Building a Financially Sustainable Future: Lessons Learned From the CAFO of Springfield, Massachusetts

TJ Plante is the Chief Administrative and Financial Officer (CAFO) for the city of Springfield, Massachusetts, where he directly oversees the city’s financial functions and serves as the principal city management advisor to the Mayor. In 14 years of service to the city, he and his cohorts have overcome tremendous fiscal challenges, putting Springfield on the map for strong financial management. Read TJ's insights below and the lessons he learned along the way. 

Like many working cities across America, my city — the City of Springfield, Massachusetts — has endured a decades-long uphill battle to rebuild our economy and civic infrastructure. At its worst, Springfield was facing a $41 million deficit in 2004 and had fallen under the control of a state-imposed financial control board. 

But the tides began to turn in the latter half of the 2000s: We implemented a new financial management software program in the summer of 2007 and, in 2009, we deployed an automated workforce management system from UKG (formerly Kronos, prior to its merger with Ultimate Software) that allowed Springfield to centralize city and school payroll teams into a single payroll department serving all 6,300 city employees.

It was also around this time that Springfield elected former city council president Domenic J. Sarno to the mayor’s office — where he still serves following re-election in 2019. It was his vision for city leaders to embrace data as a change agent. With automated systems and data analytics providing real-time visibility into citywide spending, he believed we’d finally be able to address the workforce and payroll challenges plaguing our city. And he was right.

With UKG bringing data and trends to the surface, we were able to do more than correct and prevent financial neglect: we reigned in overtime costs, negotiated pivotal changes to contracts with labor unions, and became more efficient in deploying full- and part-time workers. 

In 2009, the financial control board returned control to local leaders. By then, we had gotten our financial house in order and many of the savings generated by Springfield’s technology investments and data-driven processes were being successfully reallocated to improve education, public safety, economic vitality, and our local neighborhoods. 
 

After a long period of doubt, we managed to generate $4.7 billion in economic development and are well on our way to reclaiming Springfield’s legacy as one of the most innovative cities in America.

Knowing that Springfield is not the first nor the last city to climb our way out of debt and build ourselves a fiscally sustainable future, here are three recommendations for city finance leaders looking to replicate Springfield’s success:

#1: Embrace digital transformation

Everything we have accomplished in Springfield — from the marquee achievements to the small yet meaningful projects that have bettered our communities — relied on this. Embracing digital transformation was the first step.

Prior to the implementation of our UKG workforce management system, we were trapped by a series of paper-based timesheets and punch cards and were using spreadsheets to track labor expenses. We knew that significant gaps, lapses, and abuses of the system were present, but we just didn’t know where or didn’t have the data to back up our questions.

Once deployed, however, our digital systems and data-based policies helped us find and reallocate millions of unmonitored funds in various city budgets, identify and correct many instances of timecard fraud and wasted labor hours, and uncover legacy processes that had resulted in the mismanagement of payroll deductions and retirement payouts. The impacts were rapid, meaningful, and widespread: 

• Total savings in salaries and overtime topped $900,000 within the first year of implementation
• Our fire department lowered its use of overtime by 11%
• The budget for substitute teachers decreased by more than $1 million, just as teacher and paraprofessional attendance rates improved

Not every administration wants to look closely at their labor data, but these kinds of insights and corrective actions were unthinkable with our previous paper-based processes. The fact is, you need systems to collect, store, track, and analyze city data. And once those systems are in place, you have to be ready to face the music and fix the issues.

#2: Commit to financial stewardship 

At the administration level, strong financial stewardship requires not only a roadmap for future capital spending but a cooperative environment that fosters teