News Column

City seeks $400K loan for St. Ann lease

June 24, 2014

By James Niedzinski, Gloucester Daily Times, Mass.

June 24--The mayor's office, seeking to end volleying over the cost of leasing the former St. Ann's school, is asking Gloucester'sCity Council to approve a $400,000 loan order authorizing City Hall to borrow for the project.

Mayor Carolyn Kirk, back in the corner office Monday after a two-week trip to Japan, said the proposal came from City Council President Paul McGeary when he was serving as acting mayor during Kirk's extended absence.

"I'm not going to overturn his recommendation at this point," she said.

The mayor would not comment on any contingency plans in case the loan authorization fails. State law requires loans to be approved by at least two-thirds of the City Council.

McGeary said Monday, however, that he doesn't see that requirement as posing a threat to the loan.

"We have to spend the money" he said.

Gloucester's administration, under Mayor Carolyn Kirk, signed an agreement with the Archdiocese of Boston in March to lease the former school so that current West Parish students can attend classes while a new school is being built.

The first year of the lease, which spans 18 months, carries a fee of $292,000. The second year is pegged at $168,000, with an optional third year included in the deal, along with an agreement for the city to cover some utilities' costs.

At first, the cost was set to come out of the Department of Public Works, which handles maintenance for city schools.

Then, former Chief Administrative Officer Jim Duggan -- who is now Dracut's town manager -- told school officials that the lease cost would be coming from the school budget.

School officials, however, balked at that, noting that it was Kirk, as mayor, who agreed to the deal, not the School Committee. They added that the school budget was already pegged to receive less than their requested amount as it was.

City officials also asked if the Massachusetts School Building Authority could reconfigure their loan to build the new school to include the lease costs. But, the MSBA wouldn't allow that change, according to a memo from Chief Financial Officer John Dunn to McGeary dated last Friday.

The council, meanwhile, agreed during final budget talks last week that the money would not have to come from the school budget, but it was not budgeted, either.

McGeary said the council was not exactly eager take the money from the DPW or school budgets, and that there was no great outpouring of opinions one way or the other. The lease has been in effect since March.

DPW Director Mike Hale said he was relieved that the cost of the lease is not coming from his department.

"There's nothing to cut in Public Works," he said.

He said his department carries a number of lease costs already, but he wasn't overly concerned with the possibility of tacking on another lease, either. He said there is simply not enough funding to go around.

"We barely can provide the core services that the constituents expect," he said.

Dunn said Monday that the $400,000 loan order would cover the entire cost of the lease, assuming the optional third year is not needed. He said the DPW took a $60,000 hit to make up for the $400,000 loan order and $460,000 in lease costs.

According to the loan order, the loan would cover costs to pay for building and furnishing the new school, as well as "acquisition or securing of space associated with housing students at a different, non-city-owned location" and costs associated with bringing St. Ann's up to par to suit current school needs. The former St. Ann School was shut down by the archdiocese last June because of declining enrollment.

The cost for building the new West Parish school is nearly $40 million, with the MSBA reimbursing about 59 percent of certain costs. Not all costs associated with tearing down the old school and building a new one, however, are reimbursable. McGeary said that even if the MSBA agreed to the new loan, it would not have been reimbursable.

The loan order is set to be presented tonight at the City Council meeting set for 7 at City Hall.

The financial route to the new West Parish school and other choices along the way have led to some vocal criticism from residents and officials alike.

Some wanted to use the former Fuller School for swing space, but the cost to rehabilitate the school temporarily was too high. For decades, the school has been largely vacant and has fallen into disrepair.

"Overall, I'm still disappointed we're not using Fuller," Ward 2 City Councilor Melissa Cox said Monday. Cox heads the council's Budget and Finance subcommittee and said the loan order is headed the subcommittee's way for is next meeting.

She said she doesn't necessarily approve of taking out a loan to pay for the lease, but these and other details should have been taken care of months ago.

"I'm adverse to paying interest on a long-term rental," she added.

Cox said Monday that she has other issues with the school's use of the former St. Ann's, as well. She said there was an understanding with Gloucester Superintendent of Schools Richard Safier that there would be no parking ban when school is back in session at St. Ann's, which falls in Cox's Ward 2.

Now, she said, the wheels are in motion to present a parking ban on Pleasant and Smith streets from 8:30 to 9:30 a.m. and 2:30 to 3:15 p.m.

"It boils down to the fact I was initially told there would be no parking restriction, and they have since gone back on their word," Cox said.

Cox said she finds the school district's request "very disappointing," considering the archdiocese had the school up and running with no parking restrictions. Safier could not be reached for comment Monday.

Cox said she is not opposed to restrictions that have the safety of children in mind, but parking in the tight-knit neighborhood is already hard to come by for businesses and residents alike.

Parking plans aside, city officials have been painted into a corner. The old West Parish school is set to be torn down relatively soon, and classes need to resume in September. The lease has been signed with the archdiocese for months, and the city is responsible for the cost.

"If we say 'no', where are the kids going to go in a month in a half?" Cox said.

James Niedzinski can be reached at 978-675-2708, or at jniedzinski@gloucestertimes.com.

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(c)2014 the Gloucester Daily Times (Gloucester, Mass.)

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Source: Gloucester Daily Times (MA)


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