FINANCE CONTROL BOARD MEETING, February 28, 2006

Present:  Chairman Alan LeBovidge, Mayor Charles V. Ryan, City Councilor Jose Tosado, Thomas Gloster, Jake Jacobson, City Clerk Wayman Lee

Chairman LeBovidge:  I’d like to call the February 28^th meeting of the Springfield Finance Control Board to order.  They’ve taken away the gavel, so we don’t have to worry about having a gavel.  I’d like first like to welcome Jose Tosado to this group and look forward to his participation in the meetings.  This morning, the first thing I guess we need...well, I have to make an announcement first that after this meeting, we’ll be going to executive session to discuss labor and litigation matters, and we will not be returning after that meeting.  The second item is to...the approval of the minutes of the last meeting.  Any comments, changes?  Do I have a motion to approve the minutes?

**MINUTES APPROVED UNANIMOUSLY.

OK.  I’m going to turn the meeting over to Phil Puccia to take us through several issues that we’re talking about.  I think the first one is the tax rate.

Phil Puccia:  Yes. Thank you , Mr. Chairman.  I am going to take a few of these out of order just to kind of keep the subjects consistent, and we’ll start with a presentation by Ritchie Allen, assessor, related to the tax rate.

Setting the Tax Rate

City Assessor Richard Allen:  Good morning, Mr. Chairman and distinguished members of the control board.  It’s my pleasure to be here this morning to ask your approval of the residential factor for the FY 2006 property tax rates in the city of Springfield. 

We have a brief [PowerPoint] presentation.  Before I begin that, I would just like to note, particularly, for the Commissioner of Revenue, that we’ve just concluded a process of several weeks working with the Dept. of Revenue, and, once again, I must commend the very professional staff.  They’ve been very responsive, accommodating, and it’s always a pleasure to work with them.  They make a very difficult process one that goes smoothly and timely, and I just wanted to mention that before we begin the presentation. 

            I call your attention to the hand-outs or to the screen.  The topic is the FY 2006 tax rates for the city of Springfield.  First of all, I’d like to discuss the valuations.  This is the first year that Springfield has been subject to the interim year certification requirements.  In Massachusetts, we have a system of triennial certifications: every three years there’s a very extensive, comprehensive process of reviewing and documenting valuation, and we successfully completed that process last year.  This is the first year that we’re subject to the interim year requirements which are a new set of requirements which I think make a lot of sense in the real estate marketplace that we find ourselves in the Commonwealth.

 In any event, the residential value, we’re up about $500,000,000, about $490,000,000 from last year.  The residential share of the value (the second box here [on the screen]), it’s slightly increased over last year, about 1.23%.  The industrial/commercial/ personal property last year was about $1,553,000,000 approximately, this year $1,611,000,000.  And, again, the share of the value for the commercial/industrial and personal declines by the same percentage that the residential increases.

AL:  Could I interrupt one second, Ritchie?

RA:  Of course.

AL:  Is the increase in value due to new growth or appreciation of existing real estate?

RA:  Largely price appreciation in the residential sector.  There is about $30million of new growth value in residential, about $24million in the commercial, about $1.5million in industrial, and $72million in the personal property.

AL:  OK.

Mayor Ryan:  So what’s that total, about $150 odd million?

RA:  Yes.

CVR:  That’s in value, not in, not in...in levy.  Yeah.

RA:  New growth

AL:  I mean, percentage-wise, when was the last time we had that kind of growth?

RA:  Well, I looked at the last 15 years, and this is the second largest single year increase of gross value.

AL:  All right.  That’s good news as far as I’m concerned.

RA:  It’s terrific news.

Thomas Gloster:  Do we have any view as to how Springfield is doing in comparison to the other communities around here?

RA:  I think our experience parallels most other communities.  Our values proportionately are lower, but in terms of the percentage increases, we’re up about 11% in residential and about 4% on commercial/industrial and personal, and that’s pretty typical from around the Commonwealth.

PP:  I’d like to add just a little more color to that.  At least according to USA Today last week, we...the Springfield area had the highest rate of residential growth compared to the three major geographic areas of the state.

AL:  Yeah.  I thought I’d read something...it was in the area of Forbes or Fortune the last edition that also listed Springfield as kind of the top growth in Massachusetts, compared to the eastern part of the state, it was really moving up, which, to me, it was great to see.

RA:  Yeah.  Another statistic I looked at was the average single family valuation, and we had hit the lowest valuation in the last 15 years back in fiscal 1997.  We were at $75,500. This year, we’re at $131,200, average single-family valuation: that’s a 73% increase over that span of time. 

CVR:  Doubled in nine years?

Jose Tosado:  Just a quick question, this allow includes multi-family dwellings....

RA:  Yes, yes.

JT:  ...because I’m trying to wrap my head around the fact that Springfield is a city that’s, that’s in poverty with oftentimes 80% of our children that are in schools live at the poverty level, yet there is the corresponding increase of residential value, so I imagine that a lot of this also multi-family units which are owned by people outside, outside of the city.... 

RA:  We have about 173 sales of apartment buildings four units or greater over calendars 2004 and 2005.  Of those 173 sales, 73% were sold to outside investors, people—I define that as people with a mailing address outside of Springfield.  There’s tremendous interest from eastern Massachusetts capital chasing, chasing investment properties in Springfield and some from metropolitan New York City.

