FINANCE CONTROL BOARD MEETING, December 17, 2004
Present: Chairman Alan LeBovidge, Mayor Charles V. Ryan, Counselor Domenic Sarno, Thomas Trimarco, Jake Jacobson, Bill Metzger (Clerk), Philip Puccia (Executive Director)
Unanimous approval of minutes of last meeting.
Establishment of a Public Safety Advisory Council
Alan LeBovidge: There’s a few votes that we have to take today, so I think that I’d like to get to those votes first. The first one is the establishment of a public safety advisory council, and maybe we could take a couple of seconds and have Phil Puccia kind of walk us through what this proposal is.
Phil Puccia: Thank you, sir. Attached to your package is description of a public safety advisory council, headed by Secretary Ed Flynn, the secretary of public safety, the colonel of the state police and the state’s fire marshal. The objective of the council would be to provide advice to the control board as well as the police department, the fire department, and the associated city department involved in public safety. We expect them to play a role in helping us to analyze the report for the police study that is about to be undertaken, I think, beginning in January, as well as for a similar study of the fire department. One of the things I think the board would be pleased about is that these are folks who have experience not only in general public safety issues, but, in particular, Secretary Flynn’s experience in Chelsea as the chief during their receivership having to deal with some of the issues that we are dealing with today. It is meant to assist the Springfield police department and our mission here on the board, so I have attached a detailed description in the executive order, and I believe Secretary Flynn will be joining us shortly, and I ask the board to approve the submission in your package.
AL: One question: I assume these are non-paid jobs.
PP: Yes, they are, sir.
AL: They don’t get any extra compensation for doing this.
PP: No, they do not.
AL: Any questions?
Domenic Sarno: Mr. Chairman, I just wanted to appreciate Secretary Flynn coming, and I want to know, is this superseding the commissions that we have or are we going to be working together with the police and fire commissions?
PP: No, it does not supersede the duties of either commission. It is acting as an advisory council to both the control board and both commissions.
DS: So they will work in tangent [sic] together.
PP: I believe so, yes.
DS: And the public safety aspect, I just want to commend our dedicated and brave fire fighters. They’re dealing with, continuing to deal with the American Boche factory fire that’s going on right now, and when Secretary Flynn comes, I would have some questions pertaining to our gang task force initiative coming up—I have a meeting on the 20th—and the safeguard unit. But they’re to close, they’ll work hand-in-hand with our established commissions, boards that we have pertaining to fire and police.
PP: The answer is yes.
DS: OK. Thank you. Thank you, Mr. Chairman.
CVR: Mr. Chairman, I’d like to suggest that, my understanding is Commissioner Flynn is in town and is due here, is he?
PP: Yes, sir.
CVR: I’d like to leave this matter right where it is until he gets here, and then we can hear what he has to say, and then vote on the proposed executive order. All right?
Setting the Tax Rate
AL: Everybody knows about it. The second item is the tax classification, the tax rate for Springfield. Would you like to...
PP: Actually I’d like to, if we could have the assessor, Ritchie Allen, give the board a brief explanation and the specifics of what we’re asking the board to approve.
Richard Allen: I’m pleased to report this morning that our taxable value has increased over 11% in Springfield compared to last year, fiscal 2004. This year was a certification year, and we just a few days ago received certification of the valuations from the Department of Revenue. I should note that the Bureau of Local Assessment was terrific to work with. We had tremendous service and cooperation, and it made the process, which can be difficult to navigate, made the process simpler and just easier from the local perspective, so I’d just like to note that.
I’ve just given you some highlights of the increases in valuation. Essentially, what we need the control board to adopt this morning is a residential factor which would allocate the tax levy of $131million and change to the various classes: residential on the one side and commercial, industrial and personal on the other side. The city council voted a factor Wednesday evening, and then, yesterday, we had a development and that was that we identified some additional new growth of $69,000 above that which was known on Wednesday. So we would propose that this board adopt a factor which takes recognition of that and allows us to approach the levy limit without exceeding it.
Alan LeBovidge: ...that means as far as just the...Just give us the tax rate so we can just...
Phil Puccia: And if you could just explain what the council approved on, I think it was, Wednesday evening and what we’re talking about today.
RA: OK. Wednesday night, the council approved a residential factor which essentially established tax rates, then, of $17.50 for residential and $33.35 for commercial, industrial and personal.
Domenic Sarno: Both the savings, Mr. Chairman, and $1.49 residents on the rate. We made $.83 to the business.
AL: From last years rate.
DS: $17.50, $1.50, so $1.49, a buck fifty savings on the rate, we’ll have to do the assessments,and $.83 down on the business tax rate.
AL: OK.
Mayor Ryan: What’s the business rate again?
