Donato: Municipal Relief Bill Will Save Medford Cash

The following announcement is from State Representative Paul Donato (D-Medford, Malden):

Municipal Relief Bill Released from Committee

Will help cities and towns save money, operate more effectively

Representative Paul Donato and Senator Jamie Eldridge, chairs’ of the Joint Committee on Municipalities & Regional Government, have announced that the Committee has favorably reported the 2010 Municipal Relief Act. This omnibus relief bill is a package of legislative changes and local-option programs designed to give cities and towns the tools they need to operate more effectively and, ultimately, save money.

The Municipal Relief bill is a combination of the best ideas suggested by the Municipal Relief Commission (co-chaired last year by Chairman Paul Donato and Senator Stanley Rosenberg), Governor Deval Patrick, local officials throughout the state, legislators, municipal advocacy groups, and private citizens.

“Now more than ever it is critical that the Legislature be able to assist our communities with the challenges that they face today and in the future. I’ve been directly involved with this initiative for some time now, and I am confident that we have put together a comprehensive array of cost saving and efficiency creating tools to help our cities and towns throughout the Commonwealth,” added Representative Paul Donato (D-Medford).

“These are tough times for our cities and towns, with cuts to local aid coming at the same time as rising costs, and the state has a duty to help. This bill won’t make all of these problems disappear – but it will give municipal officials new tools they need to tackle these problems head on and govern as effectively as possible in this time of lean resources,” said State Senator Jamie Eldridge (D-Acton). “I also want to applaud Governor Deval Patrick for his leadership in filing the Municipal Partnership Act, as well as Senator Rosenberg and Representative Donato, for the incredible work they did with the Special Commission on Municipal Relief.”

“Our cities and towns are in a challenging situation, there’s no question about it,” Senator Rosenberg (D-Amherst) said. “But the good news is that challenges spark creativity and encourage collaboration. I believe this bill represents a good-faith effort to give municipalities as many tools as possible to meet their budgeting needs.”

Convened by the Massachusetts Legislature in 2008, the Special Commission on Municipal Relief, chaired by Senator Rosenberg and Representative Donato, was given the task of finding ways that cities and towns throughout the Commonwealth could raise revenues, reduce costs and operate more efficiently. Through the collaborative efforts of lawmakers, business leaders, educators, labor leaders and municipal officials, the 16 member bi-partisan legislative commission offered a comprehensive report on its findings in May of 2009.

Weighing all the components of Governor Patrick’s Municipal Partnership Act together with the recommendations of the Special Commission on Municipal Relief, the Joint Committee on Municipalities and Regional Government began the process of putting together the best possible proposal that could be offered to the Legislature. Three hearings were held across the state, and the Committee made every effort to listen to the ideas and concerns of all interested parties – including retirees, current municipal employees, unions, municipal officials, and municipal advocacy groups – and build consensus where possible.

Many of the changes proposed in the bill are simple and straightforward, allowing municipalities to do things one might have assumed they already could do. For example, this bill allows municipalities to establish an e-billing program, a money-saving practice that has been used by private companies for years. It also allows cities to offer benefits to their workers – such as healthcare spending accounts and larger optional life insurance maximums – already available for state workers, and gives cities the ability to enter into long term leases.

Other provisions are more pro-active, giving municipalities new tools to manage employee benefits, facilitate regionalization, operate more efficiently and enjoy more flexibility in municipal finance. For example, provisions to promote sound bidding practices and allow municipalities to enter into cooperative purchasing agreements and mutual aid agreements will help cities and towns save money on services, equipment and staffing.

After careful consideration, the Committee decided not to include municipal healthcare reform in this package. Although the Committee agreed that this controversial issue needs to be addressed, stakeholders remain far apart on a solution to the issue. In the interest of passing an effective municipal relief bill quickly, the Committee opted to continue work on municipal healthcare reform separately.

Highlights of the bill include:

– Transferring Eligible Municipal Retirees into Medicare: The bill will reduce benefit costs for municipalities by requiring that all eligible retired local employees enroll in Medicare as their primary source of health insurance coverage, as is already done on the state level.

– Optional Early Retirement Program: The bill includes an Early Retirement Incentive program for cities and towns. This program would allow a limited number of long term municipal employees to receive early retirement benefits, while restricting the town’s ability to refill those same positions to no more than 30%, 45%, and 60% of the former total salaries over the next three years, respectively. This program would be at the option of municipalities, giving cities and towns the flexibility to determine for themselves whether this tool is appropriate for their community.

– Retirement system funding relief: The legislation proposes a pension funding relief plan to help local pension systems address unprecedented asset losses in a fiscally responsible and manageable way, without the significant increases in payments that would otherwise be required. Specifically, the legislation allows local systems to extend their funding schedule subject to certain conditions and requires that future asset gains be used to shorten schedules, not reduce payments.

– Support for School District Regionalization: The bill includes provisions to facilitate regionalization of school districts by allowing regional school districts to join with municipal districts in a superintendency union, and streamlining the process to allow regional school districts to access their stabilization funds.

– Collective Purchasing: Another idea to help participating communities to save money, this would allow education collaboratives to leverage economies of scale by entering into bulk purchasing agreements with public entities outside our state borders. It would also give cities, towns and school departments the ability to participate in cooperative purchasing agreements with public agencies outside of Massachusetts.

– Mutual Aid Agreements: The bill would allow cities and towns to join statewide mutual aid agreements to provide police, fire, emergency medical, public works, and other public safety assistance to other municipalities. This would allow cities and towns to save money on staffing and equipment while still being prepared for emergency situations.

– Sound Business Practices: This would incorporate a number of changes to procurement law, including a provision to allow cities and towns to use reverse auctions when buying products and services in large amounts, reducing costs by having sellers bid against each other to provide the best price.

– Municipal Electronic Billing: The bill would allow cities and towns the option to establish a voluntary e-billing program – an added convenience for residents, and a money-saver for cities and town.

– Renewable energy revolving fund and betterment program: The bill would allow municipalities to offer a loan program to property owners for renewable energy improvements. This would give towns interested in promoting energy conservation and green energy the legal mechanism to set up a revolving fund for this purpose.

– Flexibility in Municipal and Regional School District Borrowing: The bill would
increase flexibility in municipal and regional school district borrowing by extending the allowable borrowing terms. It would also increase flexibility for emergency borrowing, expedite the process for achieving savings through refinancing, and remove overly restrictive requirements for amortization of debt.

– Abandoned and Unclaimed Checks: Currently, a check issued by a municipality is not deemed abandoned until 3 years after issuance. This new provision would allow towns to print a one year expiration period, to be printed on the checks. Current requirements to attempt to contact the recipient by mail and provide public notices prior to reclamation remain unchanged.

– Local Option Tax Amnesty Program: The bill allows towns to adopt a temporary tax amnesty program. Through this program, municipalities could waive portions of the penalties and interest due on unpaid taxes, so long as the taxpayer paid the principal amount owed and was not the subject of a criminal investigation for failure to pay taxes.

The bill has now been referred to the House Committee on Ways & Means for their review.