JT:  Which I would see that as mixed news.  I mean it’s great that our, that investing in our tax base in terms of real property, but, unfortunately, there’s also some things, some issues that come with that with out-of-area investors as well.

RA:  There can be issues with management, but I, I think what we’re seeing is a more sophisticated investor, and they’re likely to use more professional management approaches and personnel.  So I understand your concerns, and, in general, I think they’re valid, but I haven’t noticed the types of conditions or deterioration that we saw, say, in the early 90s when we had a similar appreciation, so...

AL:  OK.

RA:  If I may proceed, our levy last year, our levy limit was $131,042,000.  The in--, you can see in the second box there, our levy limit this year is $138,500,000 roughly.  It’s an increase of $7,400,000, about 5.68%.   That includes the 2 1/2% increase plus the new growth.  And new growth is in that bottom box there, $4,160,000. 

AL:  OK. 

RA:  It’s our second-largest new growth number in history.

CVR:  In history?

AL:  In history...modern history, as far back as you can go.

[Laughter]

RA:  As far back as I could document.  If I may proceed to the next screen, here we have a presentation on the rates.  The residential factor that we’re proposing for your adoption this morning is in the middle box there .83619.  That results in a residential rate of $17.00 and a commercial/industrial/personal rate of $33.02.  And I’ve included last year’s rate just as a means of comparison. You can see the residential rate is down $.51, and the commercial rate would be down $.34, so...  If I may, just make an observation:  Typically, other cities of our composition, our diversity, our complexity have a higher shift onto the commercial sector, maybe anywhere from in the neighborhood of 1.7, 1.75, 1.8.  Springfield has a tradition of having a fairly moderate shift, and I think this year’s 1.58 shift is in keeping with that tradition.  Results in levy shares as noted for that.

Jake Jacobson:  What are comparable tax rates in surrounding western Massachusetts communities?

RA:  Well, Holyoke, I believe, now has the highest commercial/industrial/personal rate in, in this region, and may well be in the Commonwealth. I think they’re around $36.00 or $38.00 this year, FY 2006.  The...Chicopee, I think is in the low $30.00s in the commercial rate as well.  A lot of the suburban and more rural communities have the single rates; they chose not to classify.  A place like Northampton would have a single rate, actually.

JJ:  OK.

RA:  So, this screen merely summarizes again what we were discussing a few minutes ago with the appreciation and the new growth.  And I’m just struck at the significance of the increase, so I’ll just proceed.

And, finally, the impact on the average single-family value of this morning’s proposed residential factor would be an increase of approximately $112. on the average single-family tax, which is really a statistic that is somewhat representative of reality, but with the appreciation of varying degrees across all the various neighborhoods, the actual impact can be....We have about 80% of the single-family homes with a higher tax bill this year than they had last year.

AL:  On average $120.

RA:  $112.

AL: $112, OK.  We’re up to the...so we’re taxing at the capacity?

RA:  We’re about $1800. why of our actual levy limit this proposed factor which should is...Springfield, again, has a history of taxing right to the maximum that the law allows.   There’s a...we have very little excess capacity, which is a measure which, I think, really tells the tale about how Springfield property owners shoulder really the maximum that is allowed under the law, whereas some other communities opt not to.

AL:  Right.

RA:  So...we do have override capacity...but (and that’s grown this year with the appreciation), but the excess capacity is miniscule:  if we went up another penny over the rate, we’d be over the [Proposition] 2 ½ limit.

AL:   OK.  While you’re doing this, you want to give me two seconds on, you know, just the assessor’s office and the ability to make sure we’re covering all the valuation, all the properties are accounted for (new properties, existing properties).  What’s your sense on how the process is going?

RA:  All right, what we’ve...over the last few years, we’ve suffered some retirements, some resignations and some lay-offs, and I must commend Phil and the Mayor and Mary T. in recognizing the need that we’ve been facing for the last 18 months or so, and they’ve allowed us to proceed with reviving our cyclical inspection program of which is covering about 7000 houses.  We have Cole Layer Trumble, Tyler Technologies doing that work as we speak.  We have about seven people out in the field today doing cyclical inspection.  Our personal property vendor, RRC out of Danvers, Mass., we’ve been talking with them recently about beginning the annual personal property project.  I should note that we had not done a full canvas of the personal property accounts in about five years.  And we did one for this year, and it was successful.  It was...

AL:  What do you mean by “successful”?

RA:  Successful in discovering accounts that we did not previously have on the rolls and also identifying accounts that had closed, so...but it was well worth the...

AL:  This was for commercial?

RA:  Yes.  This was for the personal property accounts.

AL:  OK, now...

PP:  So, actually, if the board would approve Executive Order, in your package, 22801, it will set the residential factor at .813619.  It should be the second or third page in, Mr. Gloster.  And the actual tax rates should be representative of what Mr. Allen has presented to you.

AL:  Do I have a motion to approve this executive order?

**MOTION PASSES UNANIMOUSLY

AL:  OK.  Thank you.

Study of the Assessor’s Office

PP:  Mr. Chairman, I would like to ask Mr. Richard Brady of Matrix Consulting to come and give the board an overview of its view of the assessing department.  Mr. Brady?  There should be a hand-out in your package already.