RA: $33.35 as of Wednesday evening. And then, with the additional levy identified yesterday, to accomplish capturing the additional levy and to try to honor the spirit of the city council vote, there’s really two options that we would suggest for your consideration. One would be a residential rate of $17.50 which would result in a commercial, industrial and personal rate of $33.39. So there would be no increase to the residential rate, but $.04 on the commercial, industrial and personal. Or, another alternative would be a residential rate of $17.51 and a commercial, industrial and personal rate of $33.36, so a penny to each category. We’ve preliminarily screened these rates with the Bureau of Accounts, and it appears that both of these, the factors that we have, the residential factors that we have to support these rates, appear to work and achieve these rates.
AL: Do you have a suggestion?
Jake Jacobson: This is because there is additional growth?
RA: Additional levy yesterday of about $69,000 on our levy limit.
CVR: Well, additional over the 2.2.
RA: In September, when your board approved the city budget for the remaining nine months, at that time our estimate was $1.6million of levy growth from new construction and additions to personal property. In fact, we’re over $2.3 million in growth so if there’s...
JJ: How’s the new growth calculated? I mean, what counts as new growth—if I put an addition on my house, is that new growth?
RA: Right. Any physical change in a structure. Most of our new growth actually is in the personnel property category, where any new item of personal property, utilities.... Our new growth value from the Comcast this year—they had a lot of construction in the roadways over the last couple of years--and Comcast, our new growth value from them alone was over $9million. Western Mass. Electric was over $11milllion. So personal property accounted for about $1.6 of that $2.3million.
Thomas Trimarco: What are the current rates for the commercial and residential?
DS: $18.99 residential.
RA: And $34.18 for commercial.
TT: OK. Thank you.
CVR: Mr. Allen, you’re saying that the levy now has increased to $131,042,000.
RA: That’s the levy limit.
CVR: Right. And would you spell out for us in round numbers the increase from the current year or, let’s say, fiscal ’04?
RA: It’s about $5.4million.
CVR: OK, and that’s a combination of two things, as I understand it. One is Proposition 2 ½: it’s 2 ½ % of what our last year’s limit is--and that’s as far as we can go in increasing the levy—plus the $2.3million of new growth gives us the $5.4.
RA: Precisely correct .
CVR: So it means that from the taxpayers of Springfield, this coming year, the city will be raising $5.4million more than it did last year.
RA: That’s correct.
CVR: OK, and, again, the split is between business and industry on the one hand and the homeowners on the other hand. And the homeowners represent approximately how much of the value?
RA: 74.45%.
CVR: OK, and that would mean that the business side represents 25, 26%?
RA: 25.55%
CVR: OK, so 25 of the city’s value is in the business side, right? And, in dollars, approximately, in percentages, approximately how much does the business side pay in dollars?
RA: Approximately $50million in that range.
CVR: No, I’m asking percentages.
RA: Oh, I’m sorry, about 40% of the levy.
CVR: About 40% of the levy? And 26% of the value, but they pay 40% of the cost.
RA: In round percentages, yes.
DS: Mr. Chairman, are we like last year we had some increase with the telecommunications. Are we being court challenged on any of this levy?
RA: Well, councilor, you recall that last year, Sprint, on the heels of a court ruling, the Commissioner of Revenue certified, pursuant to his statutory obligations, for Class 505, which is a class of property, telecommunications personal property, which, by statute, the commissioner certifies to all local assessors. We’re obligated to adhere to those numbers. Last year, Sprint was $114million, whereas the previous year, it had been under $500,000. So, no surprise to anyone, Sprint created a leasing company, a Delaware statutory trust, and moved a lot of that taxable property into that Delaware statutory trust, hoping to elude personal property taxation, and they created it specifically for that purpose. MASSFONCO was the name of it, the company. We, in consultation with the law department, we are actually taxing—and there is value in these number which I’ve presented this morning associated with MASSFONCO. We have used exactly the same number that the Revenue Department established last year, and we’ve attributed that to MASSFONCO as a leasing company. We toured the facility last week with an appraiser that we have hired, and I expect within 30-45 days that we will have an appraisal report that will allow us to proceed—to litigation, if necessary.
DS: OK. Just we’re fighting now for every dime we can get now. We don’t want to get blind-sided with any...
AL: But you’ve reserved that amount, right? Until this litigation is resolved.
RA: Absolutely. Their tax bill this year will be about $3.8million under either of these rates, MASSFONCO, and I’m quite sure they will challenge that.
CVR: So, we’ve got about $3.8million at stake and, depending on probably the court resolution of this dispute.
RA: That’s correct.
AL: This is not an issue that is unique to Springfield. This is an issue that several cities and towns in Massachusetts have.
RA: Yes, I’ve spoken with assessors in Woburn and Newton, Framingham, Boston around the state...
AL: And they’re all contesting it, doing the same thing basically. So, what is your recommendation when you gave us two options of moving each one up a penny or taking and putting the difference all on the commercial, what is your recommendation?
