FINANCE CONTROL BOARD MEETING, November 15, 2004

 

Present:  Chairman Alan LeBovidge, Mayor Charles Ryan, City Councilor Domenic Sarno, Jake Jacobsen (Phil Puccia, executive director of the board, Bill Metzger, clerk)  Absent: Thomas Trimarco

 

Public Officials and Citizens:  About 16 citizens present including members of the press.  Public officials present at various times: City CFO Mary Tzambazakis, School Superintendent Burke, Bob O’Brien, Barbara Garvey, City Councilor Tim Rooke, City Solicitor Pat Markey, City Auditor Tony Basile, Personnel Director Marilyn Montagna, and Assessor Ritchie Allen, acting Collector Treasurer Sal Calvanese.

 

Call to order at 10:10.

 

Alan LeBovidge:  One of our members, Mr. Trimarco, has been delayed but is on his way here.  We don’t want to wait any longer, so I think we can start and he’ll catch up. 

 

Approval of minutes of the last meeting.

 

Phil and Mary can kind of give us an update as to what’s happening since our last meeting, and also we can talk about the estimated budget and move right into the financial matters. 

 

Control Board Activities since Last Meeting

 

Phil Puccia:  What I’d like to do, Mr. Chairman, is make a few highlights on some of the things that have been taking place and then what I’d like to do is turn things over to Mary [Tzambazakis] to give us a more detailed presentation on the financial reorganization that’s in Phase 1 that you may have read about in the newspaper last week. 

 

Here are some additional points: 

 

We are working with the state’s Office of Information Technology in developing a reorganization and capital plan for the city’s MIS department, working with Peter Quinn from the Executive Office of Administration and Finance. 

 

We are in the process of realigning functions and responsibilities as they relate to Parks and Facilities Management.  We don’t have anything to announce today other than that it is currently under review. 

 

We have reassigned reporting and oversight related to Section 111 which is “injured-on-duty” claims in both police and fire departments.  You may have seen in today’s Republican an advertisement the study of the police department that the Board requested at one of our earlier meetings back on September.  That process if now under way.

 

We have completed a draft of an RFP for payroll services throughout the city.  We expect that to be completed for advertisement within the next 20 to 30 days.

 

We are in the process of drafting an RFP to review operations within the Department of Public Works, real estate assets of the city and parking operations of the city as well.  I expect that draft to be completed within the next two weeks and advertised sometime shortly thereafter.

 

As you know, the city has gone out for a request for tax collection services.  We’ve advertised that.  We are in the process of responding to a great deal of questions by potential bidders.  We expect that process to be completed within the next couple of weeks and have the selection done in January.

 

Those are just some of the quick points, I’d be happy to answer any questions that you may have. If not, I’ll turn the microphone over to Mary to give you a more detailed presentation of the realignment of the financial departments that focuses principally on centralizing control, oversight and development of the budget.

 

Realignment of Financial Departments

 

Mary Tzambazakis:  Good afternoon, gentlemen.  One of the primary issues that has plagued the city over the last several years has been the decentralization of all the financial operations of the city.  And what I was tasked to do was to work with Philip and to come up with a reorganizational structure that made sense, first, by looking at departments that should be under the CFO and, secondly, to look at all the various positions within the city.  Currently, under MGL Ch. 656, the Assessor, Treasurer/Collector, Municipal Information and the Finance Department come under the CFO.  This new reorganizational alignment creates an office of Finance and Budgets and Grants Administration.

 

Grants administration is decentralized throughout the city, and there is no one central place to identify all the grants, how much money we have, how many employees are paid through grant funds, so this will centralize that function. 

 

The second major area that will be coming under the CFO is going to be the Purchasing Department.  The Purchasing Department has a significant impact on the financial impact of the city to do business.  Bid requirements and procurements happen over in that department, and I think that with streamlining and centralizing many of the operations and also adding some IT technology to it, we can produce better RFPs, be more competitive in our bidding process, and receive some substantial savings in procurement.

 

The third and final area that’s going to be coming under the CFO is the Hampden County Employment and Training Consortium. That department is basically a pass-through for federal and state funds for job programs. That has a high compliance area and also has a number of financial people, so it was decided that that department would also be coming under the CFO.

 

The next component of the reorganization was the entire centralization of all of the financial people and the grants writers under the Finance Department.  We have broken that into major categories: Administrative Services, Public Safety, Municipal Services, Human Services, Planning and Housing. And then there is another component which is a Grants Administration piece. 

 

There have been several departments that do not have any financial component, any financial work overseeing their budgets, and what we are going to do is realign responsibilities within the organization so that every department has someone who is watching their budget, that there is a focus on fringe benefits, specifically monitoring health insurance costs, workmans comp costs and other types of costs, including our deferred compensation plan, having some oversight over that where there is none at the present time.  So that’s what will happen in that area.

 

Under grants administration, the grants writers will be centralized, we will develop a data base to identify all the grants, the expiration dates, the employees.  The impact of that is that there are a number of people that are grant-funded in their positions. If a grant is on an annual basis, at the end of the year, a decision needs to be made: either we continue providing that service and find general funds for it or we stop the program.  At this point, the city does not have the ability to do that, so I want to centralize that and have some strategic business decisions made by the board whether or not they want to continue certain things, and we need to get that information centralized.

 

[Commissioner Thomas Trimarco enters.]

 

So that  is a high-level description of what’s going to be happening.  Phase 1 was the announcement of the reorganization.  Phase 2 is going to be the realignment of personnel and centralizing them.  We are going to move the personnel from external departments to one central location. 

 

We have already identified and announced the hiring of the Finance Budget Director which will be Patrick Burns.  Patrick has been with the city for 13 years, and he is the sole person who has been putting together the detailed line-item budget for the city for the last 8 years, and he is well-positioned to help us reorganize this effort and also to help us to identify areas of efficiency and cost-savings. So I’m very pleased to say that he will be taking on that responsibility. 

 

At this point if you have any questions unless you’d like me to talk a little bit about MIS...

 

Al:   I’m just curious, what’s the reaction of the people who are being reorganized?

 

MT:  Well, we have not had individual meetings with the individuals. At the present time, because of the way the budget was written and the responsibility was so convoluted, we’re in the process within the next week and a half of clearly identifying who the real financial people are.  They might have a position of a financial person, and they might be doing 50% administrative tasks that are not financially related, so we have to seriously go and analyze that that, and that’s under way now.

 

            The public perception of this whole thing is very, very positive.  What I’m getting is people calling me and telling me that this should have happened a long time ago, they are surprised it hasn’t existed. So from a public perspective, it’s viewed as a very positive thing for the city, and it’s also a positive thing for the professional financial people here, because people need to be cross-trained, and we need to have a number of people who can do different functions and not be dependent on one person.  For example, right now, if something happened to Patrick, we’d be in serious trouble with preparing the budget, and that’s not acceptable. We have to have lines of succession developed.  We also have to have people that can come in and take over if something should happen to someone, and we don’t have that ability right now.

 

AL:  On the technology front?

 

MT:  On the technology front, I’m very pleased to say that we’ve been working very closely with Peter Quinn the last 3 months, and I’d like to publicly state that he is a phenomenal person to work with, and so is his team.  He’s made available all of his senior IT team for us, and we’ve been meeting over the last several months.  We solidified last Friday an organizational structure that he thinks he’s comfortable with for the city.  We’ll be making some announcements within the next two weeks regarding that, and it’s going to move forward very rapidly.  We need to do a major transformation in our IT area to be able to strategically position the city.

 

AL: Is this something that can be done in the short-term without a lot of additional cost or is this something that is costly?

 

PP:  There are definitely going to be system-related costs, software costs.  We believe we’ve identified a source of funds for substantial portions of that, but based on from where we are today and where we’d like to go, there will be costs to better manage the budget. I don’t even know that we’re in a position to give you numbers today, are we?

