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Mayor Sarno files three Orders for City Council Approval to Support City Retirees

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Mayor Domenic J. Sarno has sponsored three orders for the City Council to consider at their regular scheduled meeting for Monday, February 13th that will support city retirees.

The first order, sponsored by Mayor Sarno, will increase the Cost of Living Adjustment (COLA) for city retirees up to 5%.  This was made possible thanks to a State law that was signed by former Governor Charlie Baker last year.  In October 2022, Mayor Sarno had previously sponsored an order that was approved by the City Council to increase the COLA for city retirees to 3%.  On November 16, 2022, Governor Baker signed into law, Chapter 269 of the Acts of 2022, which provides a local option to increase the COLA to up to 5%.

Mayor Sarno states, “Building off the previous 3% COLA increase I sponsored last year for our city retirees/seniors, I want to thank former Governor Baker and our Springfield Retirement Board for approving this additional COLA increase of 2%.  This will now bring the total COLA increase for our city retirees to 5%.  Thanks to our sound and prudent fiscal management, and with the unprecedented times of a 40 year high in inflation and a looming recession, it is imperative that we assist our city retirees/seniors, ‘to help make ends meet’.  Simply put, this is the right thing to do as I do not want our city retirees/seniors to have to make the difficult decisions whether to get their medicine and/or put food on the table.”

The second order will request that the City Council approves a transfer of $15 million from the certified free cash account into the Springfield Pension Reserve Fund.  This transfer, if approved, would bring the total amount in the Pension Reserve Fund to approximately $17 million.  CAFO Plante and Treasurer/Collector Lonergan, who continue to monitor the interest rates of US Treasury Notes (which currently sit at around 4.873%), will seek to invest these monies into 1-year US Treasury Notes.  The approximate rate of return from investing the $17 million from the Pension Reserve Fund, based on an interest rate of 4.873%, would yield an estimated $769,000.

The third order Mayor Sarno will sponsor for the City Council to approve, is a transfer of $6.7 million from the certified free cash account into the Springfield OPEB Trust.  This transfer, if approved, would bring the total amount in the OPEB Trust to approximately $13 million.  CAFO Plante and Treasure/Collector Lonergan, again, will continue to monitor the interest rates of 1-year US Treasury Notes to invest in.  The approximate rate of return from investing the $13 million from the OPEB Trust, based on an interest rate of 4.873%, would yield an estimated $590,000.

The estimated total Return on Investment (ROI) from both investment strategies (Order 2 and 3) would yield approximately $1.35 million.

Mayor Sarno states, “Since taking office, one of my administration main focus and priorities continues to be practicing sound fiscal management policies that have brought us back from the brink of bankruptcy to having the highest bond rating in the city’s history, with a healthy reserve that prepares us for any unforeseen emergencies.  This is a safe and prudent plan that we have researched and been working on for some time and allows us to take advantage of innovative investment strategies when they present themselves.  Once again, as we have done with investing approximately $45 million from our stabilization reserve account to yield over $2 million so we can continue to provide tax relief initiatives and programs for residents.  I will again, ask the City Council to approve two sound financial orders that will help boost both our Pension Reserve Fund and the OPEB account with an approximate total return on investment of over $1.35 million.”

“With interest rates as high as they are, now is the time to take advantage and advance this beneficial and innovative investment strategy for our city retirees/seniors,” Mayor Sarno continued.  “Springfield is believed to be the first community in the Commonwealth to utilize this unique approach.  I want to thank City Councilors Attorney Michael Fenton, Tim Allen and Maria Perez for working with my administration on this innovative plan.  I also want to thank my award-winning finance team, led by CAFO TJ Plante, Treasurer/Collector Stephen Lonergan and Comptroller Patrick Burns for their continued efforts and monitoring these interest rates so that we can strike while they are hot.” 

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Page last updated:  Tuesday, March 1, 2022 01:32 pm