RA: We would propose that the board adopt a factor which would result in a penny increase to each of the rates. That would be a $17.51 residential rate and a $33.36 commercial, industrial and personal rate.
AL: That’s the proposal, OK.
DS: Split the difference.
[Unintelligible exchange.]
TT: I have just one other question before the vote. These percentage increases that your hand-out showed, do you have any sense of what the comparables were for the prior year? I mean, what are we seeing happening right now, taking this as a snap-shot in terms of these increases?
RA: It’s consistent with the trend of the last few years where most property owners are paying more than the previous year.
TT: No, but I mean, this is based on values, am I correct? These percentages that you’ve given us are assessed values.
RA: Yes, sir.
CVR: But it’s fair to say, isn’t it, that looking at a significant decrease in the tax rates that we are, at the same time, looking, by and large, at increases in the tax bills.
RA: Correct.
CVR: Because of the increased value combined with the rate and the value: rate goes down, value goes up, and when you do the final arithmetic, most of the people of Springfield can expect an increased tax bill.
RA: Right. We have an additional $5million, $5.4million of levy to distribute amongst the 45,000 taxpayers.
AL: Have you done any analysis of what the average tax bill, residential, would go up?
RA: Yes, we have, and it’s less than $100. for an average single-family home owner.
CVR: What do you mean by average? What’s the average?
RA: $120,900.
CVR: So call it $121,000 value. You’re saying that it would be less than $100. Obviously, is it be fair to say that if its twice that value, you’re talking $200. or in that neighborhood?
AL: It looks as if most of the value increases is in the three-family and in the apartment buildings.
RA: Rather striking appreciation in those sectors. I should note that we’ve making interim year adjustments for about a dozen years to avoid the shock of a major value increase in a certification year.
AL: That’s good, that was good. OK, do I have a motion to accept the proposal of $17.51 and $33.36?
**MOTION PASSES unanimously.
Medicare B for Eligible City Employees
AL: The next item on the agenda is the approval to participate in the Section 18 Medicare B provision, so, Phil, do you want to kind of take us through that?
PP: Actually, with the previous discussion, I would defer to the Mayor.
CVR: This is something that we were looking at prior to the creation of the control board by the state legislature. It came to our attention that, in spite of the fact that many other communities in Massachusetts had taken the necessary action to opt in for Medicare B, that Springfield had never done this.
And, briefly, what we’re talking about is that with respect to anyone who—and it’s primarily retirees--qualify for Medicare, which means they have to have some social security history in their work background, that if you qualify for Medicare and if we can have Medicare B, the United States government will essentially pay 80% of the gross cost of the medical expenses. We did an analysis on this and found that there would be very, very substantial savings, and so we went forward to try and create a program which would mean there would be no increase in price, because of this particular aspect and no change in coverage—no detrimental change in coverage. And we found out that, over a three year period, that the city could save about $18.6million and that, over that same period of time, the retirees themselves, in their share, would save approximately $7million.
And so we asked the city council to approve this and, unhappily, in a recent meeting, that request or that motion to adopt Section 18B was defeated in the city council by a 5 to 4 vote. And so, unless the control board votes in lieu of what the city council, in my opinion, should have done, we will forfeit extraordinary sums of money, and the problems aren’t going to go away. The cost of health insurance keeps soaring, and to pass up an opportunity to save the kind of money I’m talking about is only going to come once, and I’m certainly hoping that the control board will take the necessary steps today to enable the city to move into a situation where the United States government will, in fact, pay 80% of the cost of health insurance for our retirees.
I think that most of you are familiar with the issue, because we have talked about it in previous meetings. We certainly can have a discussion or respond to questions. And I then have a formal motion—it’s a short motion--which I would read when we’re ready to come to a vote on it.
AL: Any discussion or...?
DS: Mr. Chairman? I just wanted to indicate with the Medicare B that many other municipalities in the Commonwealth, whether large or small, pursue this—it’s a prudent decision—but the question and concern that I have—and I did vote for it on the council—is that I’m concerned about the retirees that do not qualify for Medicare B, because they don’t have enough social security quarters built up. So, in turn with the general changes that are occurring with the overall health insurance, they’re going to face increased costs of deductibles and co-pays. And I would like the control board to consider looking at some type of relief when it pertains to retirees that fall through the cracks, that do not qualify for Medicare A nor B which is a prudent and good move by the city and I support that, but these are seniors that are on fixed incomes that do not have enough social security quarters and they will face some regular insurance hikes--the deductible increase and co-pay increases--so it’s something I’d like to throw on the table for consideration for the seniors who do not qualify for Medicare B. I have no problems with Medicare B.
AL: Marilyn [Montagna]?
