PRESS RELEASE, CONTACT: Jim Leydon, Communications Director
City of Springfield Closed Out FY 2014 with a Budget Surplus; Will Increase Stabilization Fund
December 16, 2014 -Springfield, MA- Mayor Domenic J. Sarno announced today that the City of Springfield has been notified by the Massachusetts Department of Revenue, (DOR), that the City of Springfield has been certified with a $14.6 million surplus known as free cash for the fiscal year ending on July1, 2014.
“This is a significant milestone for the City and its award winning financial team. With our disciplined budget approach we will be able to add to our stabilization fund and send a strong message to the bond rating agencies that we are managing our finances prudently and for long term sustainability.” Mayor Sarno went on to say, “Maintaining the highest bond rating ever assigned to Springfield is paramount to our successful economic development efforts. Investors want to locate and do business in a city that is on sound financial footing with a long term outlook of stability.”
The City’s financial ordinances, which are in accordance with accepted government accounting guidelines, state the City should maintain between 5%-15% of its overall budget in reserve. Currently the City maintains a $29 million reserve which is close to the 5% minimum.
Mayor Sarno will seek to add $11 million to the City’s stabilization account. The added reserves will bring the account balance to $40 million and represent a reserve of approximately 7% of the city’s overall budget. An appropriate reserve balance is critical to maintaining the city’s AA bond rating.
CAFO Timothy Plante stated, “This is a tremendous accomplishment for the entire financial division. Being able to manage the budget to a $14.6 million surplus, will allow the City replenish the stabilization reserve account to the tune of $40 million. This increase in the “rainy day” account will send a strong signal to Wall Street and the bond rating agencies as we prepare to issue debt in February 2015. “
*For the eighth year in a row the city received the Government Finance Officers Association’s (GFOA) Distinguished Budget Presentation Award. The GFOA’s Distinguished Budget Presentation Awards Program is the only national awards program in governmental budgeting. Award recipients have pioneered efforts to improve the quality of budgeting and provide an excellent example for other governments throughout North America.