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City on brink of 15-year loan extension

Date: 1/5/2009

By Natasha Clark

Assistant Managing Editor

SPRINGFIELD The City of Springfield is very close to being granted a 15-year extension on the repayment of a $52 million bailout loan issued to them in 2004. The bill recently made its way through the House of Representatives and is expected to come before the Senate some time on Monday.

The bill's passing is a win-win for many local legislators including State Reps. Sean Curran and Angelo Puppolo, as well as Cheryl Coakley-Rivera who recently consolidated her proposed trash fee, Finance Control Board (FCB) and city employee residency amendments to the bill.

"If this bill was not passed, there would have been lay offs of at least 150 workers," Curran told Reminder Publications, adding that he and Puppolo threatened to shut down the House through legislative maneuvering.

City officials anticipate cuts in local aid in the upcoming fiscal year and Curran said having the loan extended from its original five-year term gives the city the opportunity to get its financial footing and maintain financial self-sufficiency.

As previously reported in The Reminder, if the city continued on with the current payback schedule, they would have to scramble to find over $10 million to make the FY09 and FY10 payments.

"It would have been a financial disaster for the city to come up with $10 million dollars," Puppolo said.

Mayor Domenic J. Sarno feared that amendments to the legislation would jeopardize the bill's passage. In a Dec. 30 press statement, he called on the Massachusetts House of Representatives to pass the legislation as is without the amendments before the legislative session ended on Jan. 6.

While Coakley-Rivera withdrew the amendment to extend the FCB past their scheduled July 2009 disbandment, the other two were adopted. The first amendment will repeal the trash fee in July 2011, by reducing the fee in $30 increments each year until it is eliminated.

Puppolo said this is an opportunity for the city to explore other options. "I think the big thing is that the city needs to look at ways to recycle more. There's tremendous potential there to save some money," he said, noting that East Forest Park is participating in a pilot program.

The second amendment requires that new city employees as well as current employees who are receiving promotions must become Springfield residents within six months of their appointment. The language is subject to collective bargaining.

"The residency requirement is long overdue. What is important is that there will be no waivers allowed. Statistically like 90 percent of a person's income goes to the city or town they live in," Coakley-Rivera said. "Seventy percent of the budget is salaries. If 90 percent of that stayed within the city we wouldn't be in this situation. It will improve our business community and home ownership."

In addition to the loan extension and amendments, the legislation also creates a Chief Administrative and Financial Officer (CAFO) position to supervise all city administrative and financial activities as the FCB prepares for its dissolution this year. The CAFO shall be appointed for a term no longer than three years and will report to the mayor.

If passed by the Senate, Gov. Deval Patrick is expected to sign off on the bill. It is estimated that the city will save an average of $7 million a year.