Home 
Advocacy Letters to State Leaders MMA letter to House Ways and Means Committee regarding municipal relief bill
The Honorable Charles Murphy, Chairman
House Committee on Ways and Means
State House, Boston
Re: Municipal Relief Bill, H. 4526
Dear Chairman Murphy,
On behalf of the cities and towns of the Commonwealth, the Massachusetts Municipal Association wishes to express its support of the provisions offered in H. 4526, An Act Relative to Municipal Relief, which would provide municipalities with new areas of opportunity and flexibility to help balance local budgets and operate more effectively. The MMA greatly appreciates the leadership of you and your colleagues – specifically, Representative Paul Donato, Senator Stan Rosenberg, and Senator James Eldridge – for their leadership and their hard work, as exhibited by the comprehensive bill before your committee today.
As you know, the MMA was involved in the drafting of this important package, beginning with the work of the Special Commission on Municipal Relief and with the Joint Committee on Municipalities and Regional Government. Many of the commission’s recommendations are offered as part of H. 4526. In addition, several new proposals are part of this package, including a new municipal early retirement program, which the MMA is pleased to support. The MMA supports all of the provisions before your committee, and would like to take this opportunity to highlight the major aspects of the relief package. Before doing so, the MMA wishes to stress that time is of the essence in passing these reform measures, as many of these provisions must still be approved by cities and towns, many of whom will do so during the spring Town Meeting season.
Pension Repayment Schedule Extension
The MMA supports Section 29 of the bill that proposes a 10-year extension of the pension repayment schedule, from 2030 to 2040, to help amortize unprecedented asset losses experienced during the previous two years. Without an extension, scores of cities and towns will face massive pension cost increases in fiscal 2011 to make up for the losses. This carefully drafted provision, like the Governor’s original proposal, sets forth several conditions that must be satisfied in order to qualify for the extension: the retirement system would have to do an actuarial valuation as of January 1, 2010; any new schedule would have to appropriate an amount at least as high as the previous funding schedule called for in fiscal 2011; the amortization component of the funding schedule would be decreased from 4.5 percent ascending to 4 percent ascending; and appropriations for the new 2040 funding schedule could not be reduced in any year from the previous year.
Early Retirement Program
The MMA supports Section 25 of the bill, which creates an optional municipal early retirement program, requiring both executive and legislative approval. Under the tightly targeted program, the municipal executive would be required to limit the total number of eligible municipal employees and would have the authority to determine which employees are eligible. Eligible employees would receive a total of three years of age or creditable service toward retirement. They would have to forego any right to accrued vacation or sick time. The chief executive officer would be limited to replacing 30 percent of the salary and benefits of retirees in fiscal 2011, 45 percent in fiscal 2012, and 60 percent in fiscal 2013.
Mutual Aid
The MMA supports the following public safety-minded mutual aid provisions offered in H. 4526 that would allow cities and towns to more effectively and efficiently share resources, thereby reducing the costs associated with emergency response and daily maintenance activities while ensuring the highest level of service delivery:
1) Section 44, Statewide Public Works Mutual Aid Program: This section establishes a local-option statewide public works mutual assistance program to serve as a network of cities and towns that assist one another on day-to-day maintenance and repair operations through partnering agreements and a protocol for requesting and receiving aid. It is worth noting that the Executive Office of Public Safety and Security, the Department of Public Safety, the Massachusetts Highway Association and the New England Chapter of the American Public Works Association support said section.
2) Section 43, Statewide Emergency Mutual Aid Program: This section establishes a local-option statewide comprehensive mutual aid program for emergency situations that covers all municipal sectors, including, but not limited to, public safety, public health, public works, and emergency medical technicians. The MMA is pleased to join the Executive Office of Public Safety and Security in support of said section.
Procurement
The MMA supports the following procurement reforms offered in H. 4526 that would provide immediate savings at the local level while also reducing administrative burdens:
1) Section 22, Cooperative Purchasing: This section would amend M.G.L. Ch. 30B, the state’s Uniform Procurement Act, to authorize cities, towns and school districts to participate in cooperative purchasing agreements with public agencies outside Massachusetts. It is worth noting that both the Inspector General’s Office and the Massachusetts Association of School Building Officials support said amendment.
