City Pleads with Governor for Continued State Aid to Pay Hale Debt

Rep. Brian S. Dempsey (left) and Gov. Charlie Baker. (WHAV News file photograph)

City councilors hope a letter to Gov. Charlie Baker will add weight to the city’s campaign for up to $2.4 million to help pay its 2019 debt payment on the former Hale Hospital.

In six of the last seven years, Haverhill has received aid payments ranging from $500,000 to $2.8 million. Former Rep. Brian S. Dempsey, chairman of the House Ways and Means Committee, received much of the credit due to his influential position.

After his resignation last year, city officials expressed concern that the state aid Haverhill has counted on to offset its $11 million to $12 million annual Hale debt payments would be in jeopardy.

City Council Vice President Thomas J. Sullivan said the plea to Baker adds the council’s support to the city’s legislative delegation and mayor as they work to ensure Haverhill continues to receive state support.

“The state has understood the unique situation the city of Haverhill is in,” Sullivan said, quoting the text of the letter. “It’s very difficult to balance our budget and provide services when the first payment we have to make is $11 million or $12 million for the Hale debt.”

Council President John A. Michitson put the city’s need for the state’s financial support in perspective.

“I think it’s clear to all of us in government that we need this funding desperately,” he said. “We have more families struggling and we need to help them through public education, and we have a large burden on public safety.”

Michitson said the city’s practice of taxing below its allowed levy limit hurts its credibility when it comes to claiming financial need.

“Over the last several years we came in under the tax levy, which sends the wrong message to the Statehouse when we are asking them to send us $2.4 million,” he said.

In 2001, the city sold the failing Hale Hospital to Essent Healthcare for $3.5 million, but took on a combined  $95 million in debt, which includes pension and health insurance for hospital employees. City officials agreed to the deal in exchange for keeping a hospital in the city.

Every year since, Haverhill has paid debt service ranging from $7 million to $12 million. The debt will be retired in 2023, but the city will continue to be responsible for hospital employees’ health insurance and retirement benefits.