Sarno meets with state officials about city's budget
Date: 5/16/2012May 16, 2012
By, G, Michael Dobbsnews@thereminder.com
SPRINGFIELD Is the city seeing a perfect financial storm in its future?
Mayor Domenic Sarno traveled to Beacon Hill on May 7 to explain to state leaders what kind of help the city needs to avoid an over-use of the $40 million the city has in reserves.
Sarno explained to Reminder Publications
that without certain steps taken on the state level, the choice before the city is to enact cuts in services or to rely on the reserves, which could be exhausted in several years.
"This will be the toughest budget," he said.
The mayor met with Speaker of the House Robert A. DeLeo, State Senate President Therese Murray, Senate Ways and Means Chair Stephen M. Brewer and Jay Gonzalez, secretary of the State Executive Office of Administration and Finance.
His visit was preceded by a letter to Gov. Deval Patrick last month asking for a variety of actions to help the city. Chief Administrative and Financial Officer Lee Erdmann, Director of Finance Timothy Plante and Budget Director LeeAnn Pasquini joined Sarno.
As the state nears finalizing its budget for the next fiscal year, Sarno wanted to stress the need for additional local aid.
Springfield is the first community in the state to hit the tax levy ceiling, Sarno said, restricting the city from how much more it can raise property taxes.
"I don't think [the founders] of Proposition 2 ½ ever thought of what is happening now," he said.
Sarno said that between cuts in state aid over the last two budgets the city has lost $7 million and declining property values that were further exacerbated by last year's tornado, the city lost millions of dollars in revenue.
Complicating the issue is the fact that two key budget items associated with the School Department which has a separate budget are paid by the city. The city must pay for school busing, which ranged from $20 million to $23 million, Sarno explained, as well as the bond indebtedness for new school buildings.
While the city coffers are thin, he noted the School Department budget has a $10 million surplus.
"I'm not looking to raid the School Department," he said. He is seeking a way, though, that he could use $5 million of that surplus to help pay for the school busing costs.
Another budget factor relates to last year's tornado and Nor-easter. Sarno said that he is still seeking reimbursement from the Federal Emergency Management Agency for the money the city spent cleaning up after the tornado.
One state mandate is also causing the city concern, he said. The Massachusetts Department of Environmental Protection is requiring that trash disposal be decreased by 30 percent by the year 2020. Municipalities would face sanctions if they don't meet this goal. Sarno said the only way to meet such a requirement is to markedly increase recycling.
The state officials asked him if the city has taken advantage of various state-approved revenue enhancing measures and Sarno said the city has enacted all of them with the exception of a local addition to the hotel tax.
The local hotel tax is part of a revenue package Sarno has asked the City Council to consider. He hopes they will approve it in order to make any cuts necessary for this year a little less severe.
"If the City Council would begin looking at the revenue package, that would be helpful," Sarno said.
Sarno started a second round of municipal budget hearings on May 10. The meetings are open to the public. For the schedule, go to www.springfieldcityhall.com/COS/fileadmin/images-news/2012/May/may7th/Fiscal_Year_2013_Budget_Hearing_Schedule.pdf
One budget point which one city councilor is not laying to rest is whether or not the city should seek bids for its health insurance.
Tim Rooke said that he and School Committee Vice Chair Christopher Collins are "still determined to push for a Request for Proposals (RFP)."
Sarno said the issue of the city staying the in the state health insurance program, the Group Insurance Commission (GIC), came up in his discussions last week in Boston. City officials have maintained Springfield is getting the best deal with the GIC.
Rooke said that at a meeting on May 7 with members of the City Council, City Attorney Edward Pikula, Insurance Director Linda Parent and others, the issue was discussed one more.
"Just about everyone in the room asked, 'What do we have to lose [by going out to bid]?'" Rooke said.
The exceptions were the administration officials who said a RFP would require hiring a special consultant, which could cost the city between $30,000 and $40,000. Rooke has received written estimates from three consultants that the cost would be $5,000.
When asked if the city had written estimates confirming the far greater amount, the answer was no.
Although Rooke has obtained a letter from Blue Cross/Blue Shield stating the company could save the city money, a more definitive assessment can only made with the insurance census information. If necessary, Rooke will file a Freedom of Information Act to get the documentation.