State Relieves Medford of $1.2M Debt
City used the funds to save 20 jobs in the fiscal year 12 budget.
On Thursday the City of Medford the elimination of $1.2 million of debt as a result of Gov. Deval Patrick signing Senate Bill 2474 into law.
According to a statement posted on the city website, the bill will prevent Medford from having to repay $1.2 million taken from the Water and Sewer surplus of $6.5 million in 2011.
The bill was sponsored by state Sen. Pat Jehlen and state Reps. Paul Donato, Carl Sciortino and Sean Garballey. The bill came as a result of a home rule petition by Mayor Michael McGlynn and Medford City Council members.
"This was in order to save approximately 20 jobs and secure city services in the fiscal year 12 budget,” McGlynn said in the statement.
McGlynn said borrowing from the surplus is allowed under state law.
"However, an amendment to Medford’s original home rule petition required the city to repay the enterprise account, and therefore negating the intent of the petition," he said.
He added it didn't make sense to add funds to replenish the account.
"Moody’s Bond Rating Services have urged us to eliminate excess debt and continue to rebuild our reserves," McGlynn said. "Medford presently maintains an A1 bond rating with a recently upgraded positive outlook."