Richard Brady:  You should have the executive summary to our report in your packet which is a summary of what we’re doing, what we did

PP:  Mr. Brady, if you might give just a little background for the moment brief, I think the board hasn’t heard from you in some time, just a little bit about you and your firm before we get started.

RB:  OK, well, thank you very much for having us here this morning.  I’m Richard Brady.  I’m the president of Matrix Consulting Group, and I was the project manager on this assignment plus we’re doing some other work for you relating to some of the other financial functions (the treasurer collector and the purchasing departments) which we’ll be reporting to you on in about a month or so here.  I’ve brought with me one of our staff persons, one of the persons who took the lead in working with us on the assessor’s study, Susannah Lee.  We have an office in Waltham, but we’re also a national firm.  We’ve got five offices across the country.  We just work for local government and doing organization management, staffing and operations studies of every local government function.

            We conducted this study for you over a couple of month period.  This falls within a lot of independent studies that you’ve had done, performed for the city, looking at whether you’re performing the right services, whether you’re performing the right services well, whether they’re well-organized and managed.  Our job in this was to review the operations within the assessor’s department, compare them to best practices and to other cities within the Commonwealth, and to make recommendations to improve the organization, management and staffing within the department. 

As I mentioned, it was a two month study, mostly conducted in the fall of last year.  Some of the things that we did to conduct the study: we interviewed all staff, most particularly, the lead people and the management staff on multiple occasions.  We interviewed staff in other financial functions within the city (certainly within the treasurer-collector’s office, the finance director for the city, other staff within the city to get an understanding of how it fell within all the financial functions within the city), looked at the data in terms of assessing other kinds of workloads that perform within the department  (the inspectional workload,  the clerical responsibilities, the customer services side of things, etc.)  We mapped all the processes that they perform.  We compared you to about five or six other cities, not just within Massachusetts, but elsewhere in New England, compared you to best management practices within the assessors field of business, made some analysis and recommendations.

Things the Assessor’s Office Does Well

Before I talk about what our recommendations were, I think it’s always good to talk about the things that a department that we study are doing well, and there are a number of things that they do well.  It’s important to note that many of the things that we recognize are positive things within the department are things which have occurred within the last couple of years.  One is that tax administration is a small percentage of collections, and there are actually standards out there, and you’re below those standards for the administration of taxes.  They’re recently starting a process of establishing performance measures.  They’re using gis (graphic information systems) which are linked to other financial systems within the office.  They’ve got a low appeals percentage.  They coordinate with other functions within the city on items that have an impact on assessing, such as building inspection.  They’re starting to track business income (sales, expenditures) so that they’re able to keep a better tally on what tax rates and taxes should be.  They’re using computer-assisted mass appraisal programs to help this process.  And they’ve recently developed a website to push down some information out to the public a little bit better.  So those are good.

Areas for Improvement

There are many issues.  I think that some of these positives hide some issues within the organization, so even though they’re positives, they were some leads to us on some things that they could do better.  For example, the tax administration percentage shows that most of them are “worker bees,” and I think it hides an issue that while they’re doing some things very well they’re processing information and tax bills things like that rather well, that the management of the process is a significant issue within the office.  I think putting the issues and the recommendations within some sort of context, I think the assessor’s office has over a long period of time, had a, some quite significant reductions in staffing, and I think most of that was a good thing, because I think for years and years, they were over-staffed. 

But the most recent staff reductions over the last couple of years have actually impacted their ability to process things to rather significantly.  It’s had some good impact in that it’s forced them to look at whether they should be doing some things in-house or doing things...sending things out to the private sector, and the things that you’ve out-sourced are things that you should have out-sourced, but other things have impacted their ability to process information,(tax bills, get the inspections done and things like that).  And I think that when that falls within a context of lack of management systems, lack of staff training, lack of cross-training, some lacking in automation, it’s made some things actually worse.

In inspections, we’re actually recommending that you fill two of the vacant positions that you have there.  And you’re not meeting some state requirements for inspecting in a nine-year cycle.  You’re currently doing it in about an eleven-year cycle. You can out-source some of those things and have done that, but you really should fill two of the vacant positions within the department at a cost of about $98,000 a year.  But you shouldn’t just add staff, there’s some management of those staff that should take place.  Once you have a full complement of staffing, one of them should do a better job taking the lead for tracking work, developing performance measures for that.  They need some technology to do that a little bit better.  They should have laptops that allow them to record, up-date, edit information, plus do some of the drawings in the field, download some of those things once they’re in the office, and that will improve their productivity.

 In the real estate division, there are some big efficiency issues that they need to address, but they should add about a half a staff person to help relieve some of the work load there at a cost of about $24,000.  In personal property, while staffing is adequate, staff should be cross-trained so that they can handle the workload better there.  You should create an office manager position, not to just manage the clerical staff, because I think one of the impacts that you’ve had in reducing staff is it’s incredibly decentralized right now. Particularly in the administrative functions, we’ve got just a series of people

reporting to the assessor, and there’s nobody really pulling the customer services side together, and the whole administrative support for the department and is really nobody to process some of the workload tracking and workload reporting issues that we’ve identified in this.  So adding an office manager would do that, would be able to address some of the customer services issues there as well.

