Municipal Relief Commission Takes a Pass

The so called Municipal Relief Commission has issued its report, and after nine months or so of work it has managed, in the area of health care, to actually recommend a system that will take us backwards from the point we are at now. I have attached the report, as well as the prospective legislation that is to be filed as a consequence of the Committee report. I have also attached the MMA Letter opposing the Commissions proposals on municipal health care. The Commission advocated for some additional revenues for localities, which is needed. But even those proposals are convoluted and bureacratic, and very conveniently come after the House took a tax vote that many members stated was the only tax vote they wished to take in this cycle.

The health care proposal, in an effort to satisfy every constituency at the table, produces a system that would take six months to implement, that will lead to arguments about the production of cost benchmarks, that will lead to penalties against taxpayers where agreement cannot be reached with municipal unions, and also brings back a form of binding arbitration. There are so many flaws in this monstrosity that it should be given a hearing, and buried immediately to save all those involved the embarassment of defending it. There are hearings scheduled for today, and a second set of hearings scheduled for Hudson. Many mayors and local officials will attend and point out the obvious. It will not likely do much good. The Committee chairs were Senator Stan Rosenberg and Rep. Paul Donato.

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Posted in Methuen, Municipal Finance, State News | Tagged , | 1 Comment

Quinn Bill Editorial

The Quinn Bill has been the subject of much discussion lately, and generated some interesting comments at my first post. The Tribune wrote a Sunday editorial supporting the position that localities should not be stuck with Quinn Bill costs if the State defunds its portion through the budget process. Obviously I agree with that, but the editorial also contained some other food for thought that should be considered.

The Tribune has a stated opposition to the Quinn Bill itself, and favors abolition. In spite of that they sensibly call for a phase out of benefits, rather than an abrupt termination. A phase out has many attractive features, including fundamental fairness to current police officers working on the basis of existing pay scales, and fundamental fairness to municipalities, who will have additional time to try to incorporate new fiscal reality into their collective bargaining agreements.

Senator Baddour, in his comments, accurately states that no community had to accept the Quinn Bill or place Quinn guarantees in collective bargaining agreements. I agree. But as the Tribune points out that is less important than how we collectively extricate ourselves from the financial straightjacket that has the potential to cripple service delivery at the local level. There are many provisions that exist in collective bargaining agreements, locally and at the state level, that will need to be changed due to the fiscal meltdown we are experiencing. And I realize that striking collective bargaining provisions is a serious business. That is why, in the case of Quinn, I argue for a one year moratorium only, with that one year exemption only applying to the state portion that may be unfunded by the Legislature. And that is why the editorials approach of a phased in solution makes the most sense.

As far as the Legislature goes I recognize that they have some pretty tough choices to make. I will disagree with those choices if I think that our community will not be well served by their actions, but it is not my intent to downplay the serious nature of the problems they face. They have been responsive to me as well as the City, and even if we disagree from time to time I do respect them. (Especially the great and powerful Senate Chair of Ways and Means Steve Panagiotakos).

Read the Tribune editorial here.

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Cheney Tosses Colin Powell

Former Vice President Dick Cheney continues to beat the drum against the new Administration, as well as against those with whom he has had long standing grievances, Today he launched on Colin Powell, expressing the thought that Powell was no longer a Republican, and that Rush Limbaugh’s conservative bona fides made him preferable to Powell. From Politico:

“Well if I had to choose in terms of being a Republican, I’d go with Rush Limbaugh,” Cheney told moderator Bob Schieffer. “My take on it was Colin had already left the party — I didn’t know he was still a Republican.”

A somewhat taken-aback Schieffer asked: “You think he’s not a Republican?”

Cheney responded by pointing out that Powell had endorsed President Barack Obama last fall.

“I assume that that’s some indication of his loyalty and his interest,” Cheney said.

A little different than the Obama aproach with Joe Lieberman, wouldn’t you say? Cheney and Limbaugh are the gifts that keep giving. President Obama is very lucky to have these two still playing prominent roles in Republican politics.

http://c.brightcove.com/services/viewer/federated_f8/1155201977

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Happy Mothers Day!

Happy Mothers Day to all! The Beatles sing “Your Mother Should Know” from Magical Mystery Tour.

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President Obama at White House Correspondents Dinner

President Obama did his thing at the annual correspondents dinner, and I thought it was great stuff. He was funny, and poked fun at friend and foe alike. Joe Biden was a favorite target, along with Dick Cheney, Michael Steele, Hillary Clinton, and Rahm Emmanuel. I thought the joke about completing his second 100 days in 72, and then resting on the 73rd, would be quite funny to some of the posters here at this blog!

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Chrysler Lender Opposition Collapses

The organized lender opposition to Chrysler’s bankruptcy petition collapsed yesterday, paving the way for a quick restructuring for Chrysler, and a very fast exit from bankruptcy for the new company. The senior secured creditors had taken a legal hit with the bankruptcy court judge refusing to stop the sale of Chrysler assets to the “new Chrysler” controlled by Fiat and the UAW. Two of the larger creditors dropped out of the group, and the small size of the remainder made further legal fighting a very daunting task. It is an impressive win for the Obama Administration, and certainly has to sober up the creditor group over at G.M. The Obama Administration will get the major restructuring of the domestic auto business they have fought for. They now own the problem.

