, Gloucester, MA

December 3, 2012

Kirk: State of city is 'sound'

Mayor focuses on fiscal strength

By Marjorie Nesin
Staff Writer

---- — GLOUCESTER — The state of the city is “absolutely sound.”

That was the theme of Mayor Carolyn Kirk’s annual State of the City presentation Monday night, when the mayor touted a solid fiscal status built on a solid budgeting, a declining level of debt service and energy savings that will stem in part from the city share of the wind turbine project still taking shape at Blackburn Industrial Park.

Speaking to about 100 people in City Hall’s Kyrouz Auditorium, Kirk mapped out Gloucester’s economic success that has been key to adding city infrastructure, innovation, and an ability for the city to invest in capital improvements, reserves, future liabilities and city services.

”Without a strong, stable city, nothing else gets done,” Kirk said in an interview prior to Monday night’s presentation.

The city’s general fund debt is retiring, and now at a level of just over $2 million for 2013. It is expected to factor in at about $1.4 million in 2017, according to Kirk. And, said Kirk, the administration intends to cap that debt burden at today’s level just over $2 million, so as the debt continues to be retired, the excess money set aside each year can be used to initiate capital projects, like work on the proposed new or renovated West Parish School.

In 2014, the amount in excess will total in at about $500,000, the mayor’s report indicated. The city is also eyeing a projected $450,000 in annual municipal electrical cost savings, after having installed wind turbines this fall. Kirk has earmarked money previously budgeted toward municipal electric bills to fund a joint city police and fire safety building.

”Gloucester has come through the roughest economic period in generations and emerged with firm control over our destiny,” Kirk said.

This year, Gloucester touted $4.8 million in so-called “free cash,” or unspent and unbudgeted money for the previous fiscal year.

Some criticized that the “free cash” represented a budget that was too frugal. But, Kirk said, $1 million of that “free cash” came from savings during a nearly snowless winter of 2011-2012, and Kirk sited another $1.3 million as money that could not have been budgeted because the money, coming in from tax titles and licensing fees, is unpredictable revenue.

Budgetable or not, Gloucester’s bounty of “free cash” allowed the city to invest $2.7 million in its emergency fund, ensuring the city has at least 5 percent of the operating budget held in reserve, Kirk noted. That helped earn the city a Double A rating from Moody’s Investors Service. The Double A rating, signifying “high quality by all standards,” gives the city a better interest rate for capital projects.

Kirk emphasized that the community as a whole is bearing financial responsibility to come into compliance with the Clean Water Act, with residents paying in at water and sewer rates increased by about 2 percent in fiscal year 2013. But, the rate remained about 10 percent less than the high that peaked in fiscal 2010. Kirk said the rates were “due to long overdue capital projects and mandates from the state and federal governments.”

On that front, Kirk’ report noted that the city is rebuilding the Plum Cove water tower at a cost of $2.5 million, replacing “aging” water mains in Annisquam, as well as upgrades to the treatment plants, and undergoing a $20 million upgrade on the Sewer Treatment Plant.

Kirk was also set to take time late Monday night to answer questions, with the help of city officials, and highlight other recent city development achievements.

Kirk credited Gloucester’s residents and volunteers with leading much of the community development, including private investments in the Fisherman’s Wharf and BASE seafood auction, increased public access around the working waterfront via the HarborWalk, and the development of cultural districts.

Kirk also pointed to community preservation projects, like the City Hall Restoration, the Cape Ann Museum and the Sawyer Free Library, as completed development, thanks to the help of volunteers and residents, noting the Newell Stadium “renewal” project as a classic public-private partnership as well.

”We’re defining our own future,” Kirk said.

For more coverage of Monday night’s presentation and audience response, look to updates later today at, and to tomorrow’s print and online editions of the Gloucester Daily Times and

Marjorie Nesin can be reached at 978-283-7000, x3451, or at