Massachusetts Department of Revenue Division of Local

Services
Navjeet K. Bal, Commissioner Robert G. Nunes, Deputy Commissioner &
Director of Municipal Affairs

February 23, 2011

Bernard Lynch, City Manager
City of Lowell
375 Merrimack Street
Lowell, MA. 01852

Dear Mr. Lynch:

I want to extend my congratulations to you and the City of Lowell for successfully having your FY11 tax
rate approved by this office on December 12, 2010. You and your Chief Financial Officer Tom Moses have
written to me regarding what, if any requirements I would impose upon the City of Lowell for next year’s
tax rate.

As you know, I have required over the past several years that Lowell submit their financial audit and balance
sheet for free cash certification prior to setting your annual tax rate. As I have already indicated to you, I am
pleased to inform you that these financial stipulations will not be necessary for FY12. I have traditionally
required these documents from communities throughout the Commonwealth that were struggling financially.
However, Lowell has done a remarkable job during difficult financial times over the past few years to
improve their situation.

In FY07, Lowell had a general fund free cash of negative ($2,220,766), yet for FY11, this has improved to a
positive $1,348,586. Further, various internal controls instituted by your office over the last several years
have placed Lowell in a position to weather the difficulties that you face in this business. These
improvements include, but are not limited to, adoption of enterprise fund accounting for services,
consolidating your finance department, creating stabilization funds, and developing capital improvement
plans. Further, Lowell has protected their revenue base by adopting the meals and rooms local tax options.
The sale of the Tsongas Arena also protects the city from years of deficits which had to be absorbed, thus
reducing the financial stress for city services.

In closing, I want to commend you, your staff, and all the elected officials of Lowell for a job well done.
Though not required, I would suggest you continue the practice of submitting your audits and balance sheet
prior to setting the tax rate, which is consistent with good financial practice.

If you have any questions, feel free to contact me or your field representative Maura O’Neil.

Sincerely,

Gerard D. Perry
Director of Accounts
Massachusetts Department of Revenue

Post Office Box 9569, Boston, MA 02114-9569, Tel: 617-626-2300; Fax: 617-626-2330