And for those that may remind me that I questioned whether Chrysler could get a bankruptcy done this quickly I say “guilty”. I did not expect the creditor group to be crushed as easily as they were. Wrong again! Below is the press release from one of the Chrysler senior secured lenders.

STAIRWAY CAPITAL MANAGEMENT L.P.
Official Press Release – 9:45am EDT – May 8, 2009

Subject – Chrysler

Stairway Capital Management (“Stairway”) has decided, after countless discussions with its investors, to actively withdraw from the Chrysler bankruptcy process.

We withdraw with the knowledge that we acted in good faith. We have fought for what we believe should be fair and equitable treatment under contract and bankruptcy law – in accordance with what traditionally occurs in a restructuring process. We remain steadfast in our view that there should be significantly more value attained, given a normal course bankruptcy negotiation. The fact simply is, however, our group has become too small to have a voice within the bankruptcy.

As American taxpayers, we appreciate the unprecedented efforts taken by the current Administration to stabilize the economy and the auto sector; but as fiduciaries to our investors we take exception to being compelled, as Chrysler senior secured lenders, to unfairly shoulder the burden relative to various junior creditors.

Finally, we would like to clarify some speculation about Stairway. We are not engaged in the business of underwriting or holding derivative contracts; we do not employ leverage in connection with our investments; and we have never been involved in the subprime mortgage market, at any level or context. Rather, Stairway is just a small private equity firm specializing in special situations and distressed debt opportunities.

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Summer Jobs Program

I had the opportunity to go to the Lawrence Community TV studio and shoot “Lawrence on the Move” with Mayor Michael Sullivan and Fred Carberry to discuss the Merrimack Valley Workforce Investment Board’s Summer Jobs Program. This program, run through the Valley Works Career Centers, brings together government, business, and young people seeking summer employment. Lawrence, Methuen, and Haverhill are all involved, and the hope is that we can create 1000 jobs this summer. If you would like additional information you can go directly to the Valley Works Career Center website, or call my office at 978-983-8505.

Lawrence on the Move TV Show

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President Obama’s Weekly Address

President Obama talking about financial matters, including bank stress test results, cutting 121 federal programs, and credit card legislation. He has received some major push back from Congress on the program to cut a very modest amount of money out of the budget by eliminating programs identified as not effective. Cutting programs apparently is not the forte of legislative bodies anywhere.

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Left Holding the Bag on the Quinn Bill

The State Legislature, as they contemplate major cuts in the budget, are considering totally cutting the financing for the “Quinn Bill”, which provides extra pay to police officers for education. This program has traditionally been paid for by the combination of State and Local funding (1/2 each), and it is legislation that was accepted by the City of Methuen many years ago. Throughout the Commonwealth contractual provisions have been added to police union contracts that effectively made cities responsible for the State’s portion if the state funding was removed. Methuen has that provision in its police contracts, which are all up on June 30th of this year. That provision predates my administration, and is the subject of a letter that I have sent to Senator Baddour. The essence of the letter is that as the state contemplates walking away from financing its share of the Quinn Bill it should remove any obligation, contractual or in ordinance, that would require cities to pay the State’s share of Quinn Bill benefits. I suggest, and strongly believe, that the same financial conditions that would justify the Commonwealth walking away from this financing obligation justify a one year suspension of any contractual obligation requiring cities to pick up the states share of this obligation.

There is obviously the question of the contract, and how the provision got in, and why it was not taken out. Without exploring all of the vagaries of contract law it is exceedingly difficult in municipal negotiations to get a provision out of a contract once it is in. And it certainly does cost. The rules are designed to protect what I like to call the “once in, never out” concept. These rules, naturally, are promulgated by the State.

At the municipal level all we are asking for is equity. The State, through the Quinn Bill, has made a commitment to finance half the benefit. Because of the steep financial crisis they may choose to walk away from that commitment. We have the same crisis, and the same daunting choices that the State faces. Why not give to us what you choose to give to yourself. I have attached the letter I sent to Senator Baddour below. Read the Tribune story at this link.

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Sara Payne Haden, Methuen’s WASP

Sarah Hayden receives a mayoral citation

Methuen’s own Sara Payne Haden was honored at the last Methuen City Council meeting for her service to our country as a member of the Women Airforce Service Pilots. Sara is 89 years of age, and is now one of 300 surviving WASP that may be honored with the nations highest civilian honor, the Congressional Gold Medal. From the Eagle Tribune:

There’s legislation in Congress that, if passed, will bestow the highest civilian honor on Methuen’s Sara Payne Hayden.

The 89-year-old city resident served in the 1940s as one of the 1,074 Women Airforce Service Pilots — known as WASP — the first female pilots in the U.S. military.

There are two bills in Congress — Senate Bill 614 and House Bill 2014 — that would give the Congressional Gold Medal to Hayden and the other 300 or so surviving WASP.

Sara is active in our city’s veterans groups, and she has been at every veterans parade that I have attended in Methuen since 1992. Congresswoman Tsongas has done a wonderful thing here, and it would be truly a deserving recognition of the great contribution made to America by this brave group of female aviators. Congratulations Sara! Read the Tribune article here.

Sara Payne Haden

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