Fiscal Crisis Continues for Older Cities Like Chelsea, Mass.

ON one of the first warm days of a chilly New England spring, a contingent of state officials gathers outside the Chelsea City Hall to announce an important community initiative.

This formerly cash-strapped city, run by a state receiver for the past seven months, will be getting a $1 million federal grant to be used for fighting crime and revitalizing neighborhoods.

Like many depressed cities across the United States, Chelsea has a population with a high demand for services and not enough money to pay for them.

According to Doug Peterson, senior policy and legislative counsel for the National League of Cities, munincipalities that have struggled with similar fiscal emergencies include Philadelphia, East St. Louis, Ill., and Bridgeport, Conn. Other cities in Massachusetts, California, and Michigan have also had to contend with budget crises, he says.

Chelsea, a 1.8-square-mile urban community, troubled by crime, drug trafficking, and ethnic tension, was the subject of considerable media attention when it was forced into state receivership seven months ago. At that time, the city was unable to pay off a $9.5 million deficit.

But some Chelsea residents aren't happy about what is happening to their city. Indeed, despite much progress, residents here have mixed reactions about the outside forces that seem to dominate their community.

The local school system, for example, is managed by Boston University. A team of state officials now runs City Hall. And numerous federal and state officials will be monitoring the new anticrime program.

City officials, in particular, don't take too kindly to the way the state receiver's office operates. Under special legislation filed by Gov. William Weld (R) last fall, the office of mayor has been abolished. City aldermen have only an advisory role. The state receiver is expected to remain in office for five years.

"They're making laws here and telling us what we have and what we need," says James Constantino, a city alderman at-large. "I think they need more input from the people that live here."

THER residents, however, say they feel Chelsea needs as much support as it can get. Harry German, a Chelsea native and school committee member, says the city has benefited a great deal from the new state receiver. He also applauds the new anticrime initiative.

"Unfortunately, I think more and more cities [are finding] that while the services are necessary, the cost of providing them are beyond their capacity," Mr. Peterson says. "The recession has just put a lot of cities over the edge."

But back in Chelsea, things are getting under control, says the city's state-appointed receiver, James Carlin. He says he has balanced the city's fiscal 1992 and 1993 budgets, no easy task. That balancing act required drastic cuts, layoffs, and eliminating overtime work. The city also received a $5 million payment from the Massachusetts Port Authority.

The program here, called "Weed and Seed," aims to "weed" out criminals and drug-dealing and "seed" the community with housing, education, and drug treatment programs.

But "if the drug problem can't get fixed in Chelsea, I doubt if Chelsea can be fixed," says Mr. Carlin.

Some residents question whether the new management team is really committed to solving the city's underlying problems. The "Weed and Seed" program, for example, is controversial among the city's Hispanic community which makes up 40 percent to 50 percent of the population.

They are worried that the Immigration and Naturalization Service (INS) - a participant in the program - will incite tensions in the Hispanic community as it seeks out illegal aliens. Another fear is that all Hispanic-looking residents will be victims of random searches.

"The concern is that there is too much weeding and not too much seeding, to put in bluntly. If you bring the INS in, you're going to have a community that is not going to be trusting the project," says Marta Rosa, Chelsea school committee member.

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