Personnel Director Marilyn Montagna: If I understand your question correctly, you’re wondering what, if any, impact there will be on retirees who do not qualify for Medicare?
DS: Yes, I have no problem with the Medicare B, I’m, the retirees that fall....
MM: The retirees who not qualify for Medicare will stay in the same plans as the active employees, so they will remain with the same plans—and the retirees have always had the same costs in terms of premium contribution rates as the actives, and that would continue for those people.
DS: I understand that, Ms.Montagna. What I’m asking to be reviewed or considered is many of these retirees are actually on fixed costs. Now, my insurance is too--I’m going to face an increase also. The options we have on the table are not good options. I want to consider. I have no problem with the Medicare B. What I’d like to be looked at within reason is the retirees who do not qualify for Medicare A nor B, they’re going, they’re on fixed incomes, they’re going to face increased costs in deductible and co-pays. If something can be looked at, I’m just throwing it out for suggestions, whether a retiree relief fund or some type of give within reason for that, I think that would be fair. Medicare B, I have no problem with.
AL: If understand correctly, let me just understand. I think that is a separate issue from this situation. We’re just voting on the narrow B. What you’re raising is an issue that goes to all health care plans, because they’re covered by the active program, whatever program the active employees are covered by, right? So that has to be looked at as we look at all the health care benefits, so we’re not touching that one at all today.
DS: Well, I wanted to bring it to the attention of the board. Would I like is to have it looked across the board? Sure I would, but definitely for the retirees. I’m just piggy-backing off B. I have no problem with that; it’s a prudent and right decision to make, but for retirees, again, that do not qualify because they don’t have enough social security quarters, Medicare A and B, with the regular insurance increases that are going to occur, they will face increased costs of deductibles and co-pays. I’m just saying in that one caveat, we should look at that to see if there’s any type of relief, within reason, to give them some type of support. Nothing to do with Medicare B.
PP: But that is an issue that is separate and distinct from today’s vote.
DS: And I’ve clarified myself that I support Medicare B, but the point in time is that put on the table to review and look at that if there is any type of review that type of relief.
PP: I think that what we can do, and I’m not sure if we’ve already begun this, is an exercise precisely about what you’re saying, councilor, that would allow us to do some sort of analysis to the extent that it’s possible that we may be able to provide relief for certain groups within the plan, and, but we can’t make any commitments at this point, because we don’t know what the numbers will say. But we commit to doing an analysis and we [unintelligible].
DS: That’s all I’m asking.
MM: And, in fact, that is in process.
PP: It’s in process now.
AL: Jake, did you have a question?
TT: This, let’s make clear, this savings of $18million does help with regard to what these total costs--without this, these costs would be borne...
CVR: That’s right. They would be borne anyway.
TT: They would be borne by the retirees as well as actives.
PP: They would be reflected in higher premiums for everyone if we did not make this change.
TT: Let’s not lose sight... I appreciate your point, but, I mean, this, to me, in terms of saving costs for the city of Springfield’s health plan is like a no-brainer.
DS: I have no problem, Tom, with the Medicare B--It’s a prudent, right decision and I’m just looking at that caveat of the retirees that...
AL: Gottcha.
PP: Could we have two motions then before the board, then, one ...
CVR: I’d be glad to read...
JJ: Domenic, I know that it must have been a long and extensive discussion in the council meeting, and so I’m certainly not asking that you do a blow-by-blow, but I’m surprised when there’s a material saving to the city, knowing that the city is in dire financial straights, and we’re told there is a reduction for the retirees (there is an issue that you’ve told us about of some retirees that we’re going to have to do the analysis on), but it looks pretty much like a win-win situation as presented. And how is it again that a majority of the city council didn’t see it that way? I mean, it makes me feel like I’m missing something obvious.
DS: Well, I was in the minority of the vote with three other colleagues on the Medicare B vote. They’re entitled to their opinion put forth. They had issue with it. I thought, as I had expressed, that the prudent decision was to pursue the Medicare B with the nearly $19million in cost savings and other municipalities, whether large or small in the Commonwealth, pursuing this. But again, my colleagues, rightfully so, respectfully, have their own opinions on them. They felt that they didn’t want to move forward with it.
JJ: And that I understand, but if you could just characterize, and I know it wasn’t your position, but I’m asking you as a participant, since I wasn’t a participant in that discussion, to just characterize the sense of the majority of the council that voted against it. If you were going to recap their arguments and logic--they didn’t vote in favor of this--why? What would be the headline version?
DS: Well, I’m not going to speak for my members. They made a decision with the reasoning of why they.... Some said they felt uncomfortable with the timing of the regular insurance—and, again, I don’t want to mix issues here, they felt uncomfortable with the regular timing of the insurance changing with overall general insurance with this coming out. So they made their opinions known. We made, the minority made, our opinions known as far as moving forward. They’re entitled to that right, whether I agree with them or not, but the bottom line is the control board can supersede them with this vote.
