FINANCE CONTROL BOARD MEETING, June 29, 2005
Present: Chairman Alan LeBovidge, Mayor Charles Ryan, City Council President Tim Rooke, Jake Jacobson, City Clerk Bill Metzger, (Arriving late: Tom Trimarco)
Overview of the FY 06 City Budget
Control Board Executive Director Phil Puccia: [in progress]...overview of the fiscal 06 budget, and if you’ll so indulge me, I’m going to get up to stand up and operate a PowerPoint presentation, but the board received our 06 budget which is the culmination of a significant amount of work by a number of people to take a step forward, a better step forward, in managing the city’s fiscal affairs. (Adjusting his lapel microphone) If you’ll bear with me one moment...
This morning, I’m going to run through this agenda briefly. I’m going to give you an overview of what happened in 05, talk about some of the significant changes in 06, give you a picture of our revenues, some overview of the expenditures on both the city side of government and Dr. Burke, the superintendent of schools, will give a brief presentation on the school budget, and then, lastly, we will talk about some of the significant risk factors that the city faces.
As you may recall, when we adopted the 9/12 budget back in September, we had a projected deficit of approximately $37million. There’s a few bullet points [on the PowerPoint screen] talking about some of the actions that the board has taken over the course of the past ten months, including various changes in the health plan, implementation of various spending controls from a hiring freeze and a host of other items to our significant efforts to increase tax collection and the continuation of a previously imposed wage freeze.
At this time, we’re projecting that our deficit for the end of Fiscal Year 05 will be approximately $21million. I will report to the board at our next meeting on what that final number will be, whether it’s $21 and a half or $21, whatever it might be, but it’s approximately $21million.
What’s different about this budget that we’re presenting to you today from past budgets? And there’s a few elements I’d like to talk about.
1) This is a performance-based budget. Previously, the document that the public was given or the city council was given was an amalgamation of various line items that didn’t necessarily tell the public what it was getting for its dollar, what goals were to be achieved, how the money was to be spent on personnel or services. This is a first step in a multi-year process to identify and benchmark those services. There’s a...one of our weaknesses, as you may have heard me talk about before is information systems, so we still have some work to go to identify all of those benchmarks and how we capture them, but this is certainly a step in the right direction
2) For the first time, we’ve incorporated our revenues into the budget as part of our presentation to the public. And, as I move forward in our presentation, you’ll actually see an explanation of revenues and expenditures on a macro-level.
3) We have also incorporated grant funding into the budget. What is that? The city receives various sources of revenue from federal grants, but we have not always captured a true picture of how that money is spent, particularly as to how it relates to personnel, and that we have incorporated into the individual department budgets. So, it’s not just an expenditure of city and state funds, but how federal funds are allocated as well. But, we need to tell the folks that, because it has a direct correlation on our long-term pension costs, because these are city employees and are health insurance costs as well.
4) These budgets, a secondary point to what I just mentioned, truly incorporate in our belief, all revenues and expenses, so we know what health insurance costs are, we know what worker’s comp costs are, and all the different sources of revenue and expenses by department. We still have a way to go to identify it to the kind of fine detail we would like, but we believe we’ve made progress.
5) Most importantly, we believe that through this process itself and the document, we really are disclosing to the citizens of Springfield and the state, both of which have a significant portion of paying the freight here, what the true costs of government operations are.
6) Significant change for the fiscal 06 budget are the full realization of the various health care changes that we have made, from the change of administrators to Section 18 that the board approved to the changes to the plan design itself.
Revenue Sources
As I continue to move forward, this [PowerPoint illustration] is a summary of our revenue budget for next year, $452,774,000. It breaks it out for sources of revenue that we get. You’ll see them under school construction, local receipts, property taxes and the like. And, if you see that small piece of the pie chart called the “Springfield Trust Fund,” that is really the difference in revenues and expenses that needs to be bridged by the revolving loan fund at the end of fiscal 06.
Alan LeBovidge: So the local receipts is what the citizens pay in real estate taxes and any other fees?
PP: Yeah. Yes, there’s two components: there’s the property taxes...
AL: [unintelligible]
Expenditures
PP: Now here is a (sic) overview of the expenditure portion of the budget. As you can see, the biggest portion of this pie is related to the education of children in the school system, and Dr. Burke will give us a more detailed explanation in a few moments. But this is an accurate description of where the city tax dollars are spent from public safety, which represents 11% of the budget, to general government, parks and recreation and the like. Now, obviously, your document in front of you of several hundred pages has far greater detail, but I thought I would take a moment to give you an overview in larger terms.
