In autumn of 1991, the long running fiscal problems in Chelsea came
to a head, and the local government, in effect, was suspended. By the
summer of 1991, Chelsea’s financial outlook was very bleak. On June
11, after determining that the city would not have sufficient money
to meet upcoming payrolls, Mayor John Brennan requested assistance
from Peter Nessen, the Commonwealth’s Adminstration and Finance
Secretary. In response, Nessen convened a panel of experts, chaired
by Eric Kriss, the state’s Chief Financial Officer. The panel found
that Chelsea was operating under a structural deficit of over $9.5
million on a $41 million budget, and could not increase revenue
without an increase in property tax and was unable to significantly
reduce costs. Factors contributing to the city’s structural deficit
were beyond the city’s control and poor management on the part of
city government had compounded the problem. After years of increased
state intervention and assistance, the city was still slipping
further into debt. Government corruption was so bad that FBI
investigations eventually led to the arrest of three former mayors,
with Brennan being granted immunity after confessing to wrong-doings.
Several desperate attempts had been made to both reduce expenditures
and raise revenues to keep the city afloat. The board of Aldermen,
however, rejected budget reductions and the voters in April rejected
a $2 million budget override.
As far back as the 1970’s, the city was suffering from serious fiscal
problems. The problems were so severe that the federal government
considered a plan to remove the entire population of the city and
turn the entire city into an industrial park, to be annexed to the
City of Boston.
On September 4, 1991, the state finance control board, which had been
overseeing the financial dealings of the city, rejected Chelsea’s bid
for an emergency one-month budget. The board’s decision left the city
with no authority to spend any money. The next day, Governor William
Weld proposed an unprecedented bill that removed the mayor from
office and called for all other elected officials to serve merely as
advisors to a state appointed receiver. The bill appointed the
receiver for a minimum of two years, and as long as five years. The
receiver was given the power to undo city contracts, revamp zoning
regulations and increase city revenues by imposing new fees on
residents, or raising existing ones. With the schools closed, due to
lack of funds to pay teachers, Weld filed the bill with a request
that it be enacted within 48 hours. The bill quickly passed the
legislature, and on September 12, 1991, Weld appointed James Carlin
as the first receiver of the City of Chelsea.
The first step facing Carlin was to get the schools open. After
accomplishing this attention quickly turned to cutting expenditures
in other areas. One of his most contentious decisions was to make
cuts to the fire department, something that could not be done under
the city’s previous government. By his third day on the job, Carlin
had set a moratorium on overtime for firefighters. He then
restructured the city’s union contract, reducing the city’s annual
overtime bill for the fire department from over $1 million to less
that $250,000. Carlin also cut the number of firefighters on the
force to be more proportional to the size of the city. The
firefighter’s union sued after and arbiter found that Carlin had
violated the minimum staffing clause in the firefighter’s contract. A
Superior Court judge threw out the case, citing the fact that the law
empowered the receiver to restructure such contracts. The next step
for Carlin was to crack down on those not paying for city services.
The city was losing a temendous amount of money due to unpaid water
and sewage bills. In order to accomplish this Carlin ordered the city
to send cut-off notices to all businesses
that did not pay. He used the same aggressive approach with real
estate taxes, by moving to quickly foreclose on delinquent
businesses. The result was that the money started coming in. After
one tumultuous month in office Carlin managed to balance the budget
although it would take six more month for his plans to be completely
enacted. After the first year, Carlin made plans to step down. He
handed over the reigns to his deputy Lewis H. Spence. Spence became
the second receiver for the City of Chelsea. Spence took a more
methodical approach to building the city back up. He oversaw two
consecutive budget surpluses in 1993 and in 1994, an occurrence that
would have been impossible a few years earlier. It was also under
Spence’s watch that the city received $250 million in state funds for
construction projects such as the courthouse and the first public
schools built in the city since the turn of the century. Spence also
struck a reconciliatory note with the community by hiring eight
Hispanics to the police department, as well as several other
Hispanics to positions within City Hall. Spence also began hiring
many of the firefighters laid off by Carlin, in an attempt to improve
relations before returning the city to self rule. The last year of
his three year tenure was spent mostly focusing on the process of
creating a new city charter and government that would resist a slip
back to the days of corruption and debt. Out of that year of planning
between Spence, his staff and a Charter Committee came a charter
which featured a powerful city manager that is charged with the
day-to-day operation of the city and an 11-member city council, that
sets policy for the city manager and is
responsible for the hiring and firing of the city manager. The
new charter paints a clear line between roles and offers several
safeguards against a slip into the corruption of the past, including
a provision anyone convicted of any crime is ineligible from serving
in the city government.
Under the new Charter for the City of Chelsea, Guy Santigate was
selected by the City Council to become Chelsea’s first city manager.
Selected in July of 1995 and resigned in June 2000. In 1962, at age
22, and in his junior year at Suffolk University, he decided to enter
politics and was elected alderman of ward 1. The first Italian in a
predominately Jewish district. Three years later he was elected
president of the board of alderman. In 1969 he ran for mayor as the
odds on favorite against Phil Spellman, Joe Margolis and Tony
Maresco. Margolis won a surprise victory. 11 months later Margolis
died and a special election was called. Santigate decided not to run.
From 1972 to 1995 he was on the Board of Assesors. With the advent of
receivership in 1991, he became a one man board. In 1995 the new city
charter created the position of city manager. He was one of 60
candidates to apply. An outside panel narrowed the list down to four
and the city council finally decided on Santigate.
On July 10, 1995, the City Council, by a vote of 7-4, elected
Santagate as the city’s first city manager. He was sworn in in August
of 1995 thus ending the state receivership that had disgraced the
city. During Santigate’s tenure the city budget was balanced and
generated surpluses for each of the five years. Chelsea’s credit
rating was improved and in 1998 Chelsea was one of 10 communities to
be designated an “All-American City” by the National Civic
League. He was instrumental for major development projects in Chelsea
like the Kayem Foods and Pillsbury Foods expansion and the
construction of the Wyndham Hotel. He implimented a comprehensive
Capital Improvement Program spending millions of dollars on roadway
repair, sewer reconstruction, open space maintenance, and vehicle
acquisition. He led the effort to extend the Chelsea/BU partnership.
Under his administration seven new schools were built and an eighth
was renovated.
Santigate created the Chelsea Historical Commission in 1998 in an
effort to preserve Chelsea’s rich history. He resigned from office in
June of 2000.