            In a more general level, training of staff, both in terms of the, their accreditation , their credentials, when they come to work for the assessor’s office, plus annual training, really needs to be addressed.  There are some programs out there at every level for staff within an assessor’s department which you should implement so that all staff should be credentialed or provided with customer services training, and we’ve got a plan in the study to address that.

            There are some classification and compensation issues. Most of the employee classifications are rather old and out-dated and don’t really address the staff roles and responsibilities as they are currently in place. There are some compensation issues which you should address.  The managers that are paid roughly within line with what the market is, but the line staff are anywhere from 5% [?] and 15 % below the market in terms of compensation, so we should look at that.

            I think one of our most significant recommendations in this report is: you’ve got a basic problem in the distinction between the oversight of the function and the performance of the function. You have the same people who are determining value reviewing value, coming up with evaluation method, as well as approving all of that and making adjustments for all of that.  You should separate out the oversight from the staff roles.  So we’re recommending that you create a true oversight board of three assessors on a board, to do the reviews of staff determination of value and the method and the appeals associated with that.  And then return staff to doing the processing of the workload, which will have an impact on the number of staff you need to be able to do that, so you need to have three independent assessors.  Once you do that, you only need one of the two top assessors that you’ve got right now, because of the separation.  And that will provide the opportunity to save $90,000, but, more importantly, will provide a separation of the oversight from the staff roles here. 

So that, in a nutshell, are our recommendations.  What we’re really recommending here is a change in the roles of staff and the type of staff that you have, pushing more work down into the organization.  And there are the staff increases that we’ve recommended, and fewer top level, one fewer at the top level staff person, but a lot of management changes in the way performance is targeted, is measured and tracked in the assessor’s department.

AL:  Based on what you’ve seen, have we been losing revenue because of this or, you know, there’s costs, and it sounds like you’ve given us a road map for an ideal assessor’s office, but what’s it cost us or, you know, what’s the financial impact on the city...if any?

RB:  Certainly, there are financial impacts of letting these backlogs grow in terms of keeping up with escalation in value, so that certainly is an issue that needs to be addressed, not one that I can quantify right here.

TG:  That’s the nine year vs. the eleven-year cycle you’re talking about?  So if we went to the nine-year cycle, presumably...

RB: Well, that’s a Commonwealth requirement, so you’re not meeting that requirement.

TG:  OK  So we should be doing that.

RB:  Yes, you definitely should be doing that.

PP: I think it would be fair to say that, Mr. Chairman, that we have definitely over the I-don’t-know-how-many years back or what the percentages is yet, but clearly, the sense I think that we have and that we share with the folks with the Dept. of Local Services is that: yeah, there’s money that we’ve missed.  And this is a place that we need to make investments make sure they’re the right kinds of investments, but I think it’ll have, certainly, a pay-back for the city.

RB:  That’s right.

AL:  Any other questions or...?  OK.  Well, thanks.  One second, Mayor?

CVR:  Well, I take it that the Matrix report is going to be released for the public?

PP:  Yeah.  I think we’re going to have it posted on the web today, the entire thing, not just the...[turns to his assistant David Panagore] Is that correct?

TG:  Phil, there’s a change I want to suggest to you later I think.  Just a typo, I think.

PP:  OK Thank you.

TG:  It would be embarrassing.

AL:  OK, Mr. Brady, thank you very much.

Hiring Christine Saulnier as a Consultant to the Assessors Office

PP:  I would like to...Mary, is this you or David who’s going to talk about Ms. Saulnier please?  Based...Mary, come and have a seat.  Based on what we’ve know about this report in advance of today, Mr. Panagore and Ms. Tzambazakis would like to make a recommendation to the board on how we immediately start to address the management issues and operational issues in the department.

AL:  Hi Mary. Hi David.

DP:  Good morning.

AL:  OK.

Mary Tzambazakis:  One of the...I have read the report in detail over the last few weeks.  We need to make some dramatic changes and move that department forward to be more effective and efficient. 

One of the things that I have done with David’s help and with Philip’s help is we’ve identified an expert in assessing.  The person’s name is Christine Saulnier.  She has been an assessor for approximately thirty years, is retired, is certified through the Dept. of Revenue, is certified through the Mass. Assessors’ Association, was a former president of the Mass. Assessors’ Association, and has actually written legislation that has passed in assessing in the Commonwealth.  She’s an outstanding individual. 

And what we’ve done is, we’d like to contract...we’ve already contracted with her on the short term...we’d would like to enter into long-term contract with an option to renew for her professional services.  To date, I have her working on a couple of items:  One is that we’ve developed certain job descriptions and positions within the assessor’s department and have posted those positions, the field inspection positions or assistant assessor positions.  We’ve promoted one of the assistant assessors to oversee and manage that process.  We’ve posted for a third assessor to make the board whole, and that assessor, in my opinion, would work as the operations person running the day-to-day operations in the office and the staff.  We’ve also identified two support positions in the office as well that we’re posting.

This woman, Christine, will be responsible for helping us identify a third assessor.  She’s helped me draft job description for the third assessor and as...to advertise for positions, and she will be assisting me in identifying individuals for the assessor’s position and supporting us in the assessment process for the third assessor and the hiring process.