Revenue Specifics
If I could just take a minute to show you some of the specific components of the budget.... We’ve talked about the difference in revenues, and, as you can see, when the board first met back in September, we made a decision to accurately reflect what our real tax collection was, and we budgeted at 95%. But, based on the work of the Mayor and the collector-treasurer and the like, we’ve improved that collection rate, and feel very comfortable in budgeting now at 97%. That’s not perfect, but we expect to increase that number again next year, maybe even report back to you in the middle of the fiscal year at a half a point or possibly another point. And you can see the difference in revenue, and I will give you a more detailed explanation...
(To Mary Tzambazakis) Can I have my sheet over there, Mary, for one moment? Yes, thank you very much.
A couple of items that I’d like to give the board additional explanation is the increased cherry sheet money and Chapter 70 under state aid which we’ll see that the difference between 273 to 285, and, as we continue to move down the columns, you will see an increase in operating expenses from $102million to almost $118million. The principal components of those expenses are as follows: an increase in net school spending of approximately $8.2million, an increase in our busing expenditures for the next fiscal year of approximately $1million, which, while it’s an increase, it’s a significantly reduced increase from previous years based on our redesign of the bid. Other additional state assessments of $1million, fixed cost increases of approximately $2.4million, and expenses for the collection of taxes and other improvements in the short term to improve city government of approximately $3million which will have longer term effects in 06, 07 and 08 and beyond.
Budget Deficit for FY 06
What this all adds up to is a decrease in actual expenditures from $460million to $452million, and we are projecting at this time a deficit of approximately $6.5million. I would hasten to add that in the course of the next several months (nine months or so, or a year) there are various management initiatives and efficiency programs that we have planned to do, but we have not been able to incorporate those savings into this budget which is why we’re presenting you an interim budget. We expect to visit with you at least once, if not twice, more during the fiscal year to make adjustments to the budget... hopefully, downward.
AL: ...full disclosure, if I understand you correctly, that is apples to apples, because we had a wage freeze and this year we had a wage freeze in place right now. To the extent there are contract negotiations, that number will change.
PP: Yes. This budget does not account, on the city side of the budget, for wage increases. That’s obviously an issue the board has to grapple with, but it will increase this number by some number above the $6.5million.
Mayor Ryan: Mr. Puccia, is it fair to say that, while we can reasonably anticipate that there’ll be increased costs as we come to a conclusion on the negotiations of labor contracts, there will also be indeterminate expense reductions as we move forward on the implementation, especially of a lot of the studies that have either been completed or will be completed.
PP: Yes. Yes, Mr. Mayor, that’s a fair assessment, so....
CVR: So right now, it’s impossible to quantify either the increases that we anticipate or the decreases we anticipate.
PP: That’s correct, sir.
CVR: OK. Fine.
PP: That’s correct. Yes, Mr. Jacobson.
Risk Factors
Jake Jacobson: Just to make sure: the $6.5million is optimistic in the sense that it does not include the true cost of keeping the city’s pension plan solvent.
PP: Actually, I have the next slide, sir, to talk about some of the risk factors that we face, and, to the extent that I may ask Mark Ianello, the city’s auditor, to add a few points of color on these up-coming issues.
These [referring to next PowerPoint image] are what we consider the significant risk factors that the city of Springfield faces over the next number of years: Our unfunded pension liability as we have heard Mr. Trimarco talk about as a significant issue, which this city and many other cities will have to grapple with, is approximately $324.5million. Additionally, I believe it’s in fiscal 08, sir, [turning to Mark Ianello] that we have to report GASB 40. This [figure on the image] is an estimate; there is no actuarial study done. This is what our potential liability is. Those are longer term items, certainly something the city must begin to grapple with.
On the short term, from a risk factor, the most important items we have to grapple with are the three items listed under litigation. One is the Sprint case, which we’ve talked about several times in front of the board, the potential payment of back wages to the 29 employee unions, and, should we lose both that law suit and the law suit related to the redesign of the health plan, those are significant risk factors that the city faces over and above the $6.5million deficit that we are projecting right now for fiscal year 06.
AL: But, to go to Jake’s point, I mean if you look at the numbers on the first two bullets, those are staggering numbers. You’re talking, best case, $800million, you know, and worst case, $900million.
JJ: As I under...on point 2, as I understand the general problem, because certainly we don’t need to get into the...into the details of the ruling on the GASB, but the general problem is going to be that, beginning in fiscal year 08, we’re going to have to expense the actuarial number that is required, that is calculated to be required, for that year to fund the future liabilities. And since we have a mandate to have a balanced budget, that expense is going to count in the budget and we have to find revenues to cover it. That’s our core issue in layman’s terms, right?
