WESTFIELD – The City Council Finance Committee began its annual budget review process last night, discussing the 2014 fiscal year budget package with seven department heads in just over one hour.
The committee members questioned the department heads about funding changes, up or down, between the department’s current spending levels and those proposed in the next fiscal year budget.
Finance Chairman Richard E. Onofrey Jr., had allocated 10 minutes for each departmental review and while most fell within or under that timeline, the committee members had extended discussion with two department heads.
City Treasurer Meghan Miller was questioned at length not about her departmental budget, but about the city debt, the management of which is a primary function of her department.
The finance members noted that funding for debt has decreased substantially, by between $1.5 and $2 million, a trend that does not sit well with the committee members.
“My problem is that taking $1.5 million and moving it into fixed costs, mostly personnel, is that we’ll never get that (debt capacity) back once it is gone,” Onofrey said. “We will have bonding capacity, but we will no longer have the ability to pay for it.”
At-large Councilor David A. Flaherty said that the city has lost nearly $2 million in debt capacity under the proposed 2014 budget and suggested that Miller take steps to protect that capacity by “setting aside money” to front-load principle payments of existing and anticipated debt.
Miller said that she has been discussing that option with other city financial officers, as well as the administration, and said one option has been identified.
“The City Hall improvements are a fixed price contract which does not allow for change orders, so we could sell the bond sooner rather than doing short term financing,” Miller said. “I totally understand your concern.”
Miller said that usually bonds are approved for a project, but not immediately sold in case the project cost increases because of unanticipated circumstances. The bonds are typically sold only after the project is completed.
Miller said that another option would be to move the principle payments forward. Typically, debt is structured so that the principle payments falls into the following fiscal budget.
The second extended discussion was with City Solicitor Susan Phillips, Law Department supervisor.
That discussion did not focus on departmental line items, but rather on services the department provides to the School Department.
Historically, the School Department has had a substantial line item for outside legal council and more recently hired an in-house attorney to deal with much of the collective bargaining interaction with the department’s unions. Helen Bowler, who initially served at the city’s human resources director, then in that same capacity at the school department, provided those services.
However, after Bowler left the School Department, the legal representation line item substantially increased, an additional cost center at a time when the department was dealing with $1 million budget gaps.
Mayor Daniel M. Knapik pushed the city and School Department to share resources and to eliminate duplication of services, and the cost associated with that duplication.
The city and School Committee agreed to a shared-resources program in several areas. A major area was that the Law Department would provide collective bargaining and other employee-related legal services.
Phillips said that attorney Jeff Krok, who also began in the Personnel Department, was reassigned to the Law Department to handle all municipal collective bargaining, arbitration and labor issues and Attorney Shanna Reed spend about half, if not more, of their time dealing with School Department issues.
At-large Councilor John J. Beltrandi III questioned Phillips on how the School Department contributes for those services.
“Is there a structure in place?” Beltrandi asked. “Our initial agreement (with the School Committee) was that there would be shared expenses.”
Phillips said that she requires the Law Department staff to submit weekly reports that “bill time” for work on School Department issues ” so I can show the (School) Superintendent (Suzanne Scallion)” the cost of those services.
“It’s a long, slow process to get that (interdepartmental relationship) to work,” Phillips said. “They have also had costs associated with my department. They had to move people and equipment to make room for my staff.”
The Law Department has been relocated to the Angie Holmes building on the South Middle School campus as part of the temporary closing for City Hall for renovations.
Phillips said that she has had “meaningful discussions” with Scallion about shared expenses.
“We will demonstrate that they will spend less money with us than with their outside legal counsel,” Phillips said, adding that a formal agreement will be feasible “once they start to see that we’re saving money.”
Flaherty said that the School Department budget should reflect that interdepartmental relationship.
“We should see a line item in the school budget,” Flaherty said.
Onofrey suggested that an “intergovernmental line item” should be included in the school department budget as a mechanism to transfer money to the Law Department for services provided.