(Interruption)
AL: OK. Any other discussion?
Man’s voice from the audience: Excuse me...I represent 4000...I have a right to speak.
AL: You’re out of order. You’re out of order. This is a public meeting, it’s not a public discussion. You’re out of order. Sorry.
Man: I have a right to speak.
AL: No, you don’t. You’re out of order. You don’t have a right to speak here. No, sorry. Sorry. Sorry. I refuse to let him speak, because this is not the purpose of a public meeting
Man’s voice: Let me ask you a question. The question is the $78.40, they won’t guarantee [unintelligible]....
AL: Mr. Mayor, would you like to read your proposal?
Man’s voice: That’s what Domenic wanted to tell you. The other councilors stood up for retirees... What kind of a country is this? Just guarantee the premiums. State law says that [unintelligible] ...public finances, not to kill the people.
AL: Please sit down. You’re out of order. I don’t want to enter into a discuss with you. You’re out of order.
Man’s voice: ...million dollars over three years. $78.40 a month premiums.
go ahead. All we’re asking is that you’ll guarantee the premium. Go ahead. {unintelligible]
AL: We’ll either continue this in an orderly fashion under the rules, or we’ll just go and do it...
Man’s voice (shouting): You don’t allow input. ..You’re out of order. You need to hire high priced security for your meetings....a cop for your meetings.
AL (to Mayor): All right, go ahead.
CVR: I’m going to read this motion. “Whereas the General Law Chapter 32B, Section 18...
Man’s voice: [continues unintelligible shouting] Thank you.
CVR: ...which allows cities and towns to establish a Medicare extension plan for those retirees that are eligible for Medicare part A and part B, and where as said act also provides for local acceptance by the local legislative body, and in the city of Springfield under Chapter 169 of the Acts of 2004, adoption of said act requires the approval of the control board, now therefore be it ordered that the control board of the City of Springfield hereby accepts the provisions of Massachusetts General laws, Chapter 32B, Section 18 relative to Medicare coverage for eligible retirees. And be it further ordered that the effective date of the program shall be January 1, 2005.” That’s my motion.
AL: OK. Is there a second for that motion?
DS: It is written in the law, that the penalty, the city will cover that penalty.
AL: That’s correct.
**MOTION PASSES unanimously (with audience member “voting” against.).
AL: Still we’re waiting for Secretary Flynn to show up. Is there one issue on the retirement board?
PP: There are two other issues: one is a discussion of a...
Public Safety Advisory Council for Springfield, Secretary of Public Safety Ed Flynn
AL: Just a second, is that Secretary Flynn here? Secretary Flynn, come on down. I know he’s on a tight schedule. I’d like to introduce to the board the Secretary of Public Safety for the Commonwealth, Ed Flynn. Welcome to the Finance Control Board; you came in at a nice time. We’re in the process of establishing a public safety advisory council, and before we voted on it, the members wanted to hear from you, and get your thoughts as to how you see it operating and how we can help the city of Springfield.
Secretary of Public Safety Edward Flynn: I have been asked what I think about the executive order that’s being considered today by the Financial Control Board in terms of establishing a public safety advisory council for the control board, chaired by me and made up of people from the executive office of public safety, from the department of fire services and the Massachusetts state police. And what I would convey to you is that we come here wanting to help the Financial Control Board and the city of Springfield be successful in their on-going efforts to confront the problems that currently are challenging the city, not only economically, but in terms of crime and quality of life. I recognize that this city is made up of a large number of extraordinarily hard-working and dedicated public safety people. I also recognize that they are significantly challenged right now by our current economic and financial circumstances. And one of the things we’d like to be able to do working with the control board is try to provide useful advice based on a broad perspective of experience and interdisciplinary capabilities to help make the best use of the money available to the control board, to assist the police and fire departments in fulfilling their mission.
We know it’s a difficult time. Nobody’s coming out here wearing a cape. Nobody’s got an “S” on their chest. Nobody is gainsaying the inherent expertise or ability of those two fine institutions, but we believe we can bring some assistance in terms of advice, council and perspective that can make your deliberations more useful and helpful to the community you want to serve.
CVR: In the past, Mr. Secretary, I know from time to time the city has been fortunate enough to receive the assistance of the state police. Would you see that continuing?
EF: Yes, Mr. Mayor. The state police has worked in the past with the men and women of the Springfield police department, and I think, made some real significant gains in terms of dealing with crime and disorder.
As I’ve conveyed to the Colonel and the police chief both, anything the state police do here is going to be done at the behest of the Springfield police department. I mean, it’s very important to recognize the inherent expertise and capability of that institution, the fact that they’re going to be here after the state police leave. So anything the state police do is going to be done with and for the Springfield police department. This is not a situation where we see one agency imposing its will on another by any circumstance. There are lot of long-standing good relationships between members of the gang unit of both agencies, members of the narcotics units of both agencies. We have no reason to believe that the dedication of people from both those institutions won’t be a good synergistic effort to help keep this place safe.
