The Eagle-Tribune
HAVERHILL, Mass. — To skeptics of Mayor James Fiorentini’s financial management practices, it’s the fabled pot of gold buried in the yard or perhaps more aptly a secret cache of money hidden somewhere in the mayor’s office.
For the second year in a row, the state Department of Revenue has certified that Haverhill’s coffers are overflowing with surplus cash — $7,367,732 to be exact.
And for the second year in a row, that news has sparked the imagination of city workers looking for pay raises and members of the public looking for tax relief, enhanced municipal services and necessities like a new middle school in Bradford.
The city’s firefighters, for example, have targeted the unspent money as a potential funding source for a $2.5 million pay raise they were recently awarded by a state arbitration panel.
But the mayor and city officials, including city councilors, say the money is not surplus at all.
Most of the money — $6.6 million — is from the water and wastewater departments and has accumulated over many years from water and sewer customers paying their bills, Public Works Deputy Director Robert Ward said. That leaves the city with $763,000 in legitimate surplus funds, down from $1.6 million last year, City Auditor Charles Benvento said.
Most of the water and wastewater money is earmarked for maintenance and capital improvements, with some of it held in reserve to keep the cost of water and sewer service from increasing too much in any given year, said Ward, who heads those departments.
City Solicitor William Cox has said it would be illegal, in most instances, for the city to use water or wastewater money for services or expenses not related to those departments.
Nonetheless, at last week’s meeting the council added new protections to prevent the water and wastewater money from ever being raided by the mayor or anyone else.
Councilors voted unanimously to make both accounts enterprise funds, a technical change they said will prevent the state from transferring any surplus water and wastewater funds into the city’s general fund ever again. Two firefighters sat in to listen to the council’s debate, but they did not speak and left the room once the outcome became apparent.
“This will cause us not to have any more problems with the Department of Revenue and not to be tempted with this money in the future,” Councilor Michael Hart said. “In the past this has caused people to get all excited about all this unspent money, but it’s money from customers paying their bills. It should be used to make sure the citizens have good water to drink and to take care of their sewage needs, and nothing else.”
If the money actually was surplus, Hart said the council would have used a portion of it to pay for temporary repairs to Hunking Middle School. Also at Tuesday’s meeting, the council approved a request from the School Department to borrow $400,000 to fix the troubled school.
“We didn’t use the water and sewer money for the school because that wouldn’t be right,” Hart said.
The one exception to how the water and sewer money can be used is that the city is allowed by law to take some of it to pay portions of the salaries of city workers who do work for the water and wastewater departments, such as public works, accounting, payroll and information technology.
In the past, some councilors have criticized Fiorentini for taking too many liberties with that provision. The most glaring example was two years ago when the mayor transferred more than $300,000 from water and sewer to the city that he said was to pay firefighters for clearing snow from fire hydrants.
To end those concerns, the city has hired a consultant to review the so-called “chargebacks” in time for the new budget that goes into effect July 1.
Public Works Director Michael Stankovich said the review is to include an independent assessment of how much the city should be taking each year from water and sewer funds as reimbursement for city services.
Benevento said the city had used the same accounting system for the water and wastewater departments for decades without problems, but that two years ago the state began declaring the money as surplus and transferring it to the general fund near the end of the fiscal year.
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