As I’m writing this week’s article for the newspaper, the weather forecasters are predicting a nice snow storm for the first day of Spring. After this rather mild winter, I thought Mother Nature might play catch-up. I happen to love the range of weather we have in New England, so I’m ok with a little more snow, but I know most people would rather wait until next year to see it.
I know the kids are all hoping for another day off from school. If it snows, have fun and stay safe. Kids that are staying home from school should offer to help out their neighbors who can’t manage the snow themselves. I know they’d appreciate it.
The City Council has a few issues that you may want to follow: the annual budget process, the growing debts and obligations, the redevelopment of the property on the corner of Elm and Arnold Streets, the possible extension of the terms for Mayor and City Councilors, and the City’s Capital Improvement Plan. I’ll discuss these briefly below. If you have any questions or concerns, please feel free to contact me at any time via phone or email.
First, the annual budget process has begun. Departments have started submitting their FY17 budget requests to the Mayor. The Mayor and financial staff will be reviewing everything and making appropriation requests to the City Council later this year (hopefully in early May). The City Council Finance Committee will hold a series of open public meetings with the department heads starting in May, and they’ll make recommendations to the full City Council in June. This year there are great challenges. The current operating budget required about $2 million from our Free Cash to balance. By the end of the fiscal year, we’ll only have about $1.5 million in that account. Therefore, even if we level-spend next year, we’re already starting with a ½ million deficit. We also know that we can’t level spend. We know some budget line items have to increase: bond payments, health care costs, pension funding, severance payments, vehicle payments, and facility maintenance costs to name a few. Several employee groups also have “step” raises built into their labor contracts. So, even if the mayor and unions agree to zero percent cost of living increases, the employees will still get additional compensation. All of this adds up to over $2.5 million in expense line item increases. If we max out property taxes (which no taxpayer wants), we can only raise the levy limit by about $1.7 million. Maybe we’ll get lucky and have enough new growth and new Free Cash to break even, but in order to do that, we’ll have to freeze a lot of expense line items, we’ll have to delay necessary maintenance of city facilities and infrastructure, and we’ll have to keep ignoring the massive snowballing unfunded obligations related to retiree health care. It’s not an attractive picture.
Second, the growing debts and obligations related to employee retirement benefits are now in excess of $300 million. We just don’t have the money to pay this, and we don’t have any hope of finding money anytime soon. I personally feel we owe the employees what was promised to them, but we have to change things going forward, and we have to make hard choices about funding these obligations. I think we need to change the rules for new employees, and make FIRM plans to fund these obligations on an annual basis going forward. We can’t keep deferring.
Third, the Elm & Arnold project is moving along slowly. The Flahive building is coming down this week, and the PVTA project should start in the coming months. The Westfield Redevelopment Authority is trying to acquire the old bowling alley property and several small adjacent vacant properties so that they can bundle the entire acreage into one lot that is large enough for a developer. The WRA is looking for funding from the City to cover these acquisition and property preparation costs. Given the financial challenges detailed above, I’m concerned about giving the WRA any of the Free Cash that we’re likely to need to balance the budget in the coming years. Therefore, I asked the City and WRA to pursue a WRA bond to cover their needs (“Authorities” in Massachusetts can issue their own bonds and acquire debts). Unfortunately, that takes a while, and the WRA can’t really issues bonds without City backing (the WRA has little real asset value and no income). After meeting with the Mayor, Mr. Mitchell, and the City Treasurer, we came up with the option of using some of the City’s stabilization account to jump start the process. Stabilization funds may be used for one-time special investments like this, and by not using Free Cash, we’re leaving ourselves in a better position when trying to balance the budget next year. When the property is developed, the City will be partially reimbursed from the sale of the property, and will receive income from fees and annual taxes.
Forth, this week the Legislative & Ordinance Committee recommend extending the terms of the City Council and Mayor to four years. This has been talked about many times over the years, and I was the one that asked for it to be review again a couple of years ago. I know there are pros and cons to this. Running every two years is a great burden, and it also takes more than two years for many things to happen in government. On the other side, voters want to be able to hold elected officials accountable, and they are concerned about having a “dud” in office for four long years. I see both sides. I also see that over the years we’ve had a hard time attracting new candidates for office. I think I’m leaning toward supporting four year terms on a staggered schedule (for example: Mayor and ward councilors in one group, and then at-large councilors in another group two years later). If we do four years, I think the citizens ought to have the ability to have a recall election to get rid of “duds”.
Finally, back to budget issues, the Finance Committee has been reviewing the City’s Long-Term Capital Improvement Plan requests. We have about $120 million in requests so far, and we haven’t met with all of the departments yet. We only have about $7 million per year in annual debt capacity (principal and interest payments) in our budget, and we’re already close to this $7 million number for the next couple of years. Therefore, the odds of making any serious dent in this Capital Plan list are not very good. The Mayor and Council are going to have to prioritize. Many very worthy projects are just going to have to wait. The City is already tapped out, and we already have massive growing unfunded obligations ($300+ million as mentioned above). The Committee, Council, and Mayor are looking for new revenue sources, but it’s a real challenge, and the odds of massive inflows of non-tax revenue are very slim.
I’d like to congratulate all of the Winter Sports teams for another successful season. I also want to congratulate the Volunteers in Public Schools team, and all of the volunteers, for running a fantastic “Credit for Life” program for high school seniors Thursday at Westfield State. I participated on the “Fun, Fun, Fun” team who was selling the kids activities and trips. I really was a lot of fun, and I think the kids all learned a lot about personal finance, budgeting, debt, and credit ratings. I hope the schools continue to offer this valuable program in the coming years.
In closing I’d like offer best wishes to the candidates for School Superintendent. Two of the three final candidates are from Westfield, and the third is an experienced Superintendent from the eastern part of the State. As mentioned in the past, I think the Superintendent is one of the most important jobs in the City. I know the Selection Committee and the full School Committee are working hard to hire an experienced educational administrator and leader who can follow on the successes of Dr. Scallion and her team, and who can further improve the educational experience and outcomes for all of our kids going forward. There are several public meetings next week. Concerned parents should make the effort to attend and participate where appropriate. See: http://www.cityofwestfield.org/Calendar.aspx for the meeting schedules and agendas.
Happy Spring,
Dave Flaherty
Westfield City Councilor
[email protected]
Disclaimer: The views expressed in this column are those of the author and not the staff, editor, or publisher of this publication.
