Letter sent to: Thomas Trimarco, Alan LeBovidge, Michael .Iacobson, Domenic Sarno and Phil Puccia by email on 9/2/04 at 4.-57p. m.
Re: Springfield Finance Control Board
I was not presented with a draft of Alan LeBovidge's letter until late in the afternoon of August 31.
A review of his draft and later revisions made several fundamental points clear:
1. The analysis of the Board presumes that the city must implement balanced budgets without any further extraordinary state financing beyond the normal local aid payments made to all cities and towns.
The Board's view is that employee wages must be reduced if the City is to have annual balanced budgets.
3. Take home pay reductions for municipal workers must form an integral part of the recovery plan.
4. Failure to achieve these stated objectives in collective bargaining will inevitably lead to the appointment of a receiver before June 30, 2005.
The Necessity of Additional State Aid
There are many causes of Springfield's present financial collapse including poor management of the responsibilities of the City government. However, the primary and overwhelming reason is that since 1992 (13 straight years) the City of Springfield has been discriminated against as to the amount of state aid from the Additional Assistance Fund. There is $379,000,000 annually in the fund. The only two significant areas of substantial state aid to the general government side of municipal government are lottery receipts and the Additional Assistance Fund. For all of these years Springfield has languished in the 35th position with respect to aid from Additional Assistance in spite of the fact that it is the 3rd largest city in the Commonwealth. Springfield receives $1,829,000 annually from this source. Somerville, which is half our size, receives $16,219,000. Cambridge, one of the richest communities in Massachusetts, is 2/3 our size in population and receives $17,956,000. Boston which has four times as many people receives $164,211,000 or 91 times as much as Springfield. A string of small, affluent cities and towns with populations of 18,000 or 22,000 receive more than Springfield does.
This is not a secret even though no one wishes to talk about it or face the implications of this injustice which is compounded year after year. Indeed, the failure to face up to this profound injustice is a scandal which now the Control Board evidently intends to leave unchallenged by the September 1 report of the majority which indicates that no new state aid beyond normality will be presumed.
For the Board to so presume at this stage of the Board's life is irresponsible, short sighted and chilling. I say "chilling" because it means that the extraordinary size of the budget gap is evidently destined to be dealt with exclusively by increased taxes and fees from the people of our city and wage and benefit reductions for our employees. Such a blueprint or road map is a disaster for this city and the people who call it home.
Not only must additional state aid, over and above "normal" state aid be forthcoming, but also the fight for such aid should be led by the Board to fill the budget gap which is left after sensible increases in revenue and expenditure reductions through efficiencies and productivity gains have been effectuated.
To do otherwise, to indicate that we, the people of Springfield, have to do this all by ourselves, without any additional state aid, is destructive and removes from us the essential ingredient of hope.
We have heard much talk of "not rewarding
incompetency or mismanagement" as a reason or the reason for not assisting
Springfield with anything but loans. Let me
point out that the incompetency or mismanagement, to the extent that it existed
was not mine, nor was it committed by the beleaguered people of Springfield. To now punish and step upon
152,000 citizens at a time when they need help is cruel and unwarranted.
This is a
demonstrably poor city. 35 to 40,000 people exist below the poverty line. Over
half our population are minorities. I had hoped we would have received significant
aid from the state government in May and June. That was not to be and we have
tried to adjust ourselves to the fact that we must now go through a process to
ascertain with certainty just how much we could close the budget gap by
intelligent, responsible decisions on the two issues of increasing revenues and
reducing expenditures. But at all times I counted on the fact that the Control
Board majority would ultimately stand with us inasmuch as they are fiduciaries
to the City of Springfield and vigorously make the case for additional state
aid to wipe out the systemic deficit still remaining after we have all worked
faithfully together to reduce the deficit to as low a figure as possible.
It now appears that
such a course of action will not be embraced by the Board and that the attempt
will be made to have our employees take pay cuts of whatever amount is
necessary in order to fully wipe out the residual deficit. This obviously will
be accompanied by the warning that unless these men and women allow this to
happen, the trap door will be sprung and the city will be plunged into
receivership. That will be their fate even
though the vast majority of the city employees in general government are
receiving wages that are not out of line with the pay of city employees having
comparable duties in cities and towns that are readily comparable to ours.
