The Lowell City Council is now on its summer schedule of meeting every other week, however, the need to act on the FY2024 city budget prompted a special council meeting last Tuesday for the Council to formally receive City Manager Tom Golden’s proposed budget, and another special meeting on June 20 to hold a public hearing and then vote on the budget. (A regular council meeting will be held this coming Tuesday, June 13).
In presenting the budget, City Manager Golden effusively praised the Council for its “leadership” and “vision” and “wisdom” and a bunch of other adjectives I failed to write down. The budget represents a substantial expansion of city government and includes, among other things, six new positions:
A second First Assistant City Solicitor at $103,293 to $121,326 per year
A third Deputy Superintendent of Police at $121,656 to $142,935 per year
A Safety Officer/Recycling Coordinator in DPW at $87,730 to $103,010 per year
A Sustainability Director in DPW at $103,293 to $121,326 per year
A Social Worker in Department of Health and Human Services at $62,288 to $67,120 per year
An Office Assistant in the Parking Department at $45,470 to $53,281 per year
In addition, a report from the City Auditor on transfers from the City Manager’s contingency account shows a FY23 transfer of $75,000 to create a “new Communications Director position” and $100,000 to create a new “Lowell High School Facilities Director” position in DPW.
In the budget presentation, these new positions were placed in the context of “increased efficiency.” It’s easy to become more efficient when you add more employees. The challenge is becoming more efficient using existing or even fewer resources.
Unemployment is at historic lows and inflation is higher than at any time since the early 1980s. That means to attract and retain qualified employees you have to offer them more, and to allow existing employees to maintain or improve their standard of living, you need to increase their salaries in a way that accounts for inflation. But doing that costs a lot of money. You not only have current salaries, but for each employee, the city pays ever-increasing health insurance premiums and contributes to the pension trust fund in anticipation of the employee’s eventual retirement.
A slide in the PowerPoint presentation of the FY24 budget identified the following as “Major Fiscal Challenges.” Note that three out of five are driven by the cost of employees.
Increase in the pension assessment of $1.2 million
The average overall health insurance premium increase is 5.1% from the GIC . . . [which] represents about $2.04 million in additional cost
Increase in the Charter Schools assessment of $4.2 million
Personnel Cost [increase per collective bargaining agreements] of 2.5%, approximately $6 million
Increase in debt service of approximately $450,000
Even maintaining the existing workforce requires regular increases in revenue. Last fiscal year, property taxes increased 5.5% and this year the proposed increase is 2.5%. I accept that taxes should go up because the cost of the services we demand goes up as well. However, adding more employees to the city’s workforce risks pushing that delicate fiscal balance of salary costs versus revenue out of balance over the long term. It would have been reassuring to hear something like, “we’re creating this new position but to help fund it, we’re leaving vacant this other position which we can do because technology and better business practices allow us to deliver the same level of service with fewer resources.” Instead, we heard “the Council wants us to deliver more services so we’re going to add more employees to city government.”
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A legal notice in Thursday’s Lowell Sun caught my eye, mostly because of its size. It announced a foreclosure auction of the real estate located at 1 Merrimack Plaza in Lowell, which is the Edge Merrimack River private dormitory. The property is owned by Mack Canal LLC which purchased the 67,000 square foot lot in 2016 for $3,275,000 from The Lowell Five Cent Savings Bank which had its corporate headquarters on the site before moving to a new facility in Tewksbury. (Many would know this as the Fred C. Church property across French Street from Lowell High School).
The mortgage being foreclosed secures a $35,444,000 construction loan from Northern Bank and Trust to Mack Canal LLC that was executed in January 2017. The auction is scheduled for June 22, 2023, at 11am at the property. If you’re interested in bidding, you’ll need a certified check of $100,000 for the deposit.
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The U.S. Supreme Court released another case this week that indirectly affects the city of Lowell. As I wrote last week, the Court’s May 25, 2023, decision in Tyler v Hennepin County throws into question the Constitutionality of the Massachusetts law on tax lien foreclosures, and by extension, Lowell’s practice of auctioning tax liens.
This week, in Allen v Milligan, (No. 21-1086, announced June 8, 2023), the Court upheld Section 2 of the Voting Rights Act of 1965, the law that formed the basis of the 2017 lawsuit against the city of Lowell, the settlement of which gave us our current hybrid electoral mix of district and at large City Councilors and School Committee members.
The Allen case involved a challenge to a Congressional redistricting map created by the Alabama state legislature which purported to “dilute the political power of its Black residents.” In a 5 to 4 decision that shocked most Court observers, the majority found that the redistricting map did do what was alleged and sent the case back to the U.S. District Court for further action consistent with the opinion.
The reason this outcome was such a surprise is that the conservative majority of the court, particularly Chief Justice John Roberts, has been consistently hostile to the Voting Rights Act and has struck down many of its other provisions. The assumption was that this case would invalidate Section 2. That would be significant for Lowell because, even though the city’s case was settled, the U.S. District Court retained jurisdiction over the case and continues to supervise its implementation. If the underpinning statute that led to the settlement was held invalid by the U.S. Supreme Court, someone might try to revisit the Lowell decision and roll things back. As a practical matter, I think that would have been unlikely, even if the Supreme Court had gone the other way in this case, but now it won’t even be a hypothetical issue.
A couple of clarifications on tax levy increases. In FY2023 the increase was originally 5.5%, but in December another $900,000 was added for Fire O/T prior to setting the tax rate, making the increase approximately 6.1% for the year. For FY2024 the proposed increase. Is 3.5%.