of East Boston, Marblehead-based Old World Remedies, NS AJO Holdings Inc. of Colorado and the Massachusetts Patient Foundation, which operates facilities out of state. Mayor Judith Flanagan Kennedy and the council have said the city will accommodate one or two clinics.
The Massachusetts Patient Foundation said they hope to open a dispensary at either 475 or 487-491 on the Lynnway. They promised the city 4 percent of gross revenues, with a minimum of $100,000 and a maximum of $750,000.
The New England Patient Network Inc. proposed a 12,700-square-foot facility at 497 Lynnway and to turn the Lynnway Sportscenter into a medical marijuana clinic. They did not provide details on the full amount they would pay the city in a host agreement. The application said they would contribute $50,000 annually to the police to offset the cost for patrols.
NS AJO Holdings Inc., which has a clinic in Colorado, plans to open a 6,000-square-foot facility at 1069 Western Ave. Under a proposed host agreement, the firm would provide the city with $200,000 annually or 6 percent of gross revenues, whichever is greater.
Marblehead-based Old World Remedies plans to open a shop at 953 Western Ave. Under the terms of the application, all profits would be donated to Trouble the Dog, a local nonprofit that benefits children. They dd not detail potential payments to the city.
Massachusetts voters legalized medical marijuana in 2012. Marijuana for recreational use was approved in November’s elections.
Thomas Grillo can be reached at [email protected].