PP: I’m going to defer to Mr. Ianello for a moment.
Mark Ianello: The number is required being disclosed in FY 08. The funding mechanism, the state has not grappled with yet, I don’t believe. The pension, for example, our pension liability, is on funding schedule; it will be fully funded in year 2028. The GASB 43 or the [unintelligible], the [unintelligible] health care, if you will, that liability is required to be disclosed in our financial statements beginning in FY 08. However, how much is going to be expense and what the funding mechanism is has not been addressed yet by the legislature. I imagine it will be, because it’s not just Springfield, it’s all communities including the Commonwealth....
CVR: My understanding, too, is that, while the numbers may be different, this problem of unfunded pension liabilities and health care liabilities is really chronic throughout the state of Massachusetts, and probably, even the state government itself is horribly underfunded. So it’s going to be traumatic for everybody when the funding rules are imposed.
PP: Yeah, I think that that is true, but certainly something that we must at least identify and at least begin to grapple with prior to FY 08.
AL: Yeah, but I think that, I mean I understand that it’s a big issue, but we have to worry about Springfield. I’m not worried about Lowell, I’m not worried about New Bedford, I’m worried about Springfield right now, and, ultimately, if I understand where Jake is going, what he’s saying is “Somebody’s going to have to pay this tab at some point in time.”
Now, I understand it’s not all one year, and it’s a longer period of time, but this is like, this way [indicates sharp upward curve with his hand]. That’s what’s going to happen, right? You know, all of a sudden, whether it’s 2008 or 2010 or something, the numbers....it’s going to go and grow dramatically, right? And there are some cities and towns that really don’t have an unfunded pension liability, as I’ve learned, that actually have, over the years, done a really good job, so we have that piece which is compounded by the health care, the post-retirement health care. I know we can’t solve it today, but it’s just to me is like big number.
CVR: Mr. Puccia, I can’t resist looking at the top line there, the unfunded pension liability. You remember Mr. Trimarco’s presentation at our last meeting when he gave the recent history of our pension plan and indicated that, had the right decisions been made some ten years ago, our unfunded liability would be about $100million less than the figure you show on the board.
PP: That’s correct, sir. That’s correct. Yes, Councilor Rooke.
City Councilor Tim Rooke: These cases we have in litigation? In a worst case scenario, if we lost all three of those cases....
PP: We would exhaust the trust fund.
TR: So then where would that leave the city, what position?
PP: Without cash to make payroll or to pay its vendors.
TR: So, in essence, they could win the court case...
PP: You would, you might win the battle, but you’d certainly lose the war.
JJ: Yeah. I mean, if they won, and we had an order to pay these back things, you’d, the only thing you could do to make payroll the following pay period is start laying off hundreds of people...
AL: You’d have a massive lay-off.
JJ: ...to have the cash to do that.
PP: You could to that....exactly.
JJ: If the ruling came down, I don’t think the state legislature could move fast enough to do a bail-out. You’d be just laying off, you know, people all over.
CVR: We’re in intensive care right now. We would be going to the morgue.
JJ: Yeah. Yeah. It wouldn’t be pleasant.
AL: Let’s not think those thoughts. Let’s go on.
PP: So, if there are no other questions, I’d like to proceed with the actual. You will see there in your packet if you will bear with me just to find my place, under appropriation order, we’re asking the board to approve the budget...
AL: Which one are we doing?
PP: It should be the first...
AL: 062901?
PP: Yes. 062901 which is to approve the budget $452,774,290 as itemized in the following attachment. Secondly,....
AL: Now, should we be doing this before Dr. Burke makes his presentation?
PP: Oh! You know what? I apologize, Mr. Chairman, and I apologize to Superintendent Burke...
AL: [to Burke, laughing] You’re only a significant portion of this budget.
CVR: [to AL, laughing] Good call. [to everyone] A wide-awake chairman.
AL: [laughing] Don’t let looks deceive you.
Education Budget
Superintendent of Schools Joseph Burke: I don’t have a PowerPoint, so essentially, what I’d like to do is just give a big picture overview of the school department budget. Essentially, the total is $335million. I do want to point out that that does include specific contributions from the city that are required to meet the minimum funding requirement and also contributions from the city to pick up the cost of school transportation and adult education which are not part of the net school spending law.
AL: How much is that in total? Do you know how much those numbers are?
JB: The total amount that the city is contributing? Yeah, I can do a quick estimate. It’s....$48million sounds right. But, essentially, the school department is in a situation where the Chapter 70 revenue is increasing almost $10million going into FY 06.
