LYNN — The City Council approved a $319.5 million fiscal year 2019 city budget on Thursday night, which came after a months-long struggle to balance the budget.
On the heels of the City Council approval, the School Committee approved a $147.2 million school budget later that night, which includes no layoffs.
Mayor Thomas M. McGee, chairman of the School Committee, said the FY19 balanced budget, which includes the school budget, fully funds the city’s net school spending requirement, the city’s share of healthcare costs of $47.3 million, the first soon-to-be-hired full-time chief financial officer, and essential public safety staff, including the possible hiring of 20 new firefighters pending the awarding of a federal grant and 10 new police officers, along with a $300,000 increase for snow and ice removal.
To achieve a balanced budget, city officials had to dig themselves out of a financial hole through legislation, a home rule petition that was approved earlier this year by the City Council, state legislature and signed off on by Gov. Charlie Baker, that allowed the city to borrow up to $14 million to close their budget deficit.
McGee said the city had to borrow $9.5 million this year to balance the city’s FY18 budget and is still borrowing $4 million for the FY19 budget.
“Obviously bonding is not the ideal situation to address operating expenses, but we were faced with a problem that needed to be solved immediately for the sake of the city,” McGee said. “We came to the conclusion that legislation was the best and only option.”
McGee said the FY19 budget begins to pull the city out of its current fiscal situation, but the problem is not something that’s going to go away overnight.
“We need to continue to be diligent not only in the near future, but how we position the city for years to come,” he said. “Part of those solutions are hiring a chief financial officer, increasing public safety staffing levels, updating our capital plan, and being more aggressive in seeking out economic development opportunities, both commercial and residential, all the while ensuring that our city continues down the path to fiscal stability.”
McGee said hiring a full-time chief financial officer to replace retiring CFO Peter Caron is the most important vacancy the city has to fill. The search process is ongoing and has been narrowed to three candidates — the anticipated salary for the position is $155,000 to $165,000.
The 20 new firefighter hires are contingent upon receiving a Federal Emergency Management Agency (FEMA) Staffing for Adequate Fire and Emergency Response (SAFER) grant — the grant would cover 75 percent of the cost, with the city picking up the remaining 25 percent, McGee said.
He said the city has also applied for and hopes to receive hardship consideration, which would pay 100 percent of those costs. If the city does not receive the grant, he said the fire department’s budget would have to be adjusted to reflect the current contractually obligated staffing levels, including overtime costs.
Even with the $300,000 increase in the snow and ice removal budget, the city is still expected to spend over that budget line as it does every year, McGee said.
The budget includes hiring a fourth attorney in the city’s Law Department, an additional health inspector in the city’s Inspectional Services Department, and an additional class 3 employee in the Department of Public Works.
McGee said achieving a balanced budget came after six months of struggle, working with the City Council and state officials in trying to deal with last year’s budget while trying to put together a budget for FY19.
“This budget isn’t ideal, but we worked to make sure the people of Lynn have access to the services they need,” McGee said. “We need to ensure the city’s fiscal responsibility today in order to ensure fiscal responsibility and growth for the future.”
Sean Cronin, a state official with the Department of Revenue who has been advising the city on its budget, recommended that the city look into developing a professional planning staff.
Cronin said the city was heading in the right direction with its budget, but predicted that the FY20 budget process would be a lot more challenging because the city won’t have the deficit funding available anymore to borrow through the legislation.
“It’s been a tough year,” said City Council President Darren Cyr. “I hope the public sees how hard we’re working to make sure we take care of our budget issues.”
The School Committee approved its budget following no discussion, which fully funds net school spending and is actually $2 million above the district’s net school spending requirement.
Chapter 70 of the general laws establishes a net school spending requirement for each Massachusetts school district. Failure to comply with this requirement may result in non-approval of a municipality’s tax rate, enforcement action by the Attorney General, or loss of state aid, according to the state Department of Elementary and Secondary Education.
In recent years, the city has struggled to meet its net school spending requirement. In FY16, the city was short by about $800,000, and was penalized. The struggle dates back to FY13, when officials were erroneously counting teacher retiree health insurance as an allowable cost toward net school spending and were playing catch up until last year, officials said.
At both the City Council and School Committee meetings on Thursday night, Superintendent Dr. Catherine C. Latham, who is retiring after nine years in the position, was honored. The City Council presented her with a citation of recognition and the School Committee presented her with a gift.
Latham said it’s been an honor and a privilege to serve as superintendent.
“I’m just the superintendent, but there’s such an amazing group around me — administrators and the principals and the fabulous teachers who have put us in a wonderful position right now,” she said.