 

MT:  There’s a whole area of what... We need to develop an enterprise-wide system.  We have been very main-frame dependent in the city of Springfield.  We don’t have much in the way of mid-range systems, and  we’re also program-intensive, meaning that everything that you need, you have to have a programmer program it for you if you want a specific report, and that is not the way we can keep working.  We need to shift the focus a little bit to identify vendor packages to get a balance between vendor software and internal programming.  We also need to do a complete assessment of our infrastructure and all that.  So that will end up costing us money, but in the long-term, it will benefit the city.

 

PP: What we’ve tried to here is model in the financial department the best practices from many well-managed cities across the country, and align the functions where they should be, give folks the authority to manage and hold them accountable [unintelligible]...the over-arching agenda for this reorganization.

 

AL:  Any other questions?  I know that there are many other things to cover procedurally, including the budget deficit, so why don’t we just move right into that.

 

Up-date on the FY ’05 Budget

 

PP:  OK.  So, sir, should we  just give you a brief up-date on the estimated ’05 budget?  Mary, if you’d like to give a quick run-down of the numbers from where we are....

 

MT:  Our initial budget deficit when we first put together the numbers, taking into account what we felt was the exposure for the city, was approximately $37million.  Since that time, we’ve been working on a variety of initiatives and projects.  One of the costs that we are going to be able to reduce the city budget by, $610,000, is the allocation of retirement and pension payment for retirees.  They adopted—the Retirement Board adopted— a pension payment plan system that will reduce our costs by that amount this fiscal year. 

 

The second item that we also were able to reduce the budget by was $500,000 for health insurance.  Previously, in the budget process, the Library and Museums Association was one “department.”  It split into the Library Association [sic], and they had budgeted $500,000 for health insurance; that was already budgeted in the budget under the health insurance line item, so that $500,000 will be removed. So that gives us a $1.1million savings this year.

 

We continue to have a wage freeze for the city side which is $4.2.  We’ve also shifted the wage freeze component of the School Department of $6.1million, and we are anticipating being able to have $1million of reductions in general government through attrition, re-organizations and cost-cutting measures, so the total reduction will result in a $23.4million deficit at the end of the day.

 

            We feel relatively comfortable with this forecast, and we’re hoping that we may even be able to come back with some additional reductions over the next four or five months as we move forward.

 

AL:  This is for fiscal ’05.

 

MT:  Yes, the current year. 

 

AL:  That leads to...cash.  [unintelligible]short of money, tap into the state funds that have been provided.  Luckily, we haven’t had to do that yet; things have been going better than had been forecast.  So give us an update on where we stand cashwise.

Cash Flow

 

MT: Well, as far as the cash flow requirements, as you stated, we have done a lot better than originally planned, and that would come in with Mr. Calvanese, the city treasurer, telling you about our tax delinquents and our collections.  But we anticipate needing funds November 27, which was the original date we thought we would need funds, but the amount of funds has been reduced.  We anticipate needing approximately $5.4million on November 27.  On December 4, we anticipate about a $4million need.  December 11, approximately $9million, and then December 18, $3.2million.  So that’s approximately, close to $21million prior to December 30.

 

AL:   December 4, $4million.  December 11, $9million.  December...

 

MT: 18, $3.2.  The total would be $21.7million required.

 

PP:   Prior to the receipt of the cherry funds.

 

AL: The cherry sheets?  So, that $20+million dollars is the need, that’s not long-term, that’s needed to bridge cash-flow, and then once the tax bills go out and the state aid is received, you’ll be able to pay that back?

 

MT:  We may be able to pay it back, and if we pay it back, then we’ll have to come back for borrowing again, but we’re going to see how the cash flows, because one of the positive things that’s happened around here is our collections have really moved forward in a positive light, and we’re going to see how it goes.   For now, this is an estimate of what we’ll need, and we want need to keep a $5million minimum in the treasury to keep us liquid.  If we do not need the cash, we will not borrow it down, and if we feel we have sufficient enough cash to carry us for a period of time, we will return the cash.

 

AL:  Procedurally, I have to notify the Secretary of Administration and Finance.  He has to then go through the state systems, so it doesn’t turn on a dime, and, you can’t get the money in one day, so we need some time in advance to get the checks processed, so I just need to know exactly.... It sounds like I should be notifying them after this meeting that we need $5.4 million for December 4, and then, should I wait on the $9[million] or should I...

 

MT:  I think what we need to do is we can’t afford not to be liquid, so I  will give you a date and an amount, that we need for the next four weeks, and we’ll plan on scheduling that money through and seeing where the cash goes.

 

PP:  I think it is our intention to pay whatever we can as we go along until we get to the end of the year and figure out where our balance is.

 

AL:  The end of the fiscal year.

 

PP:   I’m sorry, the end of the fiscal year.

 

AL:  At which time that would be more something  longer-term borrowing from the trust fund...

 

MT:  To bridge the gap.

 

AL:  But you mentioned the $5million minimum cash balance; just kind of explain why you need $5million.

 

MT:  Well, the city of Springfield has invoices that come and go on a daily basis and we pay warrants out.  And we need to have a minimum amount of money that we feel is appropriate for the city to operate, and that balance is $5million.  The budget is approximately $457million, so that’s not really a large percentage to have on hand for cash flow purposes.

 

DS:  Mr. Chairman?  I do want to ... and, Mary T., I’d want to commend you and your her staff  and Phil, on the percentages of tax collection, which we are going to go on 95%. We are going at an increased percentage though of about 97.5?  We are going conservative with the 95?

 

MT:  Well, at this point, the discussion and the decision was made by the control board to budget at 95%, and that was a very prudent and good decision, and what we are doing now is we are watching our collections for this fiscal year, and towards the third and fourth quarter, I think we’ll be in a better position to determine what the true rate is going to be, because there are certain factors that spike that up.

 

DS:  My point being that, with the aggressive collection of revenue and back taxes, etc. which is going on, this could adjust a bit to the positive.

 

MT:  Yes. Yes, that’s our intent.

 

PP:   Absolutely.

 

PP:  That’s our intent to hope for the best, and Sal Calvanese has a bit of an up-date on the actual percentage collection rates and so fourth, and he will obviously report back to the board whenever we get together on what we project the number is [unintelligible].  

 

DS:  The control board wisely so. We want to project conservatively, but the trend continues to be that  there’s more money to the positive that might knock off on the bottom line.  Thank you Mr. Chairman.

 

AL:  That hasn’t happened yet?  That’s still being worked on?

 

PP:  That’s correct.  As the members will see in your package, there are a couple of procedural votes that need to take place that will allow DoR to approve the Fiscal ’05 tax rate in December of this year.  Those are based on approval of the ‘05 budget that the board gave, I believe, on September 22 of this year, and which is one item under Item 3 which I would ask the board to approve, Item 3 as listed in your package.  And then, secondarily, the loan document which allows the city to borrow throughout the course of the year and pay back the amount up to $37million.  Again, the caveat here is that we don’t expect it to be that large, but that number is based on what the approved budget was by this board earlier this year.

 

AL:  I guess the only question I have is just a procedural question: Should the amount that we vote on to ask for authorization, should it be $37million or should it be the projected $22million?

 

PP:  I believe that based on my discussion with Jim Johnson [unintelligible].  We had this discussion at length, and his viewpoint is that we should be the $37million, knowing that we may not borrow the $37million.

 

CVR:  Over the week-end, Mr. Puccia and Jim Johnson of DoR and I had a long telephone conversation on exactly this subject, and, while everybody admits that this is uncharted ground, Mr. Johnson was very strong in his recommendation and feeling that the vote today should be for the $37million figure. 

 

AL:  OK.

 

CVR:  Now, I think that, happily, I think, as we go forward, we all feel that we will not need the $37million. It will be some figure less than that, but we figure we can’t quantify it right now, and so this proposed vote indicates that it will be no larger than the $37million figure.  And so, if we come in at a figure some millions of dollars short of that, this just means that we don’t borrow it, and obviously, we would not be charged for it.      

 

AL:  So that means we’re voting $37million, but we have to rescind...Didn’t we have a prior vote...?

