For Immediate Release - June 05, 2008

Governor Patrick Files Extension for Springfield Loan Repayment

BOSTON -Thursday, June 5, 2008 - To help the City of Springfield achieve economic stability and long-term growth, Governor Deval Patrick today filed legislation to extend a state loan repayment deadline and establish several city governance reforms that will help the Commonwealth's third largest city achieve a bright economic future.

"The City of Springfield has made great progress toward fiscal recovery since the Commonwealth extended a $52 million state loan and established a Financial Control Board in 2004," Governor Patrick said. "As the city begins to repay that loan and the Board begins to cease its operations, it is appropriate to propose changes to ensure that this progress continues."

"This bill reflects Governor Patrick's commitment to partnership with the City of Springfield," said Administration and Finance Secretary Leslie Kirwan. "We worked closely with key state and city leaders who want to help sustain the financial progress made over the last several years."

The Administration, including Secretary Kirwan, has worked extensively with Springfield Mayor Domenic Sarno and members of the Springfield legislative delegation to create the proposal.

The proposed legislation extends the deadline for the city's repayment of its state loan by 7 years from it original term of five year. The City must make its first payment this fiscal year (FY 08), and under the proposal, would have until FY 19 to fully repay the debt.

To help the city transition prepare for the dissolution of the four-year-old Finance Control Board scheduled next year, the legislation enacts the following city governance reforms:

  • Establishes a Chief Administrative and Financial Officer (CAFO), to supervise all city administrative and financial activities. The Mayor will appoint the CAFO from a search committee's recommendations, subject to the A&F Secretary's approval for the life of the state loan. The CAFO will have a minimum city budget approved by the A&F Secretary.
  • A new city comptroller, appointed by the CAFO with the Mayor's approval, and a director of internal audit, appointed by the Mayor with the City Council's approval.
  • A new consolidated Department of Community Development.
    Consolidation of city and school administration and financial operations under the CAFO.

Additionally, the legislation requires enhanced monitoring of city finances by the Department of Revenue, modeled on several other recent laws. If a new financial crisis occurs, legislation for a new control board or receiver could be proposed.

The legislation would also place on this November's state election ballot in Springfield the binding question of whether to extend the Mayor's term from two to four years. Mayors of many larger cities, such as Boston for example, serve four years in order to provide stability in budgeting and operations. Also, the bill establishes a committee to study the Mayor's salary and report by July 1, 2009.



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