You and your
colleagues are not from here. You know nothing of the fabric of our city or the
stresses that already confront our people. We are starting a process which could,
if the Board exhibited leadership, be a model for dealing with distressed urban
centers. To grind down our people, all of our people, without any assistance
being sought from the state will be a tragic mistake.
For eight months we
have worked tirelessly to evaluate the true condition of Springfield and to point out the need for
responsible conduct on the part of every one of us. There is a golden
opportunity here. Our energies will not flag if there is hope. That hope will
be kindled only if the Board shows the courage and the wisdom to point out to
the Commonwealth where it has woefully short changed Springfield in aid to general government and that it is
willing, and eager, to lead the struggle to remedy this long standing injustice
as we move forward.
Our focus should be primarily on the general government side of the budget.
That is where the gap is. That is where the remedy must be found. The general
government share of the budget is about $200M. The fixed costs of debt service,
health insurance, school busing, and pensions represent about $11 OM of this. That leaves $90M to operate all of the
general government departments. About 75% of those costs are wages and
benefits. This would be about $67M. To think that we could squeeze 40, 50 or $60M
out of $67M is nonsense.
I agree with the middle of page 4 that revenue increases and non-labor related
cost savings can only partly reduce the deficit. Reduction of some benefits,
changing of work rules will assist further. The one place I am saying we should
not go is to expect, on top of everything else, to reduce wages and take home
pay. That residual portion of the deficit gap is what must be funded by the
state. However, if you have already given the state a free pass (which you
have) you have shouldered 1500 men and women with a burden they cannot carry.
The gratuitous waiving of our rightful claim for state assistance is especially
distressing.
Other Reasons For My Acute Displeasure
1. The financial analysis that has been done to date by the Board is so superficial that it is premature to render many of the opinions that are set forth.
2. As is pointed out on page two, with the shortcomings of the City's financial systems and controls, along with the lack of adequate staff, an accurate accounting of the deficit is extremely difficult to determine and may not be readily achievable. That is where we should have let the issue rest. Maybe you feel comfortable with the ouija board figures that you characterize as "reasonable estimates", but I don't.
It is not a mortal sin to say we don't have enough information yet, but we will send it to the legislative committees when we have some confidence in our findings. That would have been the responsible course to take. Certainly the board as an entity has not arrived at the quantification of the deficit figure. Maybe one or two of you did, but no one bothered to forward a call to me for my opinion or input.
3. I hope you do not just roll your eyes when I mention the human cost of this potential massacre? I know the people who will pay the sharply increased taxes and fees and I know the employees who live from paycheck to paycheck. In all too many cases there will be real pain, something that none of us can really appreciate no matter how hard we try. All I want is the state to play a role, a real role in helping to field part of the burden; not all, just part.
Conclusion
I'm attaching a memo I wrote to Eric Kriss on May 20th of this year. It made sense then and it makes sense now. Obviously it fell on deaf ears at that time. Maybe you can shrug off what they did to Springfield, Holyoke and Lawrence 13 years ago, but I can't. That was a disgrace, the effects of it persist to this day and Alan's letter in forgoing any attempt at additional aid condones a horrible miscarriage of justice. By any objective analysis we have been underfunded during that period by at least $20M a year. $20M for 13 years is $260M. It would be a different city if we had been treated as well as your Boston or Jake's Cambridge. That's all I want, good old fashioned fair play; a level playing field.
I apologize for the length of the above. It was stimulated by your statement that you, Jake and Alan are owed a clear articulation of reasons for my views. While I may at times express myself strongly to the three of you, it will always be with a deep respect for you as individuals and for the views that you hold. I feel that Alan's letter sets forth some points (evidently at Eric's direction) which left me no alternative other than to register my strong disagreement. This I have done in this memo. Domenic and I will also file a formal dissent in about 10 days.
Regards,
Charlie
9/7/2004