DP:  And she is not, as well, a candidate for that office.

MT:  She is not.  The second thing that I had her, I will have her do is she’s going to be developing a training plan for each position in the department to identify the appropriate level and training required by every individual in the department so that we are sure that everybody is trained in certified appropriately within the department.  She’s also going to be helping us in reviewing all our operations from new growth to Appellate Tax Court cases to every piece of it to streamlining and documenting process and procedures in changing everything that we do in the department and also helping us to automate the department to the fullest extent possible.  My recommendation is that, based on her credentials and her skills—she’s an outstanding individual and I’m extremely impressed—that she will help us really jump-start and really propel that department into the 21^st century and secure the necessary process, procedure, staffing, whatever we need to do to get it to be a state-of-the-art assessor’s office.

AL:  And how much is this...how much is she going to be getting for this?

DP:  It’s...her hourly rate is $180.00 an hour for a maximum contract for $68,500.

MT:  Correction, $80.00 an hour, $80.00 an hour which I think is reasonable given the amount of work she’s going to be doing.  It’s not an exaggerated amount for a contractual hourly rate.

DP:  Nor for this period in time.

MT:  Yes.

DP:  In pursuant to Chapter 169, Section 9B, the control board, if it makes a series of findings, is authorized to do what is, what they call in the legislation a “no bid” contract.  Through Mary, myself, we went out searching for likely candidates for individuals and found Chris.  We spoke with many people, and Chris was the one who both by comment of her colleagues and by interview was the best candidate. 

In that regard, 169, as I mentioned, allows--if you proceed three items down in your packet, you’ll see control board letterhead, Exhibit 1—you’ll see on the first page four items and numbered and under 169, as I mentioned, contracts may be awarded by the control board if a letter is sent to the Senate and House Ways and Means Committees five days before the award of the contract notifying them of the fact of terms, conditions, the identity of the contractor and a finding by the board that not using a competitive bidding process under the circumstances was necessary for the provision of essential city services.  Again, as we’ve already seen from the discussion regarding the assessor’s report, how critical and important the assessing department’s functions are for the city revenues.  And fourth, a certification that the board, by the board, that it engaged in arm’s length negotiations with the contractor and the terms of the contract represent the best possible arrangement for the city under the circumstances.           You’ve heard from the city CFO, Mary T., in that regard.

CVR:  And this is a process that’s mandated by the statute?

DP:  Mandated by the statute, a little complex, but appropriate that it provides all public notice.  In that regard then, you have a proposed executive order 22802 that recounts all of these matters and recounts in detail the terms of the contract and requests that the executive director file the, the necessary report with the House Ways and Means Committee in the form of the letter provided to you and then thereafter proceed to execute a contract with Ms. Christine Saulnier five days after submission of the report to House Ways and Means.

AL:  May...I have no..

.

DP:  One waits five day’s after the submission of the report to Ways and Means before a contract...

AL:  It’s a technical issue, mine is: should Phil Puccia be signing this or should I be signing it for the board?  Is it a board action or is it a Phil action?  All right, so...OK....

TG:  So we can’t technically approve the award now, can we.

DP:  You could.  The board...the authorization is written that you’ve reviewed it, and that the authorization is given that five days after the letter is submitted a contract may be awarded, so the delega—so it’s a series of steps in the delegation, it’s not a direct delegation.

TG:  And the actual awarding of the contract will be when....dated when... the director executes the contract, the date of the award...

AL:  ...dated after...

DP:  ...dated five days after...

TG:  ...when the director executes the contract, that would be the date of the award.

DP:  It would be.  It is notice only.

AL:  And they don’t have to respond, it’s just we inform them and want to respond....OK

JT:  And the reason for going for a sole source contract as opposed to going to a bidding process is an issue of timing or is it is it to get moving on implementation of some of these recommendations as soon as possible is that the issue or...?

DP:  If I were to...and I look to you, Mary, for your comments...It’s both an issue of timing, given the fact that we’re headed into the abatement season which is a very heavy load, a very heavy workload period for the board of assessors, and the time it takes to go through the procurement, but more so because of the due diligence we’ve already done.  Professional assessors in Massachusetts there are very few and very few with time on their hands.  We have, we generated a list, by working with the Dept. of Revenue and other folks who knew who’d been on board of assessors in the region and identified a short list, worked our way through that short list and selected Christine.  We were originally...we were looking for people who could come in and help volunteer and be on the board, and in lieu of that, we have Christine under contract.

AL:  If we went out for bid instead, how long would it take to get this done?

DP:  It depends on the process, but in the best of all possible worlds, between the time to go to bid and the time to get the contract?  You could be talking eight weeks, two months, which places us in the middle of the abatement season.

MT:  I would say probably more likely two to three months.  We’ve had a lot of difficulty finding people that are experts and skilled.  I mean the key is you want to hire someone who knows what they’re doing, and, you know, for me quite honestly, I have been trying to find a third assessor and advertising.  We have no real applicants with any certifications that have applied. 

