, Gloucester, MA

November 8, 2012

Editorial: City's 'free cash' primarily shows shortchanged services

Gloucester Daily Times

---- — It was just four short years ago that Gloucester was operating at a deficit.

And when the state’s Department of Revenue certified a Gloucester surplus revenue — or so-called “free cash” — account of $1.9 million for fiscal 2010, there was justifiable celebration that Mayor Carolyn Kirk had indeed turned around the city’s finances in just three short years in the City Hall’s corner office.

There were a few eyebrows raised last year, however, when — after a gut-wrenching budget season, complete with initial city wage and job cuts — the DOR confirmed the city had $3.2 million in unbudgeted surplus revenues. Yet, Kirk eased many fears when she used that money to hire another, unbudgeted firefighter and to funnel some $600,000 into the city’s schools.

This time, residents shouldn’t be so accepting.

The announcement that the city’s fiscal 2012 unbudgeted surplus or “free cash” figure has been certified at a cool $4.8 million might be seen by the mayor and a few other city officials as a sign of frugal financial planning. And that will, as we’ve all heard time and time again, help maintain or perhaps even improve the city’s bond rating — securing a strong credit rating and low interest rate for Gloucester when the city seeks financing for, oh, say, its share of a $25 million to $30 million new elementary school without going to the public for a referendum approval.

But there comes a point when hoarding up to $4.8 million — a full 5 percent of the city’s $87 million fiscal 2012 budget — isn’t a sign of securing Gloucester’s credit and borrowing margins. It’s a case of downright under-budgeting, in a way that deprives residents of services for which they contribute their hard-earned tax dollars.

Simply put, how can the city continue to keep two of its four fire stations – those in Bay View and Magnolia — closed on a far-too-regular basis, yet come in with a 5 percent budget surplus? That’s a question the mayor now has to answer — and one that city councilors and others need to start pressing now.

The biggest factor in “forcing” those closures remains the manning mandates within the firefighters’ contract, and the absurd need to fill out the department’s active roster on any given day by calling other firefighters in on overtime. That’s a long-standing problem that new Fire Chief Eric Smith has been brought on board to fix through a restructuring of the department or other changes — all of which must be bargained with the union, now headed by one-time acting chief Steve Aiello.

But any resistance to caving in to the union and funneling dollars into hiring more firefighters or covering overtime costs — at least on a temporary basis — loses a lot of steam and credibility when one considers that the city now has plenty of cash to likely keep all four stations open through the rest of the fiscal year. And the $4.8 million free cash certification, in that vein, sends a troubling message – that the political fallout over hiring firefighters or paying overtime takes precedent over residents’ very legitimate public safety concerns and needs.

Thankfully, some city councilors are considering that. Ward 1 Councilor Paul McGeary, while acknowledging that some of the surplus this year has come from potential one-time revenue gains that might not be assured in the future‚ like a six-figure profit turned over at the Dorothy Talbot Rink in its first year under the Department of Public Works and a new management structure. And at-large councilor Bruce Tobey makes an even stronger point — that Kirk and her team have “managed (city finances) too finely, and it’s time to re-calibrate.”

Despite occasional and stereotypical calls for officials to run the city like a business, the fact is, Gloucester isn’t a for-profit organization, and should concentrate on provided expected services rather than building “free cash” reserves, Tobey says — and he’s right.

The truth is, the mayor and council together must sit down and hash out how to utilize the newfound “free cash,” down to at least the $2 million mark. And all sides need to set new priorities, with realistic revenue projections that can deliver residents the services they have every right to expect.

That, after all, is what we’re all paying for.