In addition to that, we are going to have, on the grant side of our budget, an additional amount which is, in our view, sort of a conservative estimate of about $1.3million. So, given those factors and some of the other savings opportunities that are available within all of the initiatives that the city is undertaking, we are planning to do some things budgetarily for next year which are intended to...we would view them as potential enhancements, essentially, of the budget. And I just want to give you some of the big highlights of that.
Increased School Department Contribution to Facilities Management
One of those is to increase the funding that the school department will be contributing to facilities management. Essentially, what we’re looking at is a minimum contribution of about $2million to continue to do some of the fundamental maintenance and up-grades that the buildings that is essential work that needs to be done to continue to improve the quality of life in the buildings and some safety to life issues. We did contribute $2million in this year’s budget, and the $2million in next year’s budget creates sort of a minimum threshold of the kinds of things that we wanted to do.
Increased Allocation for Textbooks
We have also added or already allocated to the schools $1.1million in additional textbook money for next year which we consider, again, to be a start in a long-term process creating minimum threshold levels in terms of textbooks for the schools. We anticipate that that investment of $1.1million will be continued or escalated in future years as we begin to re-establish textbook collections in the schools.
Increased Allocations for Technology Education and Science and Math Teachers
We have made some investment in technology education. There’re seven FTE positions going into the budget for next year in technology education. That is a minimum investment to begin to move us towards a state-required level of compliance and technology education that impacts our ability to get approval from the state for this school department technology plan.
We’ve also allocated a small amount of money for science support teachers. As many of you are aware, the Board of Education approved yesterday the science MCAS as a requirement for graduation for the class that will be coming up in 2010, and obviously, part of the effort that we’re going to need to make in a more dramatic way over the next few years is to up-grade the quality and the intensity of science instruction across the system. So this minimum investment is basically an opportunity to create one position at the senior high level, one at the middle school level and two at the elementary level to have some expert science people begin to work on up-grading our science instruction. And we’re going to need to up-grade that dramatically in the next few years.
We did add 17 positions in math education in next year’s budget. Those are expert content area teachers in math that are going to be working in our elementary schools to improve math instruction. We had already allocated about 18 positions at the elementary level. We’re adding the other 17 to make a full complement at the elementary level, and that’s a significant investment for us for next year.
Increased Allocation to Pre-school Education
And then there are various other areas: $210,000 in the pre-school area as an initial investment to increase our commitment to pre-school education and a couple of other minor adjustments here and there that we consider to be very important.
Contract Negotiations
We’re obviously in what I would consider to be delicate but aggressive negotiations to try to get a new agreement with the teachers. We perceive this to be a cornerstone of our ability to move the system forward, and we’re going to continue to work on that, and it’s a very important element of what we’re attempting to do.
Review of Special Education Services
So the one other piece that I would mention to you is an on-going review of the whole special education arena. This is an area where huge amounts of dollars are being invested in special education services required both by federal and state law, and we are trying to develop, locally develop, programs in critical areas such as in the area of autism, for example, where there has been a dramatic increase in the need for services. If we can develop and implement programs locally, then it keeps us from having to send students to out-of-district placements and that sort of thing, so we’re constantly doing that in the special ed area. So that’s essentially it.
AL: It sounds like we’re going in the right direction. I’m not an expert in education, but I would recommend to the members of the board and anybody here, if you haven’t read it now, there’s a new book out now on the best seller list called The World is Flat by Thomas Friedman, and, if you want a book that’s going to scare you more than a mystery story and happens to be factual about the future that America has to face and its next generation of students are going to have to face....We can’t give them too much in the way of science and math. They’re going to be competing in a completely different world than we have to compete in, or we did compete in. And, boy, I mean anybody that reads that and doesn’t change their thinking has a big problem on their hands.
JB: That’s an accurate observation. The whole math and science arena is an area that the state is going to be emphasizing.
AL: OK.
CVR: The approximate amount of grants in this budget, Dr. Burke, is what?
JB: About $46,800,000 in grants for the school department budget.
CVR: And then that’s pretty close to the amount of money that is the city’s share of the overall budget. You said $48million, $46million? Yeah, OK, fine.
AL: Very good. Any other questions before we...
CVR: I would like to say, Mr. Chairman, before we vote on the appropriation orders, how grateful I am to Mr. Puccia and Mr. Panagore for the intensive role they played in the budget preparation along with Mary Tzambazakis and the entire staff of the finance department. I think this, for the public when they see it, I think they’ll be gratified. I think this is the most complete and...budget that has ever been prepared in the history of the city of Springfield.
