Springfield will now govern itself as Gov. Deval Patrick last week announced an end to five years of state oversight.
Mayor Domenic Sarno and the City Council will now have control over finances, borrowing, and economic development. In its final act, the five-member finance control board on June 30 approved a $535 million fiscal 2010 budget to take affect July 1.
While Springfield can once again govern itself, it owes Massachusetts $52 million. Officials have pulled together a $46.8 million fund to repay the no-interest state loan over 15 years, with interest earned on that account financing educational scholarships for Springfield youth, according to Thomas Walsh, spokesman for Sarno. In addition, the city has another $34.6 million reserve fund.
The city has $340 million of outstanding general obligation debt and a $402.5 million unfunded pension liability. Standard & Poor’s on April 21 raised its GO debt to BBB-plus from BBB, citing improved liquidity and fiscal management. Moody’s Investors Service affirmed its Baa2 rating with a stable outlook.
The state took over in 2005 after the city incurred a $41 million deficit, forcing officials to shut off streetlights, slash public services, and implement layoffs.
Springfield is 90 miles west of Boston and has a population of 150,775.
