City Appeals to State For Help Paying $11 Million Hospital Debt Next Year

Gov. Charlie Baker swears in Rep. Andy Vargas last Nov. 15. (Courtesy photograph.)

As Haverhill worries about making $11 million in payments next year on the former city hospital’s debt, Haverhill Mayor James J. Fiorentini is appealing to the state for help.

Two weeks ago, the mayor asked Gov. Charlie Baker and members of the city’s legislative delegation to continue setting aside money to make payments related to the former Hale Hospital.

“It is extremely difficult for us to balance our budget and provide basic services when the first payment we have to make every year is to pay the debt on a hospital that we no longer own or have any interest in,” Fiorentini wrote in letters to Baker; Rep. Leonard Mirra, whose district includes the former hospital; and Rep. Andy Vargas.

By the time the hospital closed in 2002, the city accrued $95 million in debt, described by Fiorentini as “easily the largest municipal debt in the history of the Commonwealth.” The mayor argued the city should not bear the entire burden since 30 to 35 percent of the patients were from outside of Haverhill.

Vargas told WHAV he is lobbying his Statehouse colleagues to continue making a special allocation.

“We’ve been working hard, meeting with folks in leadership, to express how pivotal this funding is, and I asked the mayor to put together a summary of the debt in order to help us further make the case,” Vargas told WHAV.

Former state Rep. Brian S. Dempsey, chairman of the powerful Ways and Means Committee, had delivered an extra $2.4 million annually during six of the last seven years. Fiorentini said the $11 million the city owes in the year that begins July 1 covers the cost of the new hospital, which opened in 1984; about $40 million in operating losses; and employee healthcare and pension costs. While the building is nearly paid off, others costs are climbing as former workers become eligible to retire.

In a special note to Baker, Fiorentini thanked him for being the “first governor who did not veto any of those payments, and we thank you for that.”

As a newly elected representative, Vargas told WHAV his work is cut out for him. “It is certainly an uphill battle for us given that no freshman has been able to bring home this amount of money for their district,” he said.

Haverhill took over the Hale Hospital from a private group in 1931, made improvements at its Buttonwoods Avenue buildings during the 1960s and finally began construction of a new Lincoln Avenue hospital in 1981. Fiorentini said the city received no money for the business or property when it was transferred to Essent in 2002. Today, the property is owned by Holy family Hospital.