The City of Springfield Presentation to Standard & Poor’s May 20, 2010 - PowerPoint PPT Presentation

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The City of Springfield Presentation to Standard & Poor’s May 20, 2010 PowerPoint Presentation
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The City of Springfield Presentation to Standard & Poor’s May 20, 2010

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  1. The City of SpringfieldPresentation to Standard & Poor’sMay 20, 2010

  2. The Springfield Team City of Springfield • Domenic J. Sarno, Mayor • Lee C. Erdmann, Chief Administration and Finance Officer • John D. Judge, Chief Development Officer • Timothy J. Plante, Finance Director • LeeAnn Pasquini, Budget Director • Stephen Lonergan, Treasurer • Patrick Burns, Comptroller First Southwest Company • Cynthia McNerney, Managing Director

  3. Agenda • Mayor’s Strategic Priorities • Local Control - Financial Management • Springfield’s Success & Continued Priorities • FY10 Update • FY11 Recommendations • Economic Development

  4. Mayor’s Strategic Priorities • Public Safety • Education • Job Creation • Neighborhood Revitalization • Financial Management

  5. Local Control - Accomplishments • Successful recruitment of CAFO • 30 years of experience • Successes in another local City • 32 key goals and objectives identified • Need to address long term liabilities

  6. Local Control - Accomplishments

  7. Local Control - Accomplishments • For context, the FY11 budget development process began with a projected gap of $45.5 million. • To solve for this gap, ideas from the four year forecast have been included in the budget recommendations: • Maximizing offsets to grants • Developing a City-Wide Cost Allocation Plan • Reviewing all organization studies • Consolidating A&F functions of the School Department and City • Programmatic Cuts • Maximizing the use of MUNIS • Consolidating all solid waste activities into the Enterprise Fund • Hiring a Dispatch Director • Maximizing energy savings • Additional recommendations will need to be considered over the coming years to solve for the projected gap.

  8. Local Control - Accomplishments • Smart Training • Conducted leadership training for executive and mid-level management in the principles of human resource management, budgeting, communication and continuous improvement. • LEAN Training & Continuous Improvement • Conducted 2 day training of all City senior management; conducted 1 Kaizen event and plans in the works for another; Steering Committee developed to keep the process locally driven. • MUNIS Payroll • Implemented module to run all payroll through MUNIS to help control FTEs and costs. • Position control within MUNIS has been an important tool to control costs.

  9. Local Control - Accomplishments • A&F Department Restructuring • Created a stand alone payroll department; consolidated HR and Labor Relations; Moved CitiStat under A&F • Consolidation of City / School Business Functions • Single Finance Director overseeing both; reviewing similar model for HR and IT • Grants Management • Hired a dedicated grants manager and to date have applied for $5 million in grants across City departments.

  10. Local Control - Accomplishments • Single Stream Recycling • Implemented SSR with new trucks and additional purchase of blue bins anticipated in FY11. • Capital Improvement Plan • Includes $374.2 million worth of projects and equipment for various departments in the City of Springfield; FY11 Capital Budget strives to address the City’s largest capital needs which are facilities and vehicles for public safety and public works.

  11. Local Control - Priorities • Budget balancing and continuing to build reserves • Trust Fund repayment (dependent on Legislative proposal) • Continue with City and School business functions consolidation • Follow and update Financial Policies which are adopted as ordinances • Continued improvement of the City’s bond rating • Monthly financial and taxpayer reports • Quarterly financial and performance reports starting in FY11 • Strategic planning and governing for results • Maintain strong management structure in place for continued success

  12. Springfield’s Success • Continued improvement to management of municipal operations • Streamlined management • Studied departments • Implemented improvements, hired managers, outsourced where appropriate • Trained staff • Developed and using data to manage operations • Continued management of cost centers • Benefits: Projected health insurance savings of $70M - $96M (FY08 to FY12) • Wages: Wage growth within City’s ability to raise revenue; time and attendance system • Energy costs: ESCO; improved bidding and management • Debt Service • Continued fiscal management • Implemented MUNIS. Established MUNIS Division to ensure system success • Developed Capital Improvement Plan • Energy Savings Contract (ESCO) project continues to yield over $1M in savings annually • Enacted Financial Policies as ordinances to strengthen financial control • Consistently managing departmental budgets and controlling expenditures • Comptroller granted formal sweep authority to prevent overspending • Improved budget development process to be more transparent, establish performance goals and improve communication • Created the Productivity Bank to encourage innovation, cost savings and accountability across the City • Implemented a new Grants Unit to coordinate grants management, ensure proper compliance and prevent turn backs • Continue to meet reporting requirement required by the State Department of Revenue and the Executive Office for Administration and Finance

  13. FY10 Update FY10 anticipated surplus of $11.4 million based on: • Spending Changes • Employee benefits • Delayed hiring and vacant positions • Mild winter • Continuous management • Revenue Changes • License and permits collections • Tax liens

  14. FY11 Budget • Budget development began in January 2010 when Department requests were due; 5-10% reductions from each department were requested. • Mayor’s public hearings were conducted in March. • Drafts were shared with departments throughout the process to ensure priorities were being properly met. • City Council is currently deliberating on the recommendations.