And I know the amount of work that went into this. These men and women night after night, week-end after week-end were here. And, you know, in these days when everybody is taking pot shots at everybody else, it’s really important that somebody recognizes that there’s a lot of people still struggling day after day to make this a better city. And, when we realize that a year ago we didn’t have systems in place that we could even count or make benchmarks as to what was happening, and we see the enormous strides that are made.... We’re not there yet, but, certainly, by a year from today, we will be where we want to go, and this has been, in my opinion, an overwhelmingly positive production on the part of all the people I’ve named.
AL: Well, I second that, but, [to PP] don’t let that go to your head. We’re into continuous improvement, so next year we have to be better.
PP: That being said, I would ask the board to approve executive order No.1 62901 in the amount of $452,774,290.
**MOTION PASSES UNANIMOUSLY
PP: Pursuant to Chapter 169 and in creation of a reserve fund of 1.5% of our tax levy, I would ask the board to approve executive order 062902 in the amount of $1,953,570.
AL: This is the amount that’s required under the Chapter 169?
PP: That’s correct, sir.
AL: Do I have a motion?
**MOTION PASSES UNANIMOUSLY
JJ: Just a question...I just want to make sure I’m remembering properly. This reserve is not a reserve that is required by statute, because historically Springfield was making no provision for renewing its capitol base in its budgets, but this is not a result of an independent calculation of how much we should be spending. In fact, an independent calculation might indicate that we should spend a lot more to keep the streets and infrastructure current.
PP: Yes, and I would say that one of the assignments that we have here is really to get a better understanding of the capitol needs and develop a spending plan for longer term. It’s just...our real focus in the past nine or ten months has been on the operating budget, but we do have a responsibility to better articulate what the needs are and how we might pay for it, and we will do so.
Item 3, 062903, is parking meter fund of $537,531., and I would ask the board approve schedule A.
AL: This is what, a separate needs, just technically we have to have a separate...
**MOTION PASSES UNANIMOUSLY
Transfer of Funds to General Fund from Bond Balance Account
PP: I’m going to ask Mary Tzambazakis to give the board a brief explanation of executive order No. 4 before we ask for your vote.
Chief Financial Officer Mary Tzambazakis: Executive order No. 4 relates to the $13million that was transferred back in September into a bond balance account as a result of available funds. And, as we’ve come to the year end, we’ve worked very closely with Mr. Jim Johnson from the Department of Revenue and Mr. Dennis Mountain to identify six areas where the projects had been identified and authorized by the city council, but the City of Springfield never authorized any short or long term debt, and used general fund money for these capitol projects. And, in essence, what this transfer would do would be to allow us to clean up our accounting records for the fiscal year end as of June 30 and to reimburse the city’s general fund for the money spent on capitol projects and replenish our cash flow situation by that amount.
AL: OK. So this adds up to $10million of ...it’s a transfer back to the general fund.
MT: It’s a transfer to balance the books.
**MOTION PASSES UNANIMOUSLY
PP: And that concludes our efforts to...the financial orders related to the budget, and we can proceed to the next item on the agenda. Thank you , Mary.
AL: And the next item is...
PP: Wait, wait. David [Panagore, finance control board deputy executive director] told me I made a mistake.
AL: Oh, oh.
JJ: Shame...
AL: We were giving you all these kudos here...
Roll-over of Notes in 05 and 06
PP: Forgive me, there was an item I left off . It’s an executive order related to the rolling over of notes in both fiscal 05 and 06. As you will see it...
AL: What number is it?
PP: It should be 5, but it’s..
TR: 062901, last item 2190
PP: It’s the rolling over of the $29million for fiscal 05 and the potential need of $6.5million in 06, and we’re just asking for the board’s approval, and then the chairman can sign those notes.
CVR: I just want to, for the record, Mr. Metzger, save my, express my concern as to the impact of all this, because I’m not sure exactly how it’s being handled. My understanding from Day 1 was that the $21million deficit for fiscal 05 was going to be considered a permanent borrowing from the trust fund. And, under the statute, that repayment doesn’t start until fiscal 08 and ends in fiscal 2012. I think this cuts a corner there, and my guess is that the board is ready to vote this. But, as I say, this is something that is troubling until I’m convinced that, indeed, the $21million is being borrowed on a permanent basis or a long-term basis from the fund. And, as I say, this has gone up and down and back and forth, and I haven’t been able to be satisfied, nor has the chief financial officer, up to this point. Hopefully, as the months go on, that will iron itself out.
AL: We have to do it or we won’t be able to have a ...
PP: We need to vote this item, notwithstanding the Mayor’s comments, we need to vote this item, and it neither...it does not prevent the board from considering how this money’s paid back in either the short-term or the long-term.
