Councilors Use ‘Rainy Day’ Money to Replace Hospital Debt Aid

Holy Family Hospital, Haverhill campus. (WHAV News file photograph.)

Haverhill city councilors last night moved to balance the current year’s city budget in light of the governor’s suspension of $2.4 million to pay debt associated with the former city-owned Hale Hospital.

By a 7-0 vote, councilors approved Mayor James J. Fiorentini’s request to move $2.4 million from the city’s stabilization fund to “general fund-miscellaneous, non-recurring, hospital aid.” The budget balancing is required before city can issue January property tax bills. Councilors William H. Ryan and Mary Ellen Daly O’Brien were absent.

“We worked very, very hard with all of you over the past few years to build up stabilization. You’ve heard me talk about this many, many times—the need to have a rainy day fund because sometimes it rains as it is tonight in more ways than one. This is what we the account for. Because we have a stabilization account, tonight we have a solvable problem. Without stabilization, we would have a crisis tonight,” Fiorentini told city councilors.

WHAV exclusively reported Nov. 24, the city may be dipping into its rainy day fund after Governor Deval Patrick placed the $2.4 million in state funds on hold.

According to Fiorentini, when the Hale debt aid is released, it would be used to restore the stabilization fund. “If Representative Dempsey is able to get us the $2.4 million back, and I have every confidence in him, then we’ll replenish stabilization. In the event that he isn’t able to do it, state revenues fall or something happens, then we’ll replenish it when we get free cash,” Fiorentini said.

As reported Tuesday by WHAV, representative Brian S. Dempsey of Haverhill, House Ways and Means Committee Chairman, said the House is planning to push forward a plan this month that may very well incorporate an idea popular with the GOP for a corporate tax amnesty program to try to collect unpaid taxes.

Councilor William Macek, who moved the motion for approval, complemented the mayor for “sound fiscal responsibility” over past years and called his plan “right on point.”

“We are fortunate that through your sound fiscal responsibility over the past years we have the money to dip into. I believe that with Representative-Chairman Dempsey, there will probably only be a temporary setback, and I think that hopefully we will be able to recover that money,” Macek said.

At the request of Councilor Michael S. McGonagle, the council will also send a letter to the administration asking for a review of dormant city accounts, in anticipation of an upcoming certification of free cash. Mayor Fiorentini said he anticipates free cash certification would happen in February.

“When we did decide to take $600,000 to pay down our tax debt, we took it out of a couple of accounts – overlay reserve, and agency fund-tailors. I’d like to do a review, or I’d like to get for the whole council, an idea of how many other accounts are sitting dormant. That’s a lot of money, and I’ll be honest, those are two accounts I have not heard of,” McGonagle said.

Dempsey has delivered more than $16 million to the city since the former city-owned hospital went deep into debt and was sold. Typically, the city has drawn down the state money once the city passed a budget and once the governor signs the state budget. The city passed its $168 million budget in June and Patrick signed the state budget in July.