AL: How do you see your relationship with the existing police commission?
EF: Well, I think one of the things I get to do is help the Financial Control Board navigate a little bit. I mean, there are a lot of things going on right now, there’s a lot of history, there are a lot of perspectives, and one of the things I just think I can bring is a perspective of more than a few experiences of my own personally and professionally, but also a nationwide network of contacts in terms of gaining perspective on some of the current issues. I think the sincerity of purpose of all the people involved in both the police department and the police commission is self-evident. And, I think one of my challenges is working with the control board to gain some perspective on both people’s point of view, and to help the control board make good decisions that value the information they are getting from all interested parties.
DS: Mr. Chairman? Mr. Secretary, first of all thank you for coming out to Springfield, appreciate that. Happy and healthy holidays to you and your family. Just to bring you back, I had comments before you had arrived, again you will work with the established commissions, fire and police, really look to supersede, but to only enhance. I know, last year, when we brought in your gang tactical unit to work with our men and women in blue was very beneficial. And that’s something that we want to continue to look in, and we formed our own safeguard unit which I’m hoping that continues—it’s been very beneficial in our neighborhood downtown areas, but I just wanted to point out that you will handle and work with our commission. We appreciate your expertise. We appreciate the state police with their tactical support with our men and women in blue. We do work well together, and right now, we need to stem the perception that Springfield, that it is unsafe, so we’re looking forward to you helping out in that issue and your input, man and woman power or any type of monies that might come his way, as you know maybe, as you’ve come down here we’re currently dealing with a 6 alarm fire at the American Boche plant on the Springfield/Chicopee line where we have upwards of, I think probably, 130 firefighters from all over the area. And, obviously, we’re dealing with times that we’re shorthanded on the street with men and women in blue, and also in fire, and deployment is an issue we’d like to look into, but I wanted to point out about our safeguard unit which I think is very important to stay on the street, and any type of tactical continued support you could give us as far as dealing with gang situations, we’d deeply appreciate, Mr. Secretary.
EF: Well, I think you make a very important point, and that is it’s not a question of having to reinvent the wheel here, in some regards. There is a history of some very successful interventions that have been done here about gangs, guns and drugs. We recognize that the reason that we’re here is because, primarily, you know, a long-standing financial condition has created a situation in which the capacity of the police department has obviously been diminished. That’s an on-going challenge. It’s going to take time to fix, we recognize this. So our job here at the executive office of public safety isn’t to impose our will, but rather to bring what state assistance is available both in terms of personnel and expertise to try to assist this agency that has been successful in the past be successful again. And I can’t stress that in any stronger terms. I know our fire marshal has the highest regard for the fire chief and men and women of the fire department here. I know the Colonel has great respect for the Springfield police department: its leadership, its rank and file. We’ve got capable people. We’re in a tough spot right now, and we sincerely wish to be of genuine assistance.
DS: Mr. Chairman, I just want to point out it was this board also during these difficult fiscal times that was able to allocate more money toward bringing back more police officers, some on the fire and also to deal with the Gemini building, too, one of our first couple of meetings.
CVR: I’d like to say Mr. Secretary, that as mayor of the city, that I’m very appreciative that you and your colleagues, the head of state police and the fire marshal, are willing to come in here and to be of this kind of assistance to us. I‘m not embarrassed to accept the kind of assistance that you can give, and I think it’s appropriate, and I’m very happy that the state administration has allowed you individuals to make yourselves available. We’ve a big job here, as you yourself have so well said. We’ve got two wonderful departments here that have done yeoman work under the most difficult of situations, and to now have the support and the expertise of what you can bring and your colleagues and the state police and the fire marshal’s area is really a very, very important thing for the people of the city of Springfield. I want to express publicly my deep appreciation to you for this, and I’m looking forward to working together with you, and not only as a member of the control board, but also as the mayor of the city.
EF: Thank you very much, Mr. Mayor. Those are very generous comments, and, just on a personal level, just to share with you: over the course of a police career that spans 32 years, I managed to work in 5 condemned buildings. I know what it’s like to work in a city that’s had tough times, but still has to fulfill those basic purposes, still has to keep people safe, still has to make them feel like they are living in the right place and can trust that they’ll be safe sending their kids to schools. Urban police work is a tough job done by dedicated people who are fulfilling an essential service, and anything I can do to help you help them, I’m more than pleased to do so.
AL: And while you’re here, we’d like to have a vote on the executive order.
CVR: I’m just wondering, is there somebody who should read this aloud?
PP: If I could suggest accepting the motion as drafted, and the city clerk will record it as such—we just have a motion in favor.
