Haverhill’s Historic Debt and Pension Liability Top Council Agenda

Haverhill City Councilors in session at the Theodore A. Pelosi Jr. City Council Chambers. (WHAV News file photograph.)

Haverhill’s long-term debt of more than $78 million, and what to do about it, is one focus of Tuesday’s City Council meeting.

Mayor James J. Fiorentini is expected to address the public about the lingering effects of the failure of the city-owned Hale Hospital almost 20 years ago. In his request to speak to councilors, the mayor called the liability “the largest municipal debt in the history of The Commonwealth.”

According to figures released last summer, the city still owes $4.5 million on deficits related to the hospital. The remaining debt is related to school construction, water and sewer costs and other borrowing.

Fiorentini said he specifically wants to discuss “continuing state aid.” Over the years, former state Rep. Brian S. Dempsey delivered $22 million in additional state aid to help pay down the hospital debt. Last year, freshman Rep. Andy X. Vargas was able to obtain $340,000 in Special City Aid—considered substantial for a legislator of then only five months. However, it was far from the $2.4 million Dempsey, once chairman of the powerful Ways and Means Committee, obtained most years.

The city previously justified seeking state help to pay down the losses because the hospital served a region much larger than the city. Haverhill sold the hospital to Essent Healthcare, the only bidder, for a $3.5 million. Haverhill retained construction debt and employee pension and health insurance liabilities and settled its lawsuit against Quorum, its outside management company, for $2.8 million. The city acquired Hale Hospital in 1931 when its then-private owners declared the business insolvent. The city made various improvements to a series of buildings on Buttonwoods Avenue before building and opening a new campus in 1984 on Lincoln Avenue.

City debt figures do not include the estimated $165 million to cover previous and future retiree pension, including those accumulated by the Hale Hospital. Council President John A. Michitson is also expected to address the Council on what he termed, “Haverhill’s large retirement debt.” He is asking for an action plan.

In other business, Council Vice President Thomas J. Sullivan and Councilor Colin F. LePage plan to introduce School Committee members Gail M. Sullivan and Richard J. Rosa to discuss a resolution, urging the legislature to “approve and fully fund a new foundation budget formula by May 1.”

The meeting takes place at 7 p.m., Tuesday, in the Theodore A. Pelosi City Council Chambers on the second floor of Haverhill City Hall.

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