 

PP:  Yes, we said we were going to have to borrow $15million.

 

AL:  We want to get rid of that.

 

PP:  We want to do that, as it’s laid out in your package, Items 3 and 4.

 

AL:  Do I have a motion that we accept Item3 and just use $37,049,046, and the one other item in this proposal is that directions to assessors 5% additional as net tax levy as an additional amount, which I assume is a maximum it could be increased? Is that correct?  5% levy?

 

PP:  I believe it to be so to the extent possible.  Some of these questions I would defer to Mr. Johnson.

 

AL: That’s the natural growth in the...

 

PP:  Yes.

 

AL:  And then rescind the $15million request.

 

PP:   I’ve got it on paper here. That’s good.

 

**Motion(s) pass unanimously.

 

DS:  Mr. Chairman, I just had a question, and I’m joined by my colleague, Councilor Tim Rooke, on the tax rate:  Will the City Council still be involved in setting the tax rate procedures as they normally are?

 

AL:  Yeah, well, I hope they are.  I hope they’re going to do it in a timely manner, if we have to get it done.  It needs to get done in December.

 

PP:   I believe, by December 15 .

 

MT:  By December 15.  There’s a meeting scheduled, I believe,  December 8, and at that time, we need to get that out and make a decision, otherwise we have to bring it to the board.

 

DS:  As soon as we receive the information.  I know our chief assessor Ritchie Allen is working on  certification, the council will still be involved as far as the tax rate. 

 

AL:  I hope so.

 

DS:  Thank you Mr. Chairman.

 

AL:  Any other votes or things that we need to do?

 

PP: Under that item?  No.

 

AL: Where do you want to go next?

 

Delegation of Authority from Board to Executive Director

 

PP:  I’d like to go to Item 5 on your agenda, and I have provided, I think, all the members, except for Mr. Trimarco, some up-dated language as it relates to the delegation of authority from the board to the executive director for the process of executing the board’s directives related to the reorganization of city government, specifically city departments, setting wages, salaries, allocating budgets and the like and request the board’s approval of the language as submitted.

 

AL:  So just tell me in layman’s English what we’re doing here.

 

PP:  What you’re doing here is: the board has directed the reorganization of city government and operations be carried out.  It allows me working in conjunction with the mayor and his staff to execute those directives and to not have to come back to the board to make minor adjustments within the approved fiscal ’05 budget.

 

DS:  Mr. Chairman, I just have some questions that could clarify one point that you’re not by-passing his honor Mayor Ryan.  As far as—and we’re all for the reorg, it’s something that needs to be done in a very systematic way—but, in turn, there will be no type of financial orders nor any personnel policy issue or anything going before the city council at all.

 

PP:  Not in my interpretation, no.

 

DS:  What would be any recourse if, as far as city government, as far as normal procedures being by-passed and the council being by-passed?

 

PP:  Well, the legislation already defines the activities of both the board and the city council, and this order is to give the executive director specific powers that have already been given to the board to execute that reorganization.

 

DS:  Now, when you confer with the mayor, will you also, as respectfully, confer also, keep the city council updated on these changes?

 

PP: Yes.  I believe we made a presentation....

 

MT:  To the extent possible.  One of the problems that we’re having right now with the finances, councilor, is that, you know, we have a very short time frame to move things along and get the city on a solid financial footing, we’re moving as quickly as we can, because we have to fill a $23million gap. 

 

PP:  We would apprise the council of all of our activities in as timely a fashion as you... If you want a monthly update, we’re happy to come and do that, but there are items, I guess, that take place within a variety of boxes that you would find out after they happen.

 

DS:  My point is just that the reorg which needs to be done systematically as we...to streamline and better operate the city government, generating revenue, collecting revenue, the daily calls that our constituents are going to come to city councilors.  I’m just wondering if... any time there is a change, there’s always some uncertainty, so be apprised of the situation, I just wanted to clarify that we’re moving completely away, as the law, as the control board....

 

PP:  Councilor, I’m happy, personally, to give you any up-date that you seek.

 

CVR:  Mary T. and the other financial leaders and I have been working closely with Mr. Puccia through all of this.  I think that fiscal ’05 is an unusual year, because there’s a whole series of things that are going to happen in this year when we have about 7 or 8 months left in it.  And, traditionally, as the council president suggests, traditionally, to move budget items from one department to another or even within departments, you have to go back to the city council.  I may remind everybody that when the 9/12 budget was passed, the council did not even participate in that budget.  (They did participate in one or two of the one-month budgets. But I think that this 9/12 budget, which is really the essence of this fiscal year, is the control board’s budget now.) 

 

And I think it makes eminent sense for the executive director to have this power.  Certainly, there will be a reporting function here which he has just said that he would respect and honor, but rather than spend a lot of time going back as we move a position or positions from one department to another, to get some sort of approval, I think is just kind of busy-work, and I’m not sure I would have the same opinion so far as fiscal ’06, but there are a lot of things happening. We want to have the freedom to have them continue to happen.  This power was clearly given to the control board in the legislation which has been enacted and under which we are living, so realizing...and again having had three or three and a half months to work with Mr. Puccia, I have much more confidence in endorsing this today than I might have had when we first got to know each other.

 

DS:  Mr. Chairman, my only point in time, just to clarify that point, like you said, because the original dialogue that we had, written dialogue, just seemed to by-pass certain things.  I’m not questioning anybody’s work etc.[?] but there needs to be whether the mayor or the council president.  We need to streamline, we need be systematic, but there needs to be continued give and take as far as these positions go.

 

AL: Is there a motion adopt this order delegating certain powers to the executive director as outlined in this revised statement?

 

**Motion passes unanimously.

 

PP:  In a similar vein, Mr. Chairman, under Item 6, in the interests again of streamlining the functions of the control board, I am asking for the authority to enter into contracts that have been directed by the board up to a spending limit of $100,000 without seeking additional board approval, in the sense of once you have said, “We’d like to do a study of X,” then I am be given the authority to commence that business and execute the contract without coming back to the board

 

AL:  That wouldn’t be by-passing any....

 

PP:  No. that’s why I say consistent with Chapter 30B and 169 which govern the operations of the control board.  I said $100,000. I don’t think that there is anything either a) that I would need to do and b) that I would not seek the board’s direct approval on.  We’re talking about RFPs... 

 

**Motion passes unanimously.

 

Consolidation of City Bank Accounts

 

PP:  While Mary’s here, Mr. Chairman, if we could go out of order for a moment, there’s an item, Item 11, which is [a] motion to consolidate city bank accounts, and I would like Mary to speak on that issue, and the language is in your [unintelligible].

 

MT:  We have a couple of issues that have come up in this whole process of financial reorganization, and one is that we have found over 170 accounts in the city, whether they are checking accounts, bank accounts, etc.  A memorandum was sent out in September by the new Treasurer, at my request, to all area banks and credit unions, because I had a concern that there may be accounts that we’re not aware of.  We’ve identified a substantial number of those accounts (being PTO accounts and so forth) and  what we’d like permission to do is to consolidate and close accounts as needed to reduce the number of accounts we have.  Our goal is around 20 accounts from 170.

 

Funds from Fines, Fees and Permits Targeted to Specific Departments

 

And the second component is the whole idea of the way monies and funds are allocated through the process of fines, fees and permits.  Right now, there are a series of ordinances or fines or fees that target the money to a specific department, and what ends up happening is that you have certain departments that have pools of money to do whatever they want with, and then you have other departments that are strapped for funding.  So what I’d like to do and what we plan to do is to centralize all the money into the general fund where we can, unless its grant funds, and then, once the board decides on a budget, that’s what the department will have for funding.  There won’t be any special revenue accounts here or revolving funds accounts there or enterprise accounts there, that we centralize and abolish any accounts that have been established, centralizing all the funds and making a clear decision as to how much money a department will have to operate, and that’s their budget.

 

AL:  So, in other words, you’ll have, the normal process would be X department has $5million, and you get it from the city, and that’s it.  And you don’t have $5million plus some other accounts that no one knew about.