**MOTION PASSES unanimously
AL: Well, welcome aboard, I think you do have your cape tucked down behind. We’re looking forward to all the help you can give us, I know you have a busy schedule, and thank you, sir.
Payments to the City by Non-Profit Organizations in Lieu of Taxes
PP: We have two other items, Mr. Chairman. One is a brief discussion of what on your agenda reads “PILOT program” which is “payment in lieu of taxes.” This is an approach that many cities have used around the country and the Commonwealth for not-for-profit institutions to participate financially in the success of the city in which they reside for services like police, like fire, like the plowing of streets during the wintertime, but what I would propose that we do: there are a number of examples on which we can refer, but I would propose at this juncture that the board appoint some sort of working group or maybe commission is the wrong term, but to include the mayor, a representative of the control board, myself, and some additional stakeholders within the community who will ultimately participate, we hope, in this voluntary program. We’re going to probably need a couple of months worth of work and be able to come back to you at that time with a recommendation for the implementation of a payments in lieu of taxes program. I just wanted to get the issue on the table to the board, and the community at large, that we will be reaching out to these institutions to begin these discussions.
AL: OK, any questions?
CVR: I’d like to just comment, because I think it’s just it’s important to really understand what is now unfolding, and that is this: that it’s clear by the first four or five months of the control board that we’ve got a very, very deep hole in this city, that we’ve somehow got to climb out of. And the chairman has said several times publicly and in our meetings about sharing the pain, and really what is beginning to become clearer is the overall strategy that I think, and I think the control board shares this view, is that we are trying to make sure that the solution to the city’s enormous problems does not come from just one sector or one element of the community.
You heard a half an hour ago where the taxpayers of the city of Springfield, in addition to their already high taxes, are being expected to absorb another $5.4million in the coming year. And you can bet your life that’s not going to go away the year after, that we can tell you right now that next year they’ll be expected to absorb that plus some more. And so you have some very, very burdened taxpayers, many of whom are on a fixed income, none of whom will ever really convince themselves or anybody else that they can afford these continuing tax increases.
On the other hand, the control board is negotiating some changes to the health insurance plan in an effort to try and achieve a savings across the board of some $11million; that’s not happily received by anybody who’s going to be adversely effected by that.
And right now, this item that’s before the board to create a program for payment in lieu of taxes: we’re turning to people who have no legal obligation to pay any taxes at all—the hospitals, the colleges, non-profit agencies who by state law are exempt from taxes—and yet we’re saying that “Look at, we do provide certain city benefits, and so we want to create a committee to look at this” and then go out to some of these institutions and they won’t be happy when we knock on their door, because they’re gong to say, “Look at, we’re broke anyway, we’re doing all these wonderful things in health care or in education or in whatever other community service and you’ve got a nerve to come and ask us for some support. Bail it out some other way.” And yet, we feel we’ve got to march ahead, that it has, as Mr. Puccia says, been used in other communities with varying degrees of success. But again, in an effort to get the kind of re-building process as broadly spread as possible, this is a program that, I think that we all feel, will be of significant assistance to us.
Again, it’s not going to solve everything all by itself, but it’s just one of the many avenues that we go down as we try and make this. Then we take the increased efficiencies, and we’ve been doing a lot, we’ll continue to do a lot, we’re talking about the increased tax collections, and there is no comparison between what is happening today, and what was happening a year or two before. We’re far more successful. We’ll continue to be far more successful, so you put these all together and, hopefully, we will have created a strategy that is going to come a long ways towards getting us out of the tremendous fundamental financial mess that we find ourselves in.
DS: Mr. Chairman, Phil, you had already worked in [unintelligible] comparison studies of municipalities in the Commonwealth that do similar things. This more of we’re looking to cajole these institutions to see about sharing the pain or sharing the burden here, but you are in the midst of doing or continuing to comparison studies...
PP: We’re in the midst of doing an analysis. Yes, and it’s also is to your point, the first point, which is that we’ve got to begin the discussion with the folks who we’re going to go to to make these voluntary payments, so I see it as an inclusive process that they’ve become part of and not simply something we just attempt to mandate to them.
AL: Yeah, I mean I view it as: they have a responsibility as good corporate citizens of the city of Springfield to step up to the plate like we’re asking everybody else to step up to the plate and contribute to the solution to the city’s problems. And it’s worked effectively in Boston, and it’s worked effectively in Cambridge, and we’re not focusing, at least I’m not thinking of focusing, on small organizations, but you have some really big not-for-profit organizations in town that get a lot of services from the city, and I think it’s in their interest, you know, to help solve the problems of the city of Springfield, and we hope they’ll come forward and voluntarily help fill the gap that we have, and so I support going forward. Let’s work on this issue.