Current procurement law in Massachusetts restricts a municipality from accessing another municipality’s competitively solicited contract if the purchase is in excess of $25,000 annually for goods and supplies, unless the solicitation was conducted by a municipality within the Commonwealth or by the Commonwealth itself. In 48 other states, municipalities are joining together to cooperatively purchase from competitively solicited contracts made available by other municipalities within and outside each state. These contracts are typically offered through regional and national cooperative purchasing organizations. The ability of municipalities to combine the purchasing power of thousands of municipalities ensures significant cost savings for goods and supplies. Moreover, a municipality’s ability to piggyback off a competitively solicited contract saves the time and staff resources of going out to bid.
2) Section 111, Payment Bond Threshold: This section would upwardly adjust the threshold that requires a payment bond for public construction projects to $25,000. Currently a payment bond equal to 50 percent of the contract price is required for all public building and public works repair and construction contracts greater than $2,000 for municipalities and $5,000 for the state. Accordingly, small public building repair jobs, such as roof repairs and painting, which are well below the $25,000 sealed bid procurement threshold, nevertheless require a payment bond. Consequently, small building repairs are often delayed and sometimes postponed indefinitely, because contractors that are interested in small jobs do not otherwise need, want or qualify for bonding.
In 2001, the Inspector General realized that the current payment bond thresholds were antiquated, and he proposed that it be increased to as much as $50,000 (see I.G.O. Procurement Bulletin, Vol. 7, No. 1, March 2001). Deferring small public building and public works projects because of the lack of interested contractors is not in the public interest. Otherwise interested and qualified contractors without bonding capacity must be able to do small jobs, or those jobs may not be done in time to prevent more costly repairs or injury.
The MMA deeply appreciates the opportunity to participate in the deliberations resulting in the package before you today. Across the Commonwealth, municipal leaders look forward to the package’s swift passage so that they have the ability to utilize the tools, resources and efficiencies provided therein as they navigate this difficult local budget season.
Thank you very much.
Sincerely,
Geoffrey C. Beckwith
Executive Director
cc: The Honorable Barbara L’Italien, Vice Chair, House Committee on Ways and Means
The Honorable Stephen Kulik, Assistant Vice Chair, House Committee on Ways and Means
Advocacy Letters to State Leaders MMA letter to House Ways and Means Committee regarding municipal relief bill
MMA letter to House Ways and Means Committee regarding municipal relief bill
The Honorable Charles Murphy, Chairman
House Committee on Ways and Means
State House, Boston
Re: Municipal Relief Bill, H. 4526
Dear Chairman Murphy,
On behalf of the cities and towns of the Commonwealth, the Massachusetts Municipal Association wishes to express its support of the provisions offered in H. 4526, An Act Relative to Municipal Relief, which would provide municipalities with new areas of opportunity and flexibility to help balance local budgets and operate more effectively. The MMA greatly appreciates the leadership of you and your colleagues – specifically, Representative Paul Donato, Senator Stan Rosenberg, and Senator James Eldridge – for their leadership and their hard work, as exhibited by the comprehensive bill before your committee today.
As you know, the MMA was involved in the drafting of this important package, beginning with the work of the Special Commission on Municipal Relief and with the Joint Committee on Municipalities and Regional Government. Many of the commission’s recommendations are offered as part of H. 4526. In addition, several new proposals are part of this package, including a new municipal early retirement program, which the MMA is pleased to support. The MMA supports all of the provisions before your committee, and would like to take this opportunity to highlight the major aspects of the relief package. Before doing so, the MMA wishes to stress that time is of the essence in passing these reform measures, as many of these provisions must still be approved by cities and towns, many of whom will do so during the spring Town Meeting season.
Pension Repayment Schedule Extension
The MMA supports Section 29 of the bill that proposes a 10-year extension of the pension repayment schedule, from 2030 to 2040, to help amortize unprecedented asset losses experienced during the previous two years. Without an extension, scores of cities and towns will face massive pension cost increases in fiscal 2011 to make up for the losses. This carefully drafted provision, like the Governor’s original proposal, sets forth several conditions that must be satisfied in order to qualify for the extension: the retirement system would have to do an actuarial valuation as of January 1, 2010; any new schedule would have to appropriate an amount at least as high as the previous funding schedule called for in fiscal 2011; the amortization component of the funding schedule would be decreased from 4.5 percent ascending to 4 percent ascending; and appropriations for the new 2040 funding schedule could not be reduced in any year from the previous year.