JJ: I think that, just so it’s clear to everybody, we should say that the Mayor is, in fact, correct, in this, that that was our intention. But, as I guess often happens in laws, it also requires the Secretary of Finance and Administration [sic] to act as a fiduciary. And, in that capacity, the Secretary of Finance and Administration has to be able to say that, in his considered opinion, Springfield would have the ability, as required by the statute to repay this long-term borrowing. And, given the foregoing material that people who have attended these meetings regularly have seen plus the budget for today, I think one can understand that it would be a very difficult thing for reasonable men to say that Springfield has a prayer of repaying this money as the statute requires. And so, I think he’s basically taken the position of “We should all keep working, and convince him that we can get to the point where, in fact, he can agree to the long-term borrowing in a manner that complies with the law.” And so, that is the issue that we’re wrestling with here, and [shrugs], we’ll go forward.
CVR: And all I’m doing is...in a lifetime spent as a lawyer, well, when you try a case, you reserve your rights....
AL: [laughing] Duly noted.
CVR: [laughing] I’m reserving my rights.
**MOTION PASSES UNANIMOUSLY.
AL: Now we go on. Is the next item on the list?
[Thomas Trimarco arrives.]
Reorganization of Governance and Management of the Police Department
PP: We would like to discuss our proposed reorganization of the governance and management of the police department. The board has an executive order in front of it as well as an ordinance. And, if I can just take a moment to explain the contents of them prior to your consideration. With the impending resignation of the Chief of Police, we’re proposing a reorganization that would, once the position is vacant, eliminate the position of chief in the city of Springfield and create a police commissioner. In this case, an interim commissioner, in whom the powers of the current police commission will be vested.
That position will be...not be a civil service position. We are recommending that the police commissioner, the permanent police commissioner, after we conduct a nationwide search as we’ve discussed, would be given a contract of not less than three years and not be co-terminus with the mayor. So that whoever is hired permanently, whether it’s Deputy Fitchett, who will be serving in an interim capacity, or whoever it might be, is not simply subject to the whims of the electoral process, but, certainly, has accountability to the mayor as the chief elected official and, ultimately, to the voters. That is a brief summary of what it is we’re asking for. At the same time in consultation with the mayor, we are suggesting the creation of a civilian review board. However, we don’t have...we would like the current police commission to serve as an advisory body to both the mayor and the interim police commissioner while we develop the specifics of the duties and responsibilities of the civilian review board.
AL: How long will that take do you think?
CVR: Thirty days, thirty to forty-five days?
PP: Thirty...
David Panagore: Until the next meeting of the board.
PP: Yes. Thirty to forty-five days, we believe, or the next meeting. It’s a short-term project.
AL: Not six months, nine months.
CVR: No, no. No, no.
PP: No, sir. It’s a rather complex item, and we didn’t want to rush through it, but we feel that with the services of the current police commission as well as the role that we will play in assisting Deputy Fitchett in his new capacity that it’s certainly something that we can manage over the next 30 to 45 days. You will also see some specific references to the qualifications of the future police commissioner and a host of other specifics, and I would ask the board to...
CVR: Why don’t you just spell out for the public the proposed qualifications, Mr. Puccia?
Qualifications of Police Commissioner
PP: OK. It’s contained in an ordinance which we will make public to you folks at the close of this meeting. [reading] “The police commissioner at the time of appointment shall have at least seven years experience as a captain or equivalent rank in federal, state or local police or law enforcement agency or in any combination thereof. Such police commissioner shall not engage in any other business and be sworn to faithful performance. The police commissioner at the time of the appointment shall possess a master’s degree in a field related to his or her duties from an accredited institution of higher learning or an equivalent degree.”
We are attempting to get the best pool of applicants to make a long-term commitment to the city of Springfield’s public safety efforts. That’s how this ordinance and executive order are designed.
AL: So you’ll be starting a search?
PP: Yes. One of the items...some of the language contained in this order authorizes the executive director to conduct, to begin the search in consultation and in cooperation with the Mayor.
AL: It’s going to be open to everybody, whether they’re...
PP: ...who meets these qualification whether they’re in Springfield, Massachusetts or Springfield, Missouri.
AL: ...or in California
TR: Phil, could I...one item, that I and I don’t know if this is the appropriate place to attach it to or amend it to, but there was never a performance review conducted, which I was surprised at, during the previous administration. Is that something that could be part of the ordinance that where creating where a performance review be done?
DP: Council president, we had assumed that that would be part of the contract that would be written with the individual.
PP: And there’s specific language of terminating for cause as opposed to...
TR: I saw that.