 

MT:  It’s a practice that has gone on in the past which allows someone to come in with an ordinance and then the ordinance the money is targeted to that department for that ordinance.  Some departments have the capability to raise fines, fees, and permits, and others don’t.  When we start segregating that money, that’s less money available to general government and the overall operations of the city.  And, as the CFO, my responsibility is to make sure that every single department is adequately funded, not one department over another.

 

AL:  I don’t know if you have the information available with you, but what kind of money are we talking about that are in all these accounts?  What is the dollar amount?

 

MT:  We’re still trying to figure that out.  I’ve actually got a paralegal who is going through the ordinances and legally determining how many of those accounts there are.  And I’m also going to have a finance/budget director go through and identify revolving funds that there are.

 

I’ll give you an example:  Right now have a parking facilities The money stays there until specific purposes. Well, if you have a balance of $300,000 at the end of the year after you’ve finished your expenses and you’ve paid for the moderate up-keep, then that money cannot be used for anything else.  And if we have a need for police officers or fire fighters, I cannot touch that money to leverage it for hiring additional police and fire.  So, those are sort of the things I’d like to try to clean up around here, and I’m asking permission to do so.

 

TT:  [unintelligible]

 

MT:  Accounts?  A lot of those were PTOs and so forth.

 

AL:  What’s a PTO?

 

MT:  Parent Teacher Organizations.  They go and what they’ve done is they’ve used the city of Springfield’s tax identification number to go set up a bank account.  And so, what I’m saying to them (and I’ve contacted the school department, and said, they are no longer to use the city’s tax identification number.)  They should form a non-profit corporation with its own tax i.d. and separate the money out. 

 

AL:  It definitely belongs to that PTO; it’s not the city’s money.

 

MT:  They raise it through bake sales and that kind of a thing, and I just want to clean it all up.

 

PP:  [unintelligible] ...focused on special funds and accounts.  The language is in there [written motions in board members’ packets]

 

AL:  motion?

 

**Motion passes unanimously

 

AL: Get rid of a lot of paperwork.

 

PP:  Just in the interests of staying on all financial matters, and we’ll breeze through this quickly, I know: Mr.Calvanese, do you want to give us a quick update on tax collection as the next part of the agenda?

 

 

 

 

Tax Collection

 

Sal Calvanese:  I’m Sal Calvanese; I am the current acting collector treasurer.  In the areas of real estate and personal property and tax title, we’re up percentages in all the tax collections. The highest tax collection increase is in personal property. This report compares July 1 to November 6 of this year to July 1 of ’03 to November 6 of ’03.  Personal property is up 32%; that’s the biggest jump. Real estate property is up 1.1%.  We are below 9[0?]% in the collection rate due to the fact that survey shows that taxpayers wait for the tax rate to be set, and some wait for the IRS refund to come in so we see a spike in the third quarter.

 

AL:  By fourth quarter, you mean May and June? or February and March?

 

SC:  Yeah.  February and March.

 

AL:  Why do you think personal property took such a big jump; 32%, that’s pretty big.?

 

SC:  I think that some business people out there suddenly realize the city is getting serious about collecting taxes.  Other than that, it could be a time issue, I haven’t had time to research it out. Also tax title is up: last year, at this point in time we collected 1.6 [?million dollars], and we’ve collected 2.2 [?million dollars] to date.

 

AL:  So, $600,000 more.  Does that have anything to do with the initiative to not renew licenses? That result would show up on the tax ...

 

SC:  That’s one of the programs, yeah, the liquor license initiative.  Another initiative is that for the first time, I’d say  in 10 or 12 years, we’ve notified all the tax delinquents on the second quarter billings for real estate that show tax title now, and it will be on every bill from this point forward.

 

CVR:  I have a question, Sal.  It would be on the top of your paper here, having to do with taxes on real property, the levy of 2005, you have a total commitment of $55 odd million.  Does that represent the first two quarters?  

 

SC:  Right.

 

CVR:  In total.

 

SC:  In total, correct.

 

CVR:  In total, and the second one of those bills would have gone out when?

 

SC:  The second bill we sent out two weeks early, went on September 15.

 

CVR:  I’m not sure we’re talking about the same thing.

 

SC:  You’re talking about the real estate bill?

 

CVR:  On the real estate bill, you send out four a year, and the first quarter goes out...

 

SC:  June 30.

 

CVR:  June 30, and the second quarter?

 

SC:  Usually goes out September 30, but we sent it two weeks earlier this year.

 

CVR:  I see. So it’s been out a couple months now.

 

SC:  Yes.

 

CVR:  And what you’re saying is that you have collected, of the total $55million which is now outstanding, 85%.

 

SC:  Right. 

 

CVR:  Is there any way you can measure as to whether or not you’re ahead or behind?

 

SC:  Well, if you go down to the next set of lines, says compare 2004 to 2005, it shows that we’re up 1.1%.

 

CVR:  OK. All right.  Fine.  And then down here, I see where you have yourself as about 4% higher?

 

SC: In tax title?

 

CVR:  Yeah.

 

AL:  When you say “tax title” it says the total outstanding on real estate, I assume, is $46million? 

 

SC:  Yes.  That, as of November 6, that is what is outstanding in the treasurer’s office, property that has liens on it.

 

AL:  So if collect all of that tax money—but I know we can’t so it—we’d have $46million.  There’s another $7million in personal property tax .

 

SC:  Correct.

 

AL:  So, that’s the $52 or $53million—that’s the target we’re shooting for.

 

CVR:  What, again, is your explanation or opinion as to why the personal property tax collections are so dramatically higher?

 

SC:  Well, I haven’t researched it out, again.  I think the initiative the city has taken has caused some business owners to say, “We’d better pay our taxes on time.”  The other issue could be a small timing issue, but I doubt it’s a timing issue.  I think that business owners out there are starting to realize that it’s time to pay in a reasonable time.

 

CVR:  Why Mr. Puccia is smiling?

 

DS:  Cheshire cat smile, Your Honor.

 

TT:  What is the source of these personal property payments?  Is it corporate?

 

SC:  I do not have that.

 

AL: This is not auto excise, is it? 

 

[Unknown speaker]  Not the auto excise tax, right?

 

AL:  ”Personal” otherwise refers to a business, but it looks like, if I’m reading this schedule correctly, tax title collections went up dramatically in September and October this year...

 

SC:  That’s when we started in the initiative with the liquor licenses.

 

AL:  It went from $65,000 to $500,000, and then to $485,[000], so do you anticipate that continuing or is that kind of petering out?

 

SC:  I think as we get closer and closer to the deadline of the renewal of the liquor licenses, that the numbers bump up.  Well, the deadline is, I think it is December 31—is that when they are having their hearings?--but I think that we’ll see a bump in December, and then there’s some type of payment agreement to be worked out for the next four months, and I think that from January, February, March and April we’ll see a bump.

 

PP: Which is an item, Item 10, on the agenda.  I think the answer to the mayor’s question is that the presence of the board and the mayor’s pronouncements that “You’ve got to pay your taxes” have really been the driver of increasing this.

 

DS:  Mr. Chairman? I just wanted to commend Sal—I know you’re working night and day—also the administration and the mayor for sending the aggressive notice out there that “If you owe taxes, you’ll have to pay” and also clarify, to clarify the point that, I believe, it’s been 10, 12, 15 years that, really, no aggressive tax collection has been done.  Now, which I’m glad to see, we’ve been asked for that, that you’re putting on--old school:  If you don’t receive a bill that you owe money, the likelihood is that you’re not going to pay it. You’re indicating now, Mr. Treasurer, that on the bill, beside your, what you owe currently, up-to-date, will indicate past taxes that are due, which I think is an important movement forward.

 

SC:  At this point, just tax title property will go on, but in the future, any other tax—it may also be personal property--will be added onto that same bill, but not as of right now.

 

DS:  So we’ll be able to alleviate if someone’s not aware of, if there’s extenuating circumstances, medical, loss of job if this can be worked out prior to sending 10, 12, 15 year taxes behind on taxes.  I think that’s an important move forward, and I commend you and your staff and the administration of Mayor Ryan for continuing to dig out this hole.  Thank you Mr. Chairman.