PP: I guess, for purposes of the board, if you could just delegate to myself and the mayor the opportunity to create some sort of commission or committee to begin the process of creating a payment in lieu of taxes program.
AL: Do I have a motion for that?
**MOTION PASSES unanimously.
Thomas Trimarco Appointed to City Retirement Board
PP: I have one other item on new business, sir, and that is to appoint Mr. Trimarco to the city’s retirement board at the vacancy of Mary Tzambazakis, the city’s chief financial officer. I offer that motion to the board for consideration, and whether Mr. Trimarco would like to say a few remarks on his own, but to lend his expertise in that field to the city’s pension board.
AL: Any questions, comments?
CVR: Well, no, but, again, I’d like to remark that Mr. Trimarco is a man who has spent a long and career in public and private life with a great deal of emphasis in this area of activity. This is another area where countless millions of dollars are being paid into the retirement fund. I think we all know that we have an unfunded problem that is so big that we could clear the room if we gave the figure right now, because it is almost inconceivable that we’ll ever have the resources to deal with it, and so when a gentleman of Mr. Trimarco’ s ability says that he’s ready to take on this additional responsibility, I’m very grateful. I can see nothing but good coming from that, because of the fact that he’s objective, he’s experienced, and I think he will bring a very, very sharp focus to the activities of that very important quasi-municipal board.
DS: Mr. Chairman, I just wanted to indicate that Tom has his tremendous background in these situations here and this is most likely going to be an enhancement in helping out our pension system to move it forward in the 21st century, so we’re looking forward to your expertise, Tom, and reassuring the pension retirees, etc. on that.
TT: Well, I appreciate those nice words, and I did serve as, 8 years as chairman of the state pension board at PRIM, and we revitalized that investment program to the benefit of the participants in the state retirement plan. It’s an important area, most of these funds are seriously underfunded, and the expenses of managing those, and the proper allocation of the assets to maximize returns makes a difference of tens of millions of dollars on a going forward basis, and when you compound that, so it’s a very serious issue, and I really look forward to participating.
AL: Do we have a motion to ...
**MOTION PASSES unanimously.
AL: Welcome...to another job. Any other new business?
Domenic Sarno Leaving Board
CVR: Mr. Chairman, I would like to recognize the fact that this is Domenic Sarno’s last meeting as a member of this board. I think that we were very fortunate as a board that at the time this organization came into being that the president of the city council was Mr. Sarno. He has been a very positive member and has participated so intimately in everything we have tried to do. This is not the easiest job in town; this is a job where, for the most part, we’re making people feel unhappy because of the fact that we have a mandate and also a vision that through this kind of work that, hopefully, ultimately we will be successful. But he’s just done an outstanding job, we’d be remiss if we didn’t recognize those kinds of contributions.
TT: I would like to add that it’s been a real pleasure to have a public servant like you, Domenic, serving on this at this critical time, and I know you’ll still stay involved, but we will miss you.
DS: I will still stay involved. It’s been a pleasure working with you gentlemen, and I appreciate your kind words of the mayor and I know out in the audience. When we first had our first meeting it was quite ironic, people clapped and now at our last, my last, meeting, people are shouting out. And when you care, as this board does and the administration and you out there, things get heated, things get emotional, but when you have to make difficult decisions, and you have to knock on somebody’s door in order to do the best and the good for the city, people are going to be unhappy at that point in time.
But I will continue to work just as hard for the city I love, and I’m sure that Councilor Rooke, the in-coming city council president, will do a find job, and try, if you can during this holiday season, and I wish everybody a happy and healthy holidays out there that, let’s try not to paint the good guys with the white hats and the bad guys with the black hats. Everybody here is trying to work together. There’s going to be disagreements at times, but the goal is to get Springfield back on its feet, and I’ve said it publicly before dealing whether it’s with Jake Jacobson, his honor Mayor Ryan, our chairman Alan LeBovidge, or Tommy Trimarco, they are good individuals. They do care about the city. It’s just at this time of dire financial consequences, we can either sink or we can swim. We make these difficult decisions which will not make everyone happy in this room or outside of this room, but this is all to get Springfield back on its feet. This is to avoid the specter of receivership. And though many times, we all get, and I’ll close with this, that it must drive you crazy juggling everything, I love this city, and everything that we’re doing here at this point in time is to get Springfield back on its feet. So, please if you can be patient, still voice your opinions and your concerns, but the gentlemen here are trying to work in the best possible interests of Springfield. I thank you, and I look forward to getting back on our feet. Happy and healthy holidays. Thank you.
[Applause]
Vote to go into Executive Session
AL: Thank you, Domenic, but you can’t leave yet, because I think we’re finished with our business, but we have an executive session I’d like to have to deal with some more litigation and labor matters, so, would the clerk call the roll to see if we have votes to go into executive session.
**MOTION PASSES unanimously.
Meeting adjourned.