CVR: But you can rest assured that, Mr. President, that the whole search will be predicated on performance standards which will be intrinsic to the contract that we enter into. And, obviously, this will all come back before the board.
PP: And I would further assure the board that the standards themselves will be developed in a...in consultation with Secretary Flynn’s office and his staff and the Executive Office of Public Safety and Mr. Buracker as well.
TR: Thank you.
Gratitude Expressed to Chief Meara and Police Commissions Past and Present
CVR: I would just like to briefly say, as I said in the press conference that Phil Puccia and I and Tim Rooke had on Monday that, with this passing on into a new era of the Springfield Police Department, I want to express my gratitude to Chief Meara for her stewardship of the department for some nine years and her career as a member of the department for over 30 years. A good person, an honorable person, and should be proud of the incredible service that she gave the city.
I also would like to comment upon the fact that I bumped into a member of the law department coming into the building this morning, John Liebel, who, among his other duties, supports the police commission in its meetings. He spoke to me about the fact that he was at a historic event last night—he was at the last meeting of the Springfield police commission. And so it is. I’m not sure when our present system started, but I’m sure that it is 60 or 70 years ago, so this is a very, very abrupt and significant change. I would like to thank, generally, all of the men and women who, through these decades, have served in that very, very difficult role, probably one of the most, if not the most, important commission in city government. And, it’s really, it’s really a roster of a lot of wonderful citizens of our city past and present who have taken on this responsibility. And I want to give a special nod to the five people who, for the last year and a half, have carried out those responsibilities.
AL: I guess we need, technically, a motion for this order.
**MOTION PASSES UNANIMOUSLY.
PP: Could I also have a motion for the attached ordinance as well, please?
**MOTION PASSES UNANIMOUSLY.
PP: We’re making rapid progress here; we have just two other items here for you, gentlemen. And I’m going to ask Mr. Panagore to give you a brief up-date on various land and tax issues. And then, he will move into agenda No. 8 which is part of that presentation.
AL: Seven
PP: I’m sorry, seven.
Tax Collection and Blight Elimination
DP: Good morning, Mr. Chairman, members. As for you last month, a similar presentation this morning on our progress to day being made on our tax collections and property disposal generally, and our moves for blight elimination in the city. On tax collections, we’ve continued to move forward as an interdepartmental approach involving at least seven different city departments led by Sal Calvanese, the city treasurer collector, and JER Services, our tax collection consultant. As you can see, collections through June 24, we have now over the last three months, our accounts that have been paid in full are 341, although the number keeps varying as to who’s in tax title and who’s not, we’ve broke 3000 accounts, that’s a good average. That’s about 10% of the accounts; again, though, these represent low-hanging fruit.
In terms of collections, you’ll see it’s running fairly even, let’s call it $800,000 or $750,000 or so per month. If you equalize it out for about $2.36million collected so far in collections, and our collection rate has remained steady. In terms of moving forward (and that process to date has been basically notice letters, phone calls, and scrubbing the files), we’ve had a lot of work to do since many of these go back 20, 30 years to make sure we actually have the right debt and everything is clear, and there’s a lot of work that has to go into that. We have approximately 99 accounts where there are still open questions.
On the going forward on delinquent tax collection, we need really to start moving properties through the land court foreclosure process there. To that end, we are filing in the next 30 days (and we’re...again, this relates to the blight elimination), we’re focusing not only on the properties that owe the largest amount of money, but the properties that are abandoned, the houses that are in big disrepair. There are 61 of those of the 200 or so that have been discussed previously that are abandoned properties in the city, 61 of those have back taxes owed, and we’re moving in the next 30 days to begin the foreclosure process on those properties. We’re working very closely with the land court. We’ve met with them. They want to be very cooperative. I’ll be discussing that in a second, but we will be moving on those abandoned properties within the next 30 days for filing. Following thereafter, we have the 100 largest commercial properties in the city who owe together $7.1million in the next 60 days, and the 100 target residential properties who owe which is $4.1million. So in the next 60 days, we’ll be filing on over $11million owed to the city.
In terms of how we go about this process, I do mention that what we have done with the land court is seek a waiver from them on the tax title. They’re very cooperative. There are title examiners that need to be...for each property a title examination needs to be done. The land court has been very cooperative an has accepted a waiver from us so that we can supplement that list and add more title examiners. We’ll also bring more legal resources to the table.
In terms of property disposition once it’s gone through the foreclosure process, led by the housing department and working with the planning department and the economic development department, we’ve created a standardized RFP for release of all the properties that we hold. And we will be moving through them now on a monthly basis, releasing properties every month on the street as staffing allows. Right now, this coming month, we’ll have 14, and they’ll be released next Tuesday, 14 residential properties. You’ll see a map in your...after the property disposition RFP process, you’ll see a map with dots [refers to board members’ packet]. Those represent where they are. You’ll see that they fairly well align with the Commonwealth’s initiatives for neighborhoods. Those three neighborhoods do represent the areas of the city where there are the most problems.