So the issue is finding someone who is certified as an assessor in the Commonwealth, certified under the Mass. Assessors’ Association on top of it, who’s actually written legislation on assessing that’s been passed the House and the Senate and has been approved by the governor, who’s got 30 years of experience, who’s [got] an outstanding reputation....  I mean the Dept. of Revenue uses her when they know a community’s in trouble and recommends her.  So, to me, to get that caliber in the city of Springfield to help the Number One, and in my opinion, the most important department in the city, because it’s the only revenue generating department, we have to take those extraordinary steps.

JT:  No.  Obviously, she is very qualified from the credentials that, that, that you’ve articulated, and  I was just questioning the fact, I suppose, as to why go one way vs. another more open and competitive.  I certainly understand your rationale.  Now is she a, is she a local person who’d worked...?

MT:  She’s from East Longmeadow.

DP:  Has\d been an assessor in Montague for part of her career.

CVR:  And East Longmeadow.

DP:  That is correct.

MT:  And I’ll be honest with you gentlemen.  You just heard the Matrix report.  I have been in that department for the last few months a minimum of two days a week on and off.  I’ve spent a significant amount of time in assessors, and they have some critical needs there.  That department was gutted over the last several years, and it’s very important that we capture as much new growth as possible, we make sure the Appellate Tax Board cases and the abatements happen effectively and efficiently, and we’ve been challenged, so I would recommend this.

AL:  OK Any other questions?

TG:  Mr. Panagore, I had a question about the way we define the initial term.  Can we deal with this after the meeting and make technical changes to the agreement?

DP:  Yes.

AL:  OK Is there a motion that we...

CVR:  Phil, did you want to say something?

PP:  No, sir.

CVR:  Do you want to walk us through this, David, as to which motions you want first, or does it make any difference? 

DP:  It’s written by the city law department so if voted on 22802 that it’s one motion.

CVR:  I’ll move that.

AL:  OK

**MOTION PASSES UNANIMOUSLY

AL:  And I will then send a letter out when I get back to my office.

PP:  Thank you, sir.

CVR:  Do we need a vote to approve the agreement for consulting services?

PP:  I believe it’s all contained in the 22802 order.

CVR:  In the executive order.

AL:  Here’s the compensation for consulting services.

CVR:  All right.

AL:  OK.

Fiscal Policies and Procedures Manual

PP:    OK.  If I could have Ms. Eichwald, please.  Ladies and Gentlemen, I...no ladies...

JJ: And you looked at me when you said that, didn’t you?

[Laughter]

AL:  It’s the [Mardi Gras] beads [worn by JJ] threw him off. 

PP:  I’d like to introduce to you Eve Eichwald.  Some of you have met her, I know the Mayor has.  She’s recently joined the city of Springfield as its budget director from the city of San Francisco, I think in December...

Eve Eichwald:  October.

PP: October, and she is going to tell us today about some fiscal policies and procedures.

One might normally assume that these were already in place and to find...kind of financial and managerial operations in the city.  I think they were probably in existence in some places here and there, but one of Ms. Eichwald’s recommendations was to codify and clarify and put them together.  She is going to give us a brief overview of the document, and so we would just like the board’s concurrence for the implementation of the, those policies and procedures.

EE:  Given the length and complexity of your agenda today, I’m going to sort of go through quickly, but if there’s any...if I’m [unintelligible] too high, just top me and I’ll don’t want to sort of slog through administrative...you know, things that you don’t want to delve too much into.

            Two of the agenda items today are coming out of our office.  It’s both the fiscal policy and procedures and the ordinance to create a capital improvement plan committee, so I’m going to go through both of those.  And rather than just sort of throw these items at you, I wanted to give you a brief context of where they are in the work streams that come out of my office.  We’re responsible for the operating budget, and we created a function of operating budget control.

One of those controls that I felt I was very critical is written policy and procedures, therefore it’s an agenda item that you have in front of you today.  And one of the other things I thought was critical was the monthly control process we follow and accountability that has been started and has been already very successful.

[PowerPoint screen is activated.]

Operating budget preparation has begun.  We have a much earlier budget calendar, a few new budget processes this year, building on the good work that happened last year.  Capital planning and budgeting, and another agenda item that you have before you today: to create the committee that’s going to kick off that process that therefore creates a public capital plan, as required by Massachusetts General Law and is really just a best practice and a necessity, that then ties into the operating budget your debt service occurs or other expenses related to financing.  We have a series of special projects, something that I felt strongly about, and also grants management.

So getting to the specific agenda item, Fiscal Policies and Procedures:  It’s...sort of struck me, coming to Springfield that things were very paper processed.  We were the first group to ask for an “intraweb” and to put our things on the intraweb.  These are electronic documents.  You go to them.  They’re hyperlinked.  They can be updated easily.  This is a repository for ease and use and efficiency and expediency.  It’s another best practice, and we hope that other departments will begin using it a lot.  They already have.  It’s a good resource document; it’s hyperlinked to a lot of other things.