 

AL:  Let me ask—when we talk about the license program, what does it cover?  I know you said the liquor license, but does it cover more than that?

 

SC:  We just started with the liquor licenses.  I think there’s other programs, licenses in the city we can target and that, most likely like the code enforcement licenses that are handed out, but we started with the liquor license and it’s made a great impact on collections.

 

Pulling Special Permits for Tax Delinquent Property

 

CVR:  And, again, we’re doing things that really should have been done, I think, were not done.  Mr. Sygnator spoke to several of us 3 weeks ago on the whole issue of collecting taxes on overdue special permits.  And, we all know that the city council over the years has issued many, many special permits, and, evidently, somebody several years ago indicated that no effort could be made to remove a special permit for non-payment of taxes.  Mr. Sygnator, using his initiative went to see Mr. Markey, and Mr. Markey read the law and informed him and everybody else in this building that that opinion was wrong.  And so, not only will that be moving forward and using as a lever for collections on liquor licenses the non-payment of taxes, but also the whole special permit area—we want to go through that.  It’s not anything we’re going to do in the next week and a half because of the tremendous job of analysis necessary. But, if people have received special permits, that permit, just like license, comes within the purview of the overall statute and ordinance that governs this issue, so I think it’s going to help us markedly bring into our fold hundreds of more accounts which, up to now, have decided not to pay their taxes, but now will be under the pressure of losing their special permits if they don’t pay their taxes.

 

AL and TT:  Give us a couple of examples:

 

CVR:  The example that was given to me by Mr. Sygnator was a used car dealership on one of the main arteries of the city which is existing only by virtue of a special permit of the city council.  That particular piece of property is delinquent in its taxes for many, many collars and so now, instead of going through the laborious tax title foreclosure route, we can just threaten to take away his special permit.  That’s a significant amount of economic pressure, and, as I say, the analysis hasn’t even begun because this is only something that’s come to light in the last 2 to 3 weeks, but we will be marching through all of those, and there are probably 1000 special permits in the city.  Now, not all of them are going to have tax consequences, but certainly a fair number of them will, because, as you can see by now, a culture has developed in Springfield in recent times of a lot of people just deciding they weren’t going to pay their taxes, and so we will keep going against all of these efforts., but I was delighted that when, through the initiative of Mr. Sygnator, he brought to light an issue which enabled us to expand what I think is the power the city needs.

 

TT:  The special permit, using your example of  (Pardon my voice) the auto, used car dealer, you’re saying that without that permit—that’s his license to operate.  That’s the point?

 

CVR:  Yes.

 

TT:  [Nods several times.]

 

DS:  Just to clarify for the council side, also, you also asked about other licenses.  The health department licenses issues many licenses as far as food or restaurant-type activities.  The city council reenacted, I believe, two or three years ago or further on, any special permit that comes before us has to be researched to see if there is any back taxes owed at that point in time, so I wanted to clarify that point.

 

AL:   A certificate of good standing.

 

DS:  That’s right, that you’re coming before us, that your taxes have been paid before you receive consideration, whether pro or con, on a special permit aspect.

 

AL:   On a different, I wonder if you can comment: on a liquor license, for example, they all have an expiration date..

 

DS:  Yes.

 

AL:  Sounds like the special permits don’t, is that right?  A special permit is more open-ended, so it’s really a revocation as opposed to an annual renewal.

 

DS:  You can attach time-frame for review, but historically, you’re right: Unless there’s been an issue, and then we can bring a revocation, but the mayor Pete Sygnator has done a really good job on the license commission, because that gives you a caveat: if you’re going to take away their operating license, they are going to be unable to have a livelihood until they pay their taxes.

 

AL:  Hope they pay it anyway, but I guess you have to threaten some people.  OK.  So you said there was a vote?

 

PP:   I’d like to call Mr. Markey, the city solicitor.  Included in your packages, gentlemen, under Item 9, is a proposed—there are terms for tax agreements, and Mr. Markey could give a brief overview, and so....

 

Repayment Plan for Tax Delinquents

 

Pat Markey:  Sure. One of the things, with the help of the mayor and Phil, that we identified the possibility of using licenses to as leverage to get the taxes paid.  This particular statute is Chapter 40, Section 57, and it authorizes us to revoke and/or refuse to grant renewals of any license applications.  The statute also requires the licensing authority to offer tax delinquents the opportunity to enter into a tax repayment agreement.  Now, legally, tax repayment agreements are not extended greater than one year.  One of the things that we’ve found that the taxes is that [unintelligible] later than one year.  We’ve met with the liquor license commissioner, Phil, the mayor, Sal Calvanese, and Mary T, and what we’re proposing in the draft agreement that you have attached with your paperwork is an agreement that would extend for a period of 4 months.  It would call for total payments of all outstanding tax obligations within 4 months in 4 equal payments.

[unintelligible]

 

AL:   The most it can be is for four months?

 

PM:  That’s what we’re proposing.  You could decide on something else. [unintelligible]

 

CVR: If I understand you, Mr. Markey, this proposed agreement, if the board ratifies it or takes this vote, is restricted to delinquent taxpayers only in the field of licenses?

 

PM:  Yes, that’s right.

 

CVR:  ...and permits?  In other words, it’s licenses and permits both in that statute?

 

PM:  That’s right.

 

CVR: The mandate is that we’ve got to have a chance of not more than one year, and we’re opting for four months.  But, if it wasn’t a license or a permit situation, right now, there is no legislation or force upon the city to have any agreement whatsoever.

 

PM:  That’s right.  There’s no requirement that the city offer this agreement to anyone other than the license-holder, license applicant or permit holder.

 

DS:  May I ask a question?  If it’s real estate tax, etc. would it look to aggressively foreclose on the property or would we look to another year’s time to try to work out a payment plan.

 

PM:  No.  No, we would aggressively pursue tax foreclosure.

 

AL:  Just to make it in real terms: If you have a house, a residence, this doesn’t apply to a residential situation where there’s back taxes.  That you’d have to go after foreclosure, is that right?  It only allows you, in a business sense, where you have a license or a permit, that’s what you’re....

 

PM:  A business license holder... If the license was issued to an individual, that individual would owe taxes on residential property, arguably, you would have to work it out. That’s the sort of thing lawyers worry about, but in the broad sense....

 

CVR:  But the normal, to take the chairman’s question, the normal residential delinquent taxpayer is this proposed vote would not apply.

 

PM:  That’s right.  Unless the control board suggests to me and Sal Calvanese that they would like us to enter into tax agreements with anybody other than license holders.

 

Jake Jacobson:  [unintelligible]

 

Collecting Taxes Improperly Abated without DoR Approval plus Interest and Interest on the Interest

 

PM:  We think we’ve identified all of those, but a paralegal in the law department run through all the tax accounts from 1996 through 2004 in which interest was discounted. 

 

AL:  How many and how much?

 

PM:  We think it’s about $1.5,  Sal Calvanese actually calculated it.

 

AL:  You know how many agreements you’re talking about?

 

 PM:  Well, there are a number of written agreements— probably less than five—and then there are a number of –it must have been--oral agreements which actually is about...

 

AL:  I don’t understand that.

 

PM:  I want to say that it’s about...It’s a spreadsheet that’s about 8 pages long.

 

AL:  So someone just made a note like “I met someone on the corner, and I told him ‘Don’t worry about your taxes this year’”?

 

PM:  Not even a note.  It’s been like forensic accounting; we’ve gone in and noticed it, calculated what should have been paid if interest was paid and done the subtraction and recognized that “Oh, the interest wasn’t paid and yet they were given a clean bill of health on their taxes, so that’s how we figured it out.  In most instances, 99 out of 100 cases, there was nothing, no note, nothing.

 

CVR:   But there is still an understanding?

