Kennedy Outlines Plan to Handle City Deficit

December 16, 2016
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By Joseph Domelowicz Jr.

Mayor Judith Flanagan Kennedy addressed the Lynn City Council on Tuesday night, accompanied by Chief Financial Officer Peter Caron and outline her plans for closing a projected budget deficit in the current fiscal year.

“We will avoid any layoffs and tax increases for the rest of this fiscal year,” Kennedy told the council during a rare, two-hour visit to the body.

According to Mayor Kennedy much of the current financial predicament was caused by an accounting error, specifically in determining the number of school retirees who receive health care benefits.

Originally, the city Treasurer Richard Fortucci used actuarial accounting method to account for the number of retired school workers who receive city health benefits. However, a recalculation, based on the actual head ocount of teachers receiving those benefits helped to reduce the budget gap. The earlier calculation had 1,043 retirees getting benefits, but the headcount a few weeks ago determined the number was closer to 970.

Mayor Kennedy, who received a number of written questions form Councilors about the deficit, prior to her appearance on Tuesday night, told the Council that while she didn’t create the financial problem, it is her responsibility to fix it.

She also acknowledged the frustration of councilors and residents, who have heard a variety of different estimates of the deficit from $1.3 to $7.5 million from administration officials.

Kennedy told the Council that the most recent calculations put the deficit at $1.8 million and she then outlined a series of steps on how close the gap.

Those steps include: $1 million to be shifted from the city’s overlay account; $400,000 for a new fire truck will be moved to the 2018 fiscal year budget; $250,000 in savings from a lower cost liability insurance will be applied to the deficit; and another $50,000 in savings from lower fuel costs.

The Mayor also indicated that the current hiring freeze will be kept in place, with the only new employees being those who can be paid by grant funds.

“We will not approve any new hires from the general fund until we are back on solid ground,” said the Mayor.

She noted that the city is also now requiring that every purchase order must be approved by either her office or by Caron and said that any overtime for City Hall employees must receive prior approval. Overtime for public safety employees will also be monitored for the remainder of the year.

“We will keep a close eye on every dollar being spent,” Kennedy said.

The mayor also asked the council to reconsider an earlier vote for an election commissioner and cautioned that arbitration is underway with International Association of Firefighters Local 739. 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 take other steps, including the possible closing of a firehouse.

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