The intent...it’s a regurgitation of Massachusetts General Law which is very detailed, but the intent was to have something out there that clearly defined roles and responsibilities and expectations of city staff and management related to appropriate use of finances. Anything from, you know, functional things that are in Massachusetts General Law or Section 169, Chapter 169 to more gray area things.  So there are things that are just every jurisdiction in Massachusetts does, but there are a few things in there that really are sort of explicit statements [no audio] if it’s not explicitly dedicated to a purpose that goes into the general fund things like that, operating budget how we’re doing that, the capital budget that occur.  It defines what a capital project or what a capital expense is to Springfield because it can vary, debt management, best practices, (Don’t get into too much debt, you have a limit, let’s stick with it, be very disciplined.)  Procurement is very documented in Massachusetts General Law.  The one at the bottom is an example of how organic this document is.  It’s something that you didn’t see and since been put into the document which has to do with when people go on worker’s comp, their salary can’t remain at the department, because it’s being paid elsewhere, and it was double-booked.  We noticed that, we put in fiscal polices and procedures so it doesn’t happen any more.  It was as large expense that is now avoided.

And, if you don’t have any questions, on the, the actual document itself....

AL:  No, I mean it sounds like best practices an organization should have policies and procedure manuals so that if somebody gets hit by a truck, the new person knows what’s going on and how to operate.  OK so let me makes sense to me to have it, so why don’t you....unless somebody else has a question....

JT:  Just a quick question on the internet itself where these documents are located.  Are there levels of access for the internet?

EE:  It’s actually the intraweb, so the it’s available to employees that are with, on the city server basically, it’s not...  And there is no reason why it couldn’t be a public document, it’s public information, but this is a tool to share documents between city employees

PP:  Well, I think the question, if I read it correctly, is there a difference between the department heads’ access to budgetary information vs. a staff person within that same office.  Is that your question, councilor?

EE:  Yeah.  for this particular document and on the interweb, no.  Anybody could go on there and...so there shouldn’t be anything on there that is sensitive, and there’s not now, and this is not.

JJ:  The actual budgetary information isn’t included with this.  It’s just the procedures for putting the budget together.

?JT:  Policies and procedures in a manual.

AL:  OK

Capital Planning Committee

PP:  We don’t necessarily need a vote on that, sir, but we would like to discuss the [?orders] related to the capital committee.  I think one of the things that this board is acutely aware is the continued and prolonged lack of capital investment in the city’s infrastructure and what it has done, not only to the quality of life in the school, it in City Hall and its technology and a whole host of other things.  It’s really had a dramatically negative effect and driven up costs for us, both from an operations standpoint and the investments that we need to make from a capital perspective.  What we have tried to do with this document is to codify and clarify the procedures and the processes to make decisions on capital projects.

            And I’m going to have Eve walk through the specifics of it, but I think you’ll see its a clear policy, it’s open to the public, and there’s less ability to just put things in on an as-needed basis that is not part of the plan.  So, Ms. Eichwald?

EE:  This ordinance codifies a committee that is responsible for creating, at minimum a bi-year capital plan, and, at best, a ten-year capital plan or further.  This is clear and pervasive best practice in local jurisdictions, and it’s also very much based on documents that come out of the Dept. of Local Services. It’s very straightforward.  And what is important for the city of Springfield is to have a cohesive coordination of capital planning so that prioritization happens correctly by the correct people who are policy makers and that it’s therefore financed in the most strategic and thoughtful way and that it ties in well to the operating budget and also that it’s a very public, transparent process and that it has some sort of cohesion and planning.  And this ordinance puts that in place, puts that committee in place and drives that public plan, then drives the projects and drives your financing.

PP:  OK Who are the members of the committee?

EE:  The chief financial officer, the director of public works (or their designee), the director of parks and facilities (or their designee), the budget director (or his or her designee) and the superintendent of schools, and the director of planning.

AL:  I just want to understand in context.  This is a group that is charged with coming up with a plan over a long term horizon as to what the priorities are for capital.  Who does this group report to?  I mean what happens when they come up with a recommendation, you know, they don’t just run off and do it, right?

PP:  I mean, clearly, the plan would have to...in this case the plan would have to be adopted by the control board, and when the control board isn’t here, the plan would be adopted by the city council.  And part of the plan is finding the money to pay for it, so we can put together needs assessment—let’s say it’s $100,000,000 (and, clearly, we all know that the needs assent for the city over the next five years is well in excess of $100,000,000), but we’re going to prioritize that list based on what we can hope to afford.

AL:  OK but you’re not going around the legislative process, you know, the elected officials of the...

CVR: If you look at Paragraph D, what it really indicates is that the committee “sets the table” for the elected officials, the mayor and the city council.  They help with regard to indicating priorities, how you finance it, etc., but ultimately, the action has to be taken by the mayor and the council.

PP:   It’s, it’s, it’s to provide the elected officials...it does two provide the elected officials with most information from a professional management standpoint that you can, but it also says to the public at large, “Here’s the best thinking” and provides less “wiggle room” for the elected officials to change what are probably the most critical needs...in favor of things that might not be as critical to the city.

AL:  OK, but as long as there’s an accountability to elected officials.

PP:  Yes there is, and it’s designed that way, sir.

AL:  OK. any other questions?

CVR:  I think you’re looking for a motion to amend this ordinance, isn’t that right?

PP:  That’s correct. 

CVR:  It’s to repeal, to repeal the existing ordinance and replace it with this new ordinance.  That right, David?

DP:  Yes, I would think...Wayman, you probably know best.

Wayman Lee:  Yes, this a...will repeal a current ordinance and puts in more controls in repeal what we currently have on the books, and sets up a new framework for doing capital improvements.