 

PM:  Well, there must have been an understanding, because tax delinquents all of a sudden had a clean plate—no taxes owed—when we went back to calculate.  We were able to track what they paid and what they should have paid.

 

AL:  You had the bill, and you had the payment, and they didn’t match.

 

CVR:  You’re saying that the difference is about a million, five.

 

PM:  I think that that’s about what it is.

 

CVR:  My understanding is you intend to move forward on the grounds that there was no legal authority.

 

PM:  There’s no legal authority without DoR approval to discount interest. [unintelligible]  The DoR cannot without application consider a tax abatement.  DoR was not consulted in any one of these tax deals.

 

AL:  Is there any statute of limitations problem or are you going after all of these?

 

PM:  There’s a six-year statute of limitations on breach of contract actions.  This would be in the nature of a breach of contract; we may not be able to get 1996 and 1997, but  we’re also very creative.

 

AL:  And we’re moving forward on getting these.

 

PM:  Absolutely.  One thing I want to make clear, and I guess, looking for your blessing on it, my interpretation of the law [unintelligible] interest leads me to believe that if somebody got a discount in 1996 and their interest was written off, I need to go out, Sal Calvanese needs to go out and get all that interest that was discounted, but, in addition, interest that would have accrued on it...

 

AL:  Interest on the interest.

 

PM:  That’s right, the interest accrues at 16% a year.

 

AL:  Sounds good to me.

 

PM:  It’s a sort of investment fund for the city.

 

AL:  Yeah, right. That makes me feel better.

 

PM:  It’s deferred compensation for the city.

 

JJ:  The city of Springfield is so financially flush that it’s able to offer these little incentives to their citizens.  That’s very laudable.

 

PP:  So, if there would be a motion to accept the tax agreement as outlined...

 

*Motion passes unanimously.

 

AL:  OK.  Go get ‘em.

 

Health Insurance Trust Fund

 

PP:   Item number 7, gentlemen, is an item that we informed you of a couple of meetings back.  It was to establish a health insurance trust fund. 

 

PM:  That’s right.  I think it was two meetings ago that I appeared before you and recommended that the city create an insurance trust fund.  It’s not something that’s statutorily required, but I think that it’s a good thing, it makes good business sense, so we’ve prepared a resolution that authorizes the city to create an insurance trust fund.  The way it works now is that a city employee goes to the doctor, the doctor bills the health insurance administrator, the health insurance administrator then bills the city, and payment from the city comes out of the general fund.  What this would enable the city to do is to pay the health insurance administrator out of a separate trust fund, and it would permit better management of that fund.

 

AL:  It’s not more dollars, but you’re just segregating the dollars. You know it’s there.  People pay the premiums, they should know it’s there to cover their health costs.

 

PM:  That’s right.

 

CVR:  And again, the embarrassing thing is that it’s mandated by the state law.

 

DS:  Attorney Markey, this was mandated back in...

 

PM:  Well, it was made available, it’s not clear that it was mandated.  It certainly makes a lot of sense.

 

DS:  It’s advisable to pursue that course of action.

 

PM:  Right.  Well, it may not be mandated by statute, but it appears to be mandated by the contract with the health administrator.

 

**Motion passes unanimously.

 

Legal Issues in Removing Racial Balance Busing

 

PP:  What we’d like to do now is to take an overview of some school busing issues.  We’ll hear a brief overview from Mr. Markey about some of the legal issues.

 

PM:  I was asked to provide an opinion as to the steps that needed to be taken to do away with racial balance busing in Springfield.  No mystery to it. 

 

What I would recommend is a three-step process:  The first step is the school committee amending the control choice school desegregation.  The school committee develops a plan which complies with the current state racial imbalance law.  The school committee holds a public hearing, seeks comments, notifies everybody (parents, etc.) that the public hearing is going to take place, and, after the public hearing, takes a vote on what form the plans to abolish racial balance busing would take.  That’s Step 1.

 

Step 2 would then be to go to the state board of education.  The board of education is the body in Massachusetts that is authorized to approve racial balance plans to ensure they comply with the state racial imbalance law.  I believe that the state board of education would [unintelligible] at the end of which they would approve or disapprove the plan [unintelligible]

 

The last step, although it’s not required but I think it would be prudent, would be to get court approval of what the school committee and the board of education decided.  That would be done to bring a new action for approval, a brand new case in superior court in Massachusetts.

 

Or there’s existing cases that Springfield has been part of  [unintelligible] three school busing cases and we go up to the court seeking approval [unintelligible]

 

AL:  If we follow this process, do you have any idea of how long this takes?

 

PM:  I don’t.  There are no...

 

AL:  The superintendent might.

 

Superintendent Joseph Burke:  (from the audience)  [unintelligible]

 

PM:  ...once we get the state board of education, state [unintelligible]

 

AL:  The other question I have is: this is one piece, is there another piece that the school committee is going to take some action on? [unintelligible]  Is that right?

 

PM:  So, those are the legal steps that the city could take.  I should apprise you that there is another alternative, albeit I wouldn’t recommend it, the city could go to court and challenge the state racial imbalance law on the grounds that it’s unconstitutional.  I think that opens up a can of worms.

 

School Boundary Plan to Achieve Racial Balance if Racial Balance Busing is Removed

 

AL:  OK.  Superintendent Burke?

 

JB:  Good morning.  I’d like to give you some brief history, and the materials that I’ve presented to you are background information that my staff has prepared which gives the control board specific information that I think will help. 

 

Basically, the Springfield Public Schools have been under a court ordered desegregation plan since the early 1970s. That plan, which was designed by the city, included a variety of  school choice options that were intended to provide a mechanism for the city to racially balance the schools and address the issue of desegregation.  The original order was an order that deals specifically with black students and white students.  That order was amended to include Hispanic students as a separate category that had to be balanced within the context of the city’s population.

 

Last year, the school committee underwent a process, some of which was described by solicitor Markey, to make a minor modification in the desegregation plan.  That action was taken primarily because the demographics of the city had undergone  very dramatic change over the past 10 or 12 years.  And , in addition to that, we had, as an overlay to the desegregation  plan, a couple of other mitigating factors that needed to be considered, one of which was “No Child Left Behind” which provided a school-choice mechanism in and of itself where parents whose students were attending a school which did not meet adequate yearly progress: under the federal law, parents in those schools could request transfers out of those schools into a school that was making adequate yearly progress.  In addition to that, we had some contract language in the labor agreement with the teachers union which established a 25 student-teacher ratio in grades K through 2, and we were trying to administer that at the same time as we were trying to do the racial balance.

 

So, the minor modification that was approved by the commissioner of education last year was to go from 6 administrative zones to 3 administrative zones.  And, within those 3 administrative zones, there were some additional opportunities for us to administer the plan more effectively given the other factors that we were dealing with.  So that was approved last year.  There were a number of community meetings that are required in order to inform the community of the change, and the school committee took a vote to submit that minor modification to the board of education last spring, and it was approved by the commission.

 

Recently, the school committee took a vote to authorize the superintendent and staff to develop a boundary plan that would essentially eliminate the school choice model, but would provide mechanism to create “boundary schools” within the city that would still allow us to work towards compliance with the original desegregation order.  The school committee did not feel, at the time of that vote, that there was a need for us to actually remove ourselves from the court order, but, in fact, the desire was, because of the persistent demographic changes, to try to create a “boundary plan” that would allow for students to live in a particular area and attend a school within a specific boundary that would be closest to their home.

 

The staff is now working on such a plan.  We’ve established a specific protocol for how we’re going to go about designing the plan, but the issues with regard to transportation costs and the potential savings and a variety of other process issues are things that we wanted to apprise the control board of. 

 

So, first of all, we’ve established a time line for this process which is the first attachment to the memo.  And what that time line does is it gives us a two-month period of November and December to work on the development of the plan itself and to present that plan to the school committee at a working session on December 16.  At that time, it’s our hope to have a detailed plan prepared for the school committee of what the boundaries would look like.

