Springfield fiscal conscience do cost. (WMP&I and Google images)

Despite the big figures involved, the Springfield City Council scampered through its regular February meeting uneventfully on Monday. But with looming costs for current and future retirees, the meeting was a sobering reminder of Springfield’s future fiscal challenges. While the city’s year-to-year fiscal situation is stable, out years of pension obligations and retire health care remain difficult thanks to misfeasance at the close of the last millennium.

The mismanagement led to the city’s pension fund joining the state’s pension investment pool. It did not reverse the system’s deficit, which the city has slimmed somewhat with extra payments. There is a state-mandated schedule to fund obligations, but this will become daunting over time. To lessen the burden, Springfield will buy US Treasury notes and put the interest toward the pension and health care.

Ward 6 Councilor Victor Davila was absent. Councilor Justin Hurst, Kateri Walsh and Tracye Whitfield participated remotely. Councilor Malo Brown also attended remotely and intermittently.

Reports of committee began with Ward 7 Councilor Tim Allen’s briefing on the Finance Committee’s meeting. Previewing the financial smorgasbord ahead, he observed the full Council’s agenda had also dominated the Finance Committee.

Planning and Economic Development Committee chair Melvin Edward, Ward 3’s councilor, said his panel received an update on the cannabis industry in Springfield. Wearing his hat as chairman of the Responsible Employer Ordinance committee, Edwards relayed positive feedback from labor. The REO encourages city contractors to employ women, minorities and city residents on project.

Quoting Charlie Payne of Carpenters Local 336, Edwards said, “The work of the REO is having a positive impact in the city.”

After report, councilor accepted the revenue and expenditure report. Comptroller Pat Burns said the December report showed the city at exactly 50% of revenue and 54% of expenditures. However, Burns indicated this was to be expected as the city makes regular pension and debt payments each month.

Following this were a pair of road reports. The first was for Eversource to relocate electrical lines at the intersection of Locust, Main and Mill streets. Public Works chief Chris Cignoli said this is actually preparation for a big Water & Sewer Commission project at the same location.

The second report was acceptance of a traffic control agreement at St. James Avenue. As Cignoli noted, the Council had previously approved takings for this project. As the Massachusetts Department of Transportation is funding it, the city must ink this agreement with the state before it can proceed.

Helen Caulton-Harris in 2020. (WMP&I)

Even before the pension fund transfers, the Council accepted some big bucks. Among them was a nearly $2.4 million grant from Uncle Sam for homeless health programs. City Health & Human Services Commission Helen Caulton-Harris mental health, dental and other health services the city provides for the unhoused population in Franklin, Hampden and Hampshire counties.

The feds also gave Springfield nearly $66,000 for COVID-19 homeless vaccination efforts. From the state, Springfield received $240,000 for homeless youth programs. The city administers this grant to reach homeless youth from throughout Hampden County.

Councilors also approve nearly $150,000 for the police department as a federal Byrne JAG grant. Deputy Chief Rupert Daniel, presenting the grant, said it would go toward drug treatment.

Later in the hearing, Daniel presented a $1 million bond for police vehicles. He said Pearl Street’s fleet still includes Crown Victorias, which Ford discontinued in 2011. Some date to 2007. Daniel told Councilor Walsh that the department currently procures vehicles through the company that converts them to police use. However, they are also looking at alternatives.

Cignoli had more than utility reports for the Council. That cat had at $15 million worth of canary with him. Earlier this month, the United States Department of Transportation announced 37 communities nationwide would receive implementation grants for street safety. It is part of the larger Safe Streets and Roads 4 All program that was part of the bipartisan infrastructure bill President Joe Biden signed in 2021.

The DPW director said Boston and Providence were the only two other New England communities other than Springfield to receive this grant. It will fund street safety improvements for pedestrians, bicyclists and drivers. Fifteen intersections and 10 corridors will benefit.

Only the finest canaries! Cignoli at Monday’s meeting. (still via Focus Springfield)

In response to questions, Cignoli said Springfield had until the end of 2025 or 2026 to spend the funds. He told Walsh the funds would cover improvements on State Street in front of the library. The site of several road fatalities, the city will not need to bond for the work now.

After rounds of congratulations from councilors, the body accepted the funds unanimously. The Council also greenlit smaller grants for health and elder services programs as well as health and animal control donations.

The administrations requested and the Council approved the withdrawal of statements of interest for school construction. The city will revise them before submission to the Massachusetts School Building Authority.

However, the kumbaya lessened when the Council faced a request to up cost-of-living adjustments for retirees. Burns, the Comptroller, explained that before he left the governor’s office, Charlie Baker approved higher COLAs for retirees. The city opted to accept it, but that will add $7.1 million to the city’s pension obligations over ten years.

Councilor Whitfield asked Burns how this would affect the existing plan to fully fund the city’s pension system. He said that it would be added to the existing schedule. The measure passed 11-1 with Ward 2 Councilor Michael Fenton in dissent. He had opposed another COLA-related measure a few weeks ago, pointing to the city’s pension deficit.

The Council also approved a $5.9 million transfer to the police department for free cash. The money will fund a union contract the Council approved on January 9. Chief Administrative & Financial Officer Timothy Plante told councilors that after Monday’s orders, there would be about $30 million in free cash, that is unexpended funds from prior fiscal years. He told Whitfield that the city is still assessing what do with the remainder. Adding it to reserves and addressing capital needs are among the options.

The final two major financial orders were a $15 million transfer to the pension and a nearly $6.8 million transfer to the retiree health care fund. Except, that is not exactly what they are. Rather, the cash will be put into a fund to buy T-bills. The interest will ultimate go into the pension and health care funds.

Councilor Whitfield voted for the Treasury bill transfer, but questioned its impact. (WMP&I)

Plante told Councilor Allen that this money was not a payment into those funds. He later assured Whitfield that the city was not risking the principal because the US government bonds are considered extremely safe—well, maybe. Given that the neither the original amount nor the interest was going directly into the pension and health care funds, Whitfield asked for assurances the city would not repurpose the money. Burns, the Comptroller, said doing so would require a vote of the Council.

Later, while debating the health care fund transfer, Whitfield pointed to rising property tax bills and questioned the impact of this plan. While the city could earn a few million from the Treasury interest, it still paled in comparison to escalating payments to pension and retiree health care. Plante said the transfers would eventually go to those funds, but the city could carry the annual payments for now.

“When we get to a point where they’re growing at a rate that is unsustainable we will apply what we earned,” he said.

Both transfers passed without dissent as did approval for animal control to pay prior year bills. Lori Swanson, the city animal shelter’s executive director, said some prior year bills accrued during the transition from her predecessor.

The final item was a transfer of $1.375 million to the Law Department’s settlement account. Sources say it mirrored another effort to encourage settlement of police misconduct cases. The full purpose is unclear because the Council went into executive session to discuss the matter with city lawyers.

When councilors returned, the transfer passed 9-2, the minimum threshold for financial transfers. Councilor Hurst and Whitfield dissented.

(WMP&I)

With the mayor’s race picking up speed, financial stewardship is not likely to rank as high as some issues. Pensions and other retiree costs are not quite a Death Star in Alderaan’s sky, but they do cast a shadow on the city’s fiscal future. With two councilors running for mayor against Domenic Sarno, the matter could appear. Perhaps it should, but the debate will require some nuance.

For now, everybody is content to hold hands and jump together to outpace fiscal threats.