AL:  OK

PP:  So do we need two votes, Mr. Clerk, or just one?

WL:  We just need one vote.

DP:  One vote today, then there will publication and you’ll have to come back for a second

AL:  Next time we meet.  OK.  Fine.  So moved?  Anybody...we have a motion to...?

CVR:  So moved.

AL: Second?

**MOTION PASSES UNANIMOUSLY.

AL:  OK.  We’ll have to deal with this again next time.

Brownfields Tax Agreement

PP:  That’s correct.  Hopefully, it will be perfunctory at that time.  I’d like to call Mr. Panagore, please, for the approval of a brownfield tax agreement.  We beg the board’s indulgence with moving as quickly as we can through...

AL:  That’s fine.

DP: Good morning Mr. Chairman, board members.  You have in your packet a memo to Mayor Ryan from Attorney Robert Warren of the Law Department copied to me regarding brownfield tax abatement agreement.  This relates to a city ordinance that authorizes under state law cities and towns to waive interest and fees and penalties on projects where there is a brownfield reclamation underway.  In this instance, the example will show the rule.  In this instance, there’s about a 5.5 acre site towards the ...along the Connecticut River towards the North End of Springfield it is 95 to 131 Fisk Avenue.  The projected owners which is the UConn Group which has bought and the community as the Holyoke Card and Paper Facility and is investing $208,000 in the property in remediation efforts: that’s $138,000 directly on the property and $68,000 on an adjacent property.  And in return for this investment as allowed under law the benefit to the city will be collecting $251,479 in outstanding tax payments overdue on the property.  (This property had a tax lien that was overdue.)  And, over a five to seven year period, this property’s estimated to generate at least a 90 jobs.  And, in return for this, the city here proposing and has been approved by the treasurer collector and the board of assessors abating $62,476.49 of interest and penalties dating back to FY ’02,’03 and ’05.  As per the city ordinance, there is a review procedure for the city council, in this instance, in order to provide surety to the agreement with the applicant, the request is made that the Springfield Finance Control Board review and approve this acting under its authority under Chapter 169.  And, if the board has any further questions, I’m more than glad to answer them.

JJ:   This summary consistent with the material that was distributed earlier, the more voluminous material?

DP:  Yes, it is, the agreement itself.

AL:  OK

DP:  And the request, therefore, would be for the...to approve the agreement and to authorize the chairman, Chairman LeBovidge, to execute...to countersign and execute the tax agreement.

AL:  Any questions, comments?  Sounds like a step in the right direction to get the property back on the...

**MOTION PASSES UNANIMOUSLY.

AL:   Let’s do it.  OK

Mayor’s Authority to Execute Certain Contracts

DP:  Mr. Chairman, board members, you have in your packet two further executive orders numbered 22803 and 22804.  They both related to clarifications in the mayor’s authority to execute certain contracts for the city.  The first, 22803, relates to federal funding, and predominantly, our federal funding comes through the CDBG program and other social service programs, but as well, we have a variety of federal funding even to highway money.   The request has been made of the...of staff by HUD (Housing and Urban Development) that the board clarify to make for them, for their purposes that the mayor has authority, as mayors commonly do in all cities, to accept grants and to obtain grants on behalf of the city.  So the request is for the mayor to have the authority to take all steps necessary to obtain and secure federal funding for Springfield projects and activities and to include all related powers and duties necessary to achieve that.

AL:  Anybody have a question about this?  Have a motion to accept? 

*MOTION PASSES UNANIMOUSLY

AL:  [To CVR]  You got it; get more money.

TG:  Absolutely.

DP:  22804 is a clarification. Previously, it was within the first few months of the control board’s existence, the Mayor was granted the authority to sell or lease or otherwise transfer the tax title properties in the city.  A question has arisen because the minutes of the meeting, although the discussion at the meeting was that the power was to sell these properties was to delegated to the Mayor from the control board, the language used was merely “execute” the documents.  And so the question has arisen as to the scope of the Mayor’s authority.  So the request is a clarifying motion by the board to delegate its authority to dispose of property to the Mayor for tax title properties.

AL:  Who raised the question?

DP:  It was raised both by a transferee and by staff.

AL:  Any questions?

**MOTION PASSES UNANIMOUSLY.

AL:  OK Thank you.  Let me ask.  Is there any new business?  Any member of the board have any new business the want to bring up?

Pay Cut for City Councilors

PP:  Yeah. We do have one item, sir.

JT:  You can ignore it.

PP:  [Laughs]

AL:  What’s that?

JJ:  How could you ignore it?

PP:  Councilor, do you want to address this or...?

JT:  Sure.  The City Council voted unanimously, and I’ll make no editorial comments, voted to request the control board implement a reduction in salary of the City Council to approximate 10%.  We had thought another 10%, but I was corrected by the Commissioner of Revenue that the numbers actually don’t jibe up to 10%, so some semblance of 10%

PP:  Well, I guess we need a...

AL:  Well, whatever 10% turns out to be.

PP:  Motion from the control board to instruct the executive director to implement that change.

AL:  Effective?

PP:  Effective immediately.

**MOTION PASSES UNANIMOUSLY.

**Board VOTES UNANIMOUSLY to go into executive session to discuss litigation and collective bargaining matters.