 

The second time frame there in January and February is set aside for a series of community meetings which would be an opportunity for community members to look at the plan, to make comments, and to provide feedback to the school committee, and then for the school committee to act on a plan in February that would then be submitted to the Department of Education in June.  It is anticipated that, given several other court cases that have occurred in recent months and the current thinking of the board of ed, that such a boundary plan would be approved if we were able to show that we were able to show that we were not, in fact, acting in such a way that we would be deliberately resegregating the schools.

 

One of the things that I think is important in light of this whole issue is to recognize that the demographics have been shifting very dramatically.  We did an analysis of what those demographics would look like 5 years from now given the current trends.  And, at that time, the Hispanic population we are predicting would be 56%, the African-American population stay stable at about 28%, the white population would continue to drop to about 11% and the Asian population would probably stay at around 2% or might increase a little bit.

 

Five-Year School Population Demographic Forecast

 

Part of the dilemma that we’re facing with this whole plan is that we have been operating the plan to try to stay within 10% of the actual student population demographics citywide.  So, if you project out 5 years from now and your white population is essentially 11% and (that’s our prediction, could be 12, could be 10)... but if, in fact, you try to stay within a 10% margin of that, you could technically be in compliance with the schools having 1% white students, and that would technically meet the requirement.  And, conversely, those schools could have a population as high as 66% Hispanic and 1% white and you would still be within the guidelines for balance.  The realities of those demographics suggest that one of the things that we should, in fact, take a look at here is a boundary plan that would, in fact, provide an opportunity for students to attend the school that is closest to their home and still allow us to be as compliant as the current plan is with the intent of the court order.  We think we can do a little bit better than that when we actually get the boundaries drawn, although that process is going to be difficult. 

 

I do want to make the board aware of the fact that, because this change is going to virtually eliminate school choice opportunities for many of the families in the city of Springfield, with the exception of the senior high schools which will still be totally done on a school choice process, there is a realistic anticipation of some negativity with regard to the public’s perception of this change in plans.  Whenever you undertake to remove something that people have gotten used to--in particular, this issue of choice-- then, obviously, there is going to be some feelings that the school committee and the control board and the superintendent have acted in a way that is contrary to the wishes of the community at large.  I do think the data that we have is that the majority of parents in the Springfield community have not been choosing the school that is closest to their home.  In fact, more than 70% of the parents that are making the first choice for their children to attend school—whether that’s kindergarten at the elementary level, 6th grade at the middle school level—have been choosing the school that is not closest to their home for a variety of reasons, one of which is to have the opportunity to get transportation.

 

There is a  feeling that some of the neighborhoods and streets are not particularly safe.  There has been a feeling, on the part of many parents, that the bus ride is something that they desire, not only for safety issues, but also for the fact that it could provide additional care (adult supervision of the child) possibly for a long as an hour bus ride in the morning and an hour bus ride in the afternoon.  These are significant issues that the community, of course, is going to be struggling with as we move forward with this plan.

 

Projected Savings from Elimination of Racial Balance Busing

 

The documents that we’ve provided you do show projected savings.  The current  transportation costs in ’04--’05 for the elementary and middle schools totals approximately $4.76million for regular education transportation.  (Special ed transportation is currently almost a $7million ticket item for the city which is another area that we are going to be examining with a special task force that is going to be looking at special ed transportation.)  But the current cost for elementary and middle schools for transportation is $4.76million.  Then there are additional costs for parochial elementary schools, the charter schools and Cathedral High School which is outlined on your sheet for a total of just under $1million.

 

We are projecting that if we were to implement a boundary school plan, for example,next year without any grandfathering of existing school assignments, the savings at the elementary and middle school level would be about $2.72million.  Those savings, of course, are savings to the city side budget, because the city is, in fact, paying for these transportation costs. 

 

We are recommending, and the superintendent and staff will be recommending, that we do grandfather students in their current school assignment for two years and as we begin to roll out this plan.  That would provide an opportunity for the current 6th grade students that are in a middle school of their choice to allow them to stay at that middle school for grade 7 and grade 8.  and what we intend to do would be to start this boundary school process for all new students coming into the city next year and for all kindergarten students and grade 6 students next year, and then, in the following year, we would pick up the next grade level and then, in year 3, we would make sure that all assignments were done on this basis.

 

The one exception that we would recommend would be that students that are in an elementary school, where the parents would agree to continue to transport that child until the point that they had finished grade 5, that we would allow them to do that on condition that they are transporting their child. We believe that we can accommodate that plan.

 

There are two caveats to this that I think are important to point out:

 

Number one is that we will be going out to bid in the next few months for the comprehensive bid the total transportation package for the city.  That is the first time that we will be bidding together both the regular education bus transportation routes and the special education bus transportation routes.  We did a short-term bid of one year for this particular school year so that we could get those two on-cycle, hoping that with a volume bid that we could get the cost of operating each bus lower since we would be combining the two.

 

The other issue which makes it very difficult to project the savings is that we are going to continue to operate several citywide magnet programs.  The good side of the magnet programs is that it does give parents some additional choices.  The down side of the citywide magnets is that it does continue to have recurring costs for transporting students from various sectors of the city to the citywide magnets.  Those magnet programs, I think, are very, very important to the city in terms of providing options to parents for attractive curriculum programs that we hope will continue to have a significant number of middle-class families choosing to keep their children in the Springfield public schools.  So, the magnet programs are an important and attractive feature, but there is a cost associated with them in terms of transportation.

 

AL:  May I ask a question?  You said $2.72million was the maximum [unintelligible]?  On your transitional grandfathering, what would be the savings there?

 

JB:  Well, it’s a little difficult for us to estimate that, because we’ll be into the new bid, so even the $2.72million actuallymight be —actually, that might be higher.

 

AL:  [unintelligible] the new bid.

 

JB:  We would be transporting about 3000 students less.  Depending upon how the routing went...

 

AL:   Because some of them would be grandfathered.

 

JB:  Yeah, with the grandfathering.  In year one it would be 3000 students less, in year two it would be 6000 students less, so we would probably be looking at somewhere in the neighborhood of between $700,000 and $1million in year one, probably about $1.5 million, somewhere in that neighborhood, in year two, depending upon, again, what the bid looks like and so forth.

 

I think, the one thing that the school committee did vote approval of at that meeting in October also was to align the starting times for all of the high schools so that we can do triple runs with the buses.  That action alone will save $1million annually, so that $1million would automatically save next year by taking the action of combining the start and ending times for the senior high schools.  We can have one bus that can do the elementary, middle and senior high school runs, so that the net result of that is a savings of about $1million.

 

CVR:  Dr. Burke, in your package, you have a memorandum from...

 

Sidewalk Construction

 

JB:  ...on the sidewalks?

 

CVR:  Yeah, on the sidewalks, and you’re indicating that in order to accomplish the neighborhood schools program, you’re going to need 13 miles of sidewalks at a cost of approximately $2.1million.

 

JB:   Well, this is a wish list, Mayor.  I mean we’ve been putting out this list for several administrations, trying to get attention to the fact that there are safety issues with the lack of sidewalks in particular sections of the city where the children are waiting for buses and there is no sidewalk area available to them.  When we get inclement weather—icy weather and snow plows plowing the streets and so forth—the students almost virtually have to stand in the street to wait for the buses which is very unsafe. 

 

This is a prioritized list.  The 13 miles is the maximum amount that we think we would actually need to satisfy all the safety needs, but, certainly, we’ve structured this in a priority order so that, you know, if there were dollars available to do some of these sidewalks, there is money from the state that the city gets to do sidewalks implementation, and it might be appropriate to figure out a way to prioritize how some of those dollars could be spent to meet some of the needs that we’ve indicated here.  But this is really a safety issue, and with this source of funds [unintelligible]

 

CVR:  Well, I don’t know of any sidewalk, state sidewalk program unless you’re taking Chapter 90 funds, primarily highway funds, but what I’m trying to understand is whether or not your projections of savings, assuming neighborhood schools, are conditioned upon the expenditure of $2million for new sidewalks.