  15. FY11 Budget – Challenge & Drivers Challenge: • Structural Deficit • Spending Growth • Minimal Revenue Drivers: • School Department • Employee Benefits • Contractual Increases • Other Obligations (legal and contractual)

  16. FY11 Budget – Solutions • To solve for the projected budget gap, many solutions were used to balance budget reductions, revenues and use of reserves:

  17. Group Insurance Commission The chart below demonstrates the savings in health insurance based on the projected costs without GIC. The City continues to benefit from its use of the GIC for employee health insurance.

  18. FY11 – School Department Budget • The budget for the School department is $310.0 million in general fund dollars; an additional $5.1 million has been allocated from ARRA grant funds. • This represents a 2% increase over FY10. • During the budget process, the School department solved for a projected $16 million gap. • The budget has been adopted by the School Committee and is currently before City Council.

  19. FY11 Reserves – Stabilization Fund

  20. FY11 Reserves – All Sources • The FY11 budget recommendation contemplates that 2% over the overall revenues come from reserves.

  21. Improved Financial Management and Results The chart below shows a history of Springfield’s Free Cash balances with recent positive balances deposited into Stabilization.

  22. General Fund Balances • The General Fund balance is 15% of the total $533.9 million budget recommendation.

  23. Collection of Back Taxes The chart below shows Springfield’s aggressive collection of taxes that continues to be a priority of the City.

  24. Local Economy • Strong economic base with hospitals, colleges and finance and insurance, and precision manufacturing • Low rental and home owner vacancy rates • Economic Center of the entire region • Although unemployment is high we have passed the peak and expect to see declines • Taxable value will decline in FY11, but some property types show signs of stabilizing

  25. Lowest Rental Vacancy Rates City% 1. Springfield 3 2. Bakersfield 3.3 3. Boston 3.7 4. Albany 4.1 5. Columbus 4.7 6. Honolulu 5.2 7. Portland (OR) 5.3 8. Albuquerque 6.1 9. New York 6.2 10. Buffalo 6.4 Metro Area Residential Vacancy Rates Lowest Homeowner Vacancy Rates City% 1. Worcester .4 2. Rochester .5 3. Springfield .6 4. Richmond .7 5. Albuquerque .7 6. Birmingham 1.0 7. Jacksonville 1.2 8. Los Angeles 1.2 9. Hartford 1.3 10. San Antonio 1.3

  26. Springfield is the Economic Center of the Region

  27. Springfield is the Economic Center of the Region

  28. % of Pioneer Valley Employment

  29. Springfield Employment by Industry

  30. Economic Development –Recent Highlights • Demolition and environmental remediation of Chapman Valve/Crane site for industrial redevelopment • Produced a monthly e-newsletter • Created a Strategic Marketing Committee & Soft Launched Campaign • Hosted a Developers Conference – 240 attendees • Broke ground on Homeless Resource Center • Expended $16.8M to advance State Street Corridor • Received $3.5M in Neighborhood Stabilization Funds • Established a new nonprofit development partner: DevelopSpringfield • Partnered with area colleges on several grant opportunities • Expended $5.5M to advance South End Revitalization Project • Administered more than $4M in Community Development Block Grant Program, to 40 local projects and organizations • Opened the 100,000 sq. ft medical/life sciences building on Wason Avenue. This new building had a building permit of $13 million. In addition, a second much smaller building has been built on that site.

  31. Economic Development – Current Projects • Established MOU with UMass to create an Urban Design Center • Won ULI Technical Assistance Project on Riverfront revitalization • Moved to redevelop: Union Station; Court Square; former Asylum building; 1550 Main; Mason Square; former Zanetti School; Waterfront Club; Eastern Gateway and other key infrastructure projects • Created Special Tax Assessment to keep Titeflex in the city and saved 103 jobs. Titeflex will invest another $3 M to modernize their 58 year-old facility • Won Green Communities Award and working with PVPC on greening city services • Established a Small Business Forum series in Neighborhoods • Secured F.W. Webb to purchase land and construct a new 70,000 sq ft building at Smith & Wesson Memorial Industrial Park.

  32. Economic Development – 2010-2011 Strategic Objectives • Reshape our Economy • Restore balance in our housing stock • Build the Springfield Brand • Green and beautify neighborhoods • Foster Collaboration • Build Capacity

  33. Economic Development – 2010 Strategic Actions • Establish Springfield as leader in the Green Economy • Implement Global Partners/Socios Globales • With Regional Employment Board and other groups, create GED career-based educational alternatives • Expand GreenSeal - Springfield’s conservation & energy efficiency award program • Break ground on new data center at former Tech High • Demolish and redevelop former Asylum building • Market former York Street Jail, Court Square, 1550 & 1592 Main Street sites for redevelopment • Develop/refine City’s Marketing Campaign • Cultivate UMass presence downtown • Procure Owners Project Manager, Design & Legal for Union Station Regional Intermodal • Implement new Acela Inspectional services software system

  34. Municipalities with General Fund Budgets Exceeding $70 million • Springfield Total Reserves does not Include Promise Program

  35. Municipalities with General Fund Budgets Exceeding $70 million • Springfield Total Reserves does not Include Promise Program

  36. Municipalities with General Fund Budgets Exceeding $70 million • Springfield Total Reserves does not Include Promise Program

  37. Questions & Discussion