Sarno's proposal to close budget gap receives strong opposition
Date: 4/25/2011
April 25, 2011By G. Michael Dobbs
Managing Editor
SPRINGFIELD — Mayor Domenic Sarno said the fiscal year 2012 (FY12) budget "was one of the most difficult budgets in recent history."
When queried if the concessions he was going to ask city workers to endure would extend into the fiscal year 2013 (FY13) budget, all Sarno would say last week at a press event is that "FY13 would be a difficult budget."
He added, "This is a fluid process. We'll see what is on the table."
In the next several weeks, the Sarno Administration will undertake a sales job to convince the unions representing city employees that they need to make two key concessions to close a $5.4 million budget gap for the upcoming fiscal year.
Another party that will need convincing is the City Council, which must approve Sarno's budget before June 30. Some of the councilors wondered last week if Sarno has done enough to trim the budget or to seek other ways to improve financial resources.
While reporters waited in the hallway of City Hall for their presentation, Sarno met with city department heads and others behind closed doors on April 19. He then made a public presentation of his plan to close the budget deficit.
Sarno said that municipal employees — other than School Department personnel who are under a different budget — will be subjected to a wage freeze in FY12 and will be required to take one day off a month without pay.
Without these concessions, Sarno would be forced to lay off about 150 full time employees.
Sarno explained the original gap was $49.4 million and was decreased through revisions and cuts by his financial team. His plan will also use some money from the city's $43.7 million stabilization or "rainy day" fund.
"What I'm doing now is in the best fiscal health of the city," Sarno said.
Springfield's budget woes are not being helped by the state. Sarno explained this is the fourth straight year the state has cut financial aid to Springfield. Since 2008, the city has seen a 34 percent decline.
The rough financial news extended to the school budget. Sarno said the School Department must tackle an $18 million deficit caused, at least in part, by the expiration of funding from the American Recovery and Reinvestment Act.
Sarno explained the city has control of only 21 percent of its budget with the other 79 percent representing fixed costs such as health insurance and pensions.
City Councilors Timothy Allen, Michael Fenton and Amaad Rivera attended the press event. They said the announcement's timing came with short notice only about two hours.
Allen and Fenton said the mayor was adopting several of the points that they and other councilors had made last year concerning relying less on the stabilization funds.
City Councilor John Lysak proposed two days after the mayor's announcement that the city look into an early retirement program instead of furloughs.
Lysak said in a statement, "Furloughs and lay-offs should be something used as a last resort method for reigning in the budget of our city, not a first and only priority."
City Councilor Timothy Rooke said that significant savings for the city ones that would have prevented the $5.5 million gap would have been realized if Sarno had taken different approaches on several key issues.
Rooke asserted the city could save about 10 percent of its health insurance costs — $7 million — if it went out to bid. Although Sarno has said the city cannot leave the state's insurance pool, the Group Insurance Commission (GIC), for legal reasons, Rooke maintained the city is not legally bound to the GIC and that Sarno is "hiding behind false statements."
He speculated that Sarno has not wanted to offend Gov. Deval Patrick by pulling out of the GIC.
The city's $6 million expense renovating a building it does not own and signing a 20-year lease at the former Federal Building on Main Street to house the School Department is another expense the city didn't have to incur, according to Rooke. He strongly advocated the city go out to bid for new space for the School Department, but Sarno decided not to seek other possible venues.
A recent proposal to start a "pay as you throw" trash fee, which would have encouraged greater recycling, would have saved the city close to $800,000 in its first year, Rooke said. That proposal was rejected.
Rooke said that he would rather see the city adjust the cost of the health insurance plan from a 70 percent share paid by the city and 30 percent paid by the employee to a 60 percent and 40 percent ratio instead of furloughs.
He believes that people would "much rather have benefits adjusted than lose pay."