 

JB:  Well, I, I think, it’s not, it’s not predicated on, on the absolute necessity of that, Mayor.  What I’m, what we’re suggesting is that if, if there is no effort at all to do any of the sidewalk construction, that there will be concerns expressed by the community about the safety of the children in certain areas that we’ve outlined in the attachment, and that’s just a realistic assessment of the perceptions that are out there.  I don’t know that we’re suggesting that we can’t realize the savings without doing those sidewalks, but I’m apprising you and the control board that the community will express, as they have in the past, concerns about the safety issues in these particular areas.

 

CVR:  Could you furnish us with a breakdown of the specific dollar cost of each one of these?  You’ve got about, I don’t know, 25 or 30.

 

JB:  Certainly.  I certainly could.

 

DS:  This is close to my heart.  I don’t only speak as city council president and father of two young daughters in the public school system, and I have a couple of questions, Dr. Burke. As we want to move toward neighborhood schools and we try to anticipate the school busing situation as far as funds, I know yourself and Patrick Markey, any headway at all pertaining to the state’s mandated funds which we have not received of that money coming back to the city of Springfield?

 

JB:  Solicitor Markey may have other information on this, but, as you know, we filed suit against the state some months back, basically suggesting that, because there was a state law that requires racial balance, and because there is, in fact, one district in the state of Massachusetts that has been court-ordered by a state court to implement a plan for racial balance--and that is Springfield—that we felt that the state had an obligation to continue to help with the funding of that court-ordered mandate.  That, I don’t know what the status of that case is right now, but, certainly, if those funds were available, then, obviously, we would be in a somewhat different financial situation, as a city.

 

DS:  And that would be, again to his honor, Mayor Ryan indicated again that busing funds come from the general budget side not the school department itself, $15million this year.  The questions I have is that we have to be very careful how we [unintelligible] I like some of the apects you put in here, because what we need to do—and it’s extremely important--as we move through our valuable middle class individuals of all backgrounds staying in the city of Springfield, and schools face urban challenges. We have a lot of good going on in our school system which my daughters are a part of—I want to clarify--but that’s an important component in keeping people into the school, and I want commend Jake Jacobson who has sunk his teeth in this issue.  The other aspect I have, also you indicated this is about the current situation of  children being in school grandfathered: Are you only grandfathering of middle school students or are you allowing grandfathering and then the option, as you said, to parents, individuals or guardians who are able to bring their son or their daughter to school, they will still be allowed to do that?

 

JB:  Our recommendation is to do the grandfathering for a two-year period for both levels, for the elementary school level and the middle school level.  At the end of the two years, we will have essentially have taken care of the current 6th graders who are in the middle school that they chose.  We would continue to have as an option, for parents at the other elementary level, if they were willing to transport their child, that that option would still be available to them until they finish with grade 5.

 

DS:  And you mentioned about the school choice magnet schools “No Child left Behind”? It would be great if we could go back to neighborhood school, but obviously, some schools are performing very, very well, some schools are performing the best in Western Mass., we have others face that are facing challenges.  That’s going to be the [unintelligible] that you’ll face head on or that I’m going to face head on as an elected official.

 

JB:  That’s right.

 

DS:  And we have to be cognizant of that besides the cost savings.  The last aspect I’ll leave you with his honor Mayor Ryan brought it up: sidewalks.  Also, some areas of the city are “questionable,” unfortunately, right now.  Besides sidewalks, you might have to look into police patrols at that time whether in the morning and the afternoon, so I think these are all aspects that have to be put into play, because you can’t spare a dime when it comes to the safety of our children, so I like that we’re moving toward this angle, coming back to  neighborhood schools.  I know, myself, when I went, walked to elementary here in Springfield, and then middle and then high school once you picked up the bus. People have to understand that busing will be completely not gone at all, but I’m glad that you’re cognizant of some of these issue, because this is make or break as far as attracting residents to the city of Springfield and keeping residents in the city of Springfield and also retaining and developing economic development for the businesses and [uninteligible]..  Thank-you, Mr. Chairman.

 

TT:  [voice not recorded]

 

JB:  No, no. What it means is you schedule bus routes in a timely manner so that one bus can make an elementary school, a middle school run, a senior high school run within a period of time.

 

AL:  This sounds like a more efficient schedule.

 

JB:  Absolutely.

 

AL:  Any other questions for the superintendent? OK. Thank you very much.  The only thing I have left is New Business.  Any new business?  Mayor?

 

Investigation of Douglas Greer’s Allegation of Police Brutality

 

CVR: Mr. Chairman, I have a matter to bring to the attention of the board a matter of some notice here in the city.  About a week ago, I received a visit from a gentleman named Douglas Greer, a man of about 35 years old, principal of a charter school who told me that he is suffering from diabetes and has been for quite some years.  And over the course of at least the last several years, he’s had the frequency of finding himself in a diabetic shock, a very serious condition for any person to have to deal with. 

 

He told me that several days before I met with him last Monday, that he evidently had one of these diabetic shocks in the early evening of the previous Thursday, and had pulled into a gas station on South Main Street.  And he doesn’t remember much beyond that until, at some later time, he woke up and he was on the ground, and there were police officers there, and he was then transported to the hospital where they treated him for his condition.  But the allegation was made of police brutality, and so it’s an on-going matter.

 

            I would just remind the board, the control board, that part of the overall enabling legislation creating this body gives the control board not only the power—but the responsibility, I would say—to ”appoint, remove, supervise and control all city employees and have control over all personnel matters.” 

 

            When Mr. Greer came to see me, I was aware of the fact, generally speaking, that there was a procedure within the police department to investigate any claims of internal wrongdoing, and certainly, police brutality would fit within that description, and, as a matter of fact, my understanding is that it’s headed by two lieutenants, Lt. Brown and Lt. Cheatham who have had this responsibility for some time and generally are well-respected within the community.  However, because of the nature of this matter, I asked that the city solicitor Markey, in whom I have great confidence, to play a significant role to make sure that the investigation was done in as expeditiously as possible and as thoroughly as possible and with a sense of integrity that I know is a part of Mr. Markey’s day-to-day make-up.  I also indicated that I would like to have the officers in question restricted or moved to administrative duties pending the outcome of this investigation.

 

            On Wednesday of this past week, Mr. Greer, by that time, had obtained counsel, and counsel indicated that he was going to file for a criminal complaint against the officers involved.  That changed on Thursday or Friday when it was indicated that, indeed, they would not seek a criminal complaint, but would go ahead and cooperate with the investigation.  Mr. Markey and the lieutenants met with Mr. Greer and counsel on, I believe, Thursday? [looks at Mr. Markey] Friday and did get the information they asked for from Mr. Greer.

 

            However, over the week-end, that has changed again, and, on further reflection, it has been decided by Mr. Greer and his counsel that they indeed will go and seek a criminal complaint, which, of course has to happen through the court system, and that  furthermore, they are going to be asking the Department of Justice to come in and conduct its own investigation of the facts that surround this.

 

            This is a matter that certainly concerns all citizens of the city to make sure that it is handled in a fair and yet thorough manner.  And, realizing, as I say, that the enabling legislation gives this board significant responsibility in this area, I just wanted to, first of all, make everybody on the board aware of the facts as we know it, I’ve dispassionately given it to you so that you’re up-to-date, but also to ask that the board, by its vote authorize Mr. Markey and the Internal Investigating Unit to continue ahead as best it can, or as best they can, in finding further facts.   

 

It may be that the Department of Justice will come in.  None of us know right now, because I think the question is just now being made or within the next day or two will be made, but then further to support, what I think is the appropriate thing to do and that is that the officers in question be assigned to administrative duties pending the outcome of this investigation.  I’d be glad to respond to any questions that any of the members have.

 

[No questions were forthcoming.}

 

AL:  Motion in two parts:  Continue the investigation which I assume Mr. Markey would still be leading and to put the officers involved in the incident on administrative duties pending the outcome of the investigation.

 

**Motion passes unanimously

 

AL:  We’re going to move into executive session for purposes of talking about collective bargaining, and we don’t intend to come back.