After that RFP, the following month, we’ll do another one that will be with the SRA, that’s the Springfield Redevelopment Authority’s residential properties. The Springfield Redevelopment Authority has over 76 properties that they’ve held for years and years. We are now moving to dispose of those, working with the state in terms of the process. All those properties require state approval through the state DHCD, that’s the community housing department. And then, we will be moving the next month after that onto commercial properties. the planning department is taking the lead on the commercial and industrial properties. And then, we’ll continue to cycle through month after month on these properties, increasing our through-put as we go.
Final discussion is on blight elimination. Working with the state, with the Secretary Foy’s initiative, blight elimination, working with the DEP, we’re going to be forming a[n] interdepartmental city and state strike force on blight elimination in these neighborhoods. What this will entail will be a consolidated, cooperative effort coordinating all the departments and focusing our resources. In terms of our resources, the state has, as I stated yesterday, the state has they will be making available resources for rehab in the neighborhoods, but predominantly $1.5million for demolition.
I come before you today to seek additional city funding to supplement that funding. Right now, we have 24 buildings that need to be demolished in the city. That is just what we have identified to date; it’s about $2.6million. We hope through the blight elimination revolving fund to be able to begin the demolitions in order following this. So, combining the city’s request of $1.8million from available revenues, we hope to work on demolition, clearance, and enforcement action. All three need to happen. Sometimes, there’s a property that’s not going to be repaired, that has tires and old cars, not just demolition, and lots that need to be cleaned up. All of these monies will be liened against the property, and then the city will either collect that lien from the owner, if they wish to sell the property at a sale, or through a foreclosure process. So...
AL: This side you’re supposed to be revolving...
DP: Yes, revolving and refunding. And then our collection in the last result, we’re close to through foreclosure. To that end, executive order 062903 bring before you for the purpose of revitalizing the city neighborhoods and eliminating blight seeking a revolving fund and the establishing of a revolving fund as required by law and a transfer order of $1.8million from the receipts reserve for appropriations line item to the blight removal revolving fund. This fund, again, would also be a multi-departmental fund working between the DPW, the housing code enforcement department, the city solicitor’s office, the treasurer’s office, and the building inspectors. It would all be done, coordinated through the executive director on the control board.
AL: That’s focused on this one initiative. We’re not spending this money on anything else.
PP: That’s exactly right.
CVR: Mr. Chairman, I would like to say, especially for the benefit of you and Mr. Trimarco and Mr. Jacobson that...who have given so generously of your time to the city of Springfield, but perhaps may not know the city as well as some of us who live here all the time that, in my opinion, this initiative that Mr. Panagore has just described is second only to the issue of public safety from the point of view of quality of life.
We have neighborhood after neighborhood that has just gone down and down and down and down and down, and, up until now, for a decade or two there’s been a paralysis in this city of being able to deal with this problem. I think that what has been just outlined here by Mr. Panagore is a) the result of a lot of hard work by him and key people in the administration who want to make this happen. I think it’s beautifully thought through. I think it’s a comprehensive approach, and I especially salute Mr. Panagore for coming to use with the idea of creating a revolving fund with this $1.8million, because that really, almost in a painless way, gives us more money to go forward, because even the state’s initiative announced yesterday and our initiative $1.8million here today probably doesn’t get us where we want to get to. But this is such an enormous start, and I think that the satisfaction and the excitement of a whole community is going to be electrifying. This is a very, very major step forward.
AL: Great. I mean, I view it as a public safety issue, actually.
CVR: I think you’re right.
AL: ...and so, to me, it’s just an expansion of the definition of public safety, so I’m happy with doing it, and happy we had the funds to be able to come up with it.
CVR: But this is a...
AL: Mr. Jacobson...
CVR: What I love is it’s a mature analysis and a mature presentation. I mean this is...you know, this goes above and beyond what the city has been saddled with for a long, long time. This is first-class.
AL: Well, then, I guess we need a motion.
**MOTION PASSES UNANIMOUSLY.
AL: Anything else, Phil, on your agenda?
PP: No, sir, other than to thank the financial staff in addition to what the Mayor has said. They really did a tremendous amount of work, and I appreciate it personally and professionally.
AL: And I think you guys for doing all the work and Mary.
The Finance Control Board then voted unanimously to go into executive session to discuss litigation and collective bargaining.