Massachusetts State Senator Stephen Buoniconti and State Representative Thomas Petrolati have jointly called for an audit of the Springfield Finance Control Board, in response to Friday’s decision by the board to draw down about $22 million from an interest-free state loan to the city for the purposes of economic development, funds that are set to expire June 30 if not spent or allocated by then. (Read the meeting transcript here, scrolling down to the section, "Borrowing from Fiscal Recovery Trust Fund.")
Albany-based news station WAMC has some coverage of that decision following last Friday’s meeting, including a few key sound bites you may not hear elsewhere.
The funds are essentially the balance of what remains for just this fiscal year out of the total $52 million loan. Perhaps Buoniconti and Petrolati have a suggestion as to what else should have happened with the balance; their main argument is that the money was intended for emergency use to save the city from bankruptcy. (Too bad the Republican didn’t publish their actual letter on the matter, which might have shed a bit more light on their point of view.)
The legislators apparently conceded that the legislation creating the control board and the state loan does not actually prohibit the use of the funds for capital projects. Today’s article in the Republican states however that the loan "was created with the clear intention of having [the money] used for operational needs."
The actual sentence from reporter Peter Goonan’s article is, "The two state legislators said the law does not prohibit the control board from using the money for capital projects but was created with the clear intention of having it used for operational needs." Whether the sentence refers to the law, the loan specifically, or the control board itself is a bit unclear.
During last Friday’s control board meeting, the sole opponent to the decision to draw down these funds for the purpose of economic development was City Council President Kateri Walsh. She said, during the meeting, "I don’t disagree with the idea or the concept. I just think that since it was the legislature that created the act establishing the control board, they should have input into this, and I am not comfortable supporting it without having our delegation have a voice."
In other words, the concept of using the funds for economic development appeared to work just fine for Walsh, but she objected to the mechanism of the decision, which did not in this case include an explicit discussion with state legislators about the idea.
Again, we have not heard from Buoniconti and Petrolati whether they had some other notion of how the balance of the loan should be spent or allocated before June 30, or perhaps whether they are of the opinion that access to it ought to expire, since the control board was perhaps skilled enough not to require that $22 million for operational needs.
So this begins to look, to me, like a situation where we needed less aptitude on the part of control board members in order to justify using all of the loan during this fiscal year. Darn those able accountants! Why couldn’t they have wasted the money? Then we’d have access to even more.
During the meeting, Walsh asked, "Does it have to be voted on today? Can it wait? Can it wait for the new board?"
Mayor Charles Ryan responded, "In the time, we could lose this money very easily." The control board meets, at most, once a month, and often more like every five or six weeks. It was not clear last Friday whether this meeting would be the board’s last, or if maybe they would meet again in June, before the fiscal year is up and also before Governor Deval Patrick appoints three new members to replace three he has decided ought no longer to serve.
Walsh replied, "I wonder how doing something like this without the will of the legislature is going to impact the bill to extend the terms of the loan."
Sure enough, according to today’s Republican, Buoniconti has "pulled back" the bill (whether that means withdrawn or delayed is not clear) to extend the loan; if the terms of the loan remain as is, due to be repaid by 2012, control board executive director Philip Puccia (pictured below, right, with Mayor Ryan) has been quoted as saying that the city will see a $4 million deficit per year, even though the budget is currently balanced.
Repeatedly, Puccia and other board members have been noted as saying that the city’s budget is fragile and delicate. (Hear him say it again in that WAMC piece.) Still, board members are now being replaced, for reasons that are not entirely clear to this observer (poor performance? political will? partisan ideology? territorial aims?), and the very legislators who helped to shape the law and form the language that created the control board and the $52 million interest-free loan are now stepping in based on what appears to be a frustration over not being asked about the specifics of how to use those funds—unless, unlike Walsh, they disagree with the idea of using it for economic development.
In any case it feels like the city just can’t win—it’s being treated like a child stuck in a custody battle.
An editorial in today’s Republican comes down hard on the state legislators, pointing out that more economic development is what the city needs—and it’s no mystery, no secret:
Over the years, there have been a number of experts invited to suggest what Springfield can do to become a healthier city. Every study, every consultant’s report, every professional analysis has agreed on at least one thing: more economic development.
So what else ought we to do with that money? Has the control board made some error in judgment here, that now really needs to be audited? Since the board’s presence in Springfield, in some ways, we have already been undergoing a massive, extended audit, so will there be a new board to oversee the existing board? Does someone out there in state government have a better plan?