Early Retirement Program
The MMA supports Section 25 of the bill, which creates an optional municipal early retirement program, requiring both executive and legislative approval. Under the tightly targeted program, the municipal executive would be required to limit the total number of eligible municipal employees and would have the authority to determine which employees are eligible. Eligible employees would receive a total of three years of age or creditable service toward retirement. They would have to forego any right to accrued vacation or sick time. The chief executive officer would be limited to replacing 30 percent of the salary and benefits of retirees in fiscal 2011, 45 percent in fiscal 2012, and 60 percent in fiscal 2013.
Mutual Aid
The MMA supports the following public safety-minded mutual aid provisions offered in H. 4526 that would allow cities and towns to more effectively and efficiently share resources, thereby reducing the costs associated with emergency response and daily maintenance activities while ensuring the highest level of service delivery:
1) Section 44, Statewide Public Works Mutual Aid Program: This section establishes a local-option statewide public works mutual assistance program to serve as a network of cities and towns that assist one another on day-to-day maintenance and repair operations through partnering agreements and a protocol for requesting and receiving aid. It is worth noting that the Executive Office of Public Safety and Security, the Department of Public Safety, the Massachusetts Highway Association and the New England Chapter of the American Public Works Association support said section.
2) Section 43, Statewide Emergency Mutual Aid Program: This section establishes a local-option statewide comprehensive mutual aid program for emergency situations that covers all municipal sectors, including, but not limited to, public safety, public health, public works, and emergency medical technicians. The MMA is pleased to join the Executive Office of Public Safety and Security in support of said section.
Procurement
The MMA supports the following procurement reforms offered in H. 4526 that would provide immediate savings at the local level while also reducing administrative burdens:
1) Section 22, Cooperative Purchasing: This section would amend M.G.L. Ch. 30B, the state’s Uniform Procurement Act, to authorize cities, towns and school districts to participate in cooperative purchasing agreements with public agencies outside Massachusetts. It is worth noting that both the Inspector General’s Office and the Massachusetts Association of School Building Officials support said amendment.
Current procurement law in Massachusetts restricts a municipality from accessing another municipality’s competitively solicited contract if the purchase is in excess of $25,000 annually for goods and supplies, unless the solicitation was conducted by a municipality within the Commonwealth or by the Commonwealth itself. In 48 other states, municipalities are joining together to cooperatively purchase from competitively solicited contracts made available by other municipalities within and outside each state. These contracts are typically offered through regional and national cooperative purchasing organizations. The ability of municipalities to combine the purchasing power of thousands of municipalities ensures significant cost savings for goods and supplies. Moreover, a municipality’s ability to piggyback off a competitively solicited contract saves the time and staff resources of going out to bid.
2) Section 111, Payment Bond Threshold: This section would upwardly adjust the threshold that requires a payment bond for public construction projects to $25,000. Currently a payment bond equal to 50 percent of the contract price is required for all public building and public works repair and construction contracts greater than $2,000 for municipalities and $5,000 for the state. Accordingly, small public building repair jobs, such as roof repairs and painting, which are well below the $25,000 sealed bid procurement threshold, nevertheless require a payment bond. Consequently, small building repairs are often delayed and sometimes postponed indefinitely, because contractors that are interested in small jobs do not otherwise need, want or qualify for bonding.
In 2001, the Inspector General realized that the current payment bond thresholds were antiquated, and he proposed that it be increased to as much as $50,000 (see I.G.O. Procurement Bulletin, Vol. 7, No. 1, March 2001). Deferring small public building and public works projects because of the lack of interested contractors is not in the public interest. Otherwise interested and qualified contractors without bonding capacity must be able to do small jobs, or those jobs may not be done in time to prevent more costly repairs or injury.
The MMA deeply appreciates the opportunity to participate in the deliberations resulting in the package before you today. Across the Commonwealth, municipal leaders look forward to the package’s swift passage so that they have the ability to utilize the tools, resources and efficiencies provided therein as they navigate this difficult local budget season.
Thank you very much.
Sincerely,
Geoffrey C. Beckwith
Executive Director
cc: The Honorable Barbara L’Italien, Vice Chair, House Committee on Ways and Means
The Honorable Stephen Kulik, Assistant Vice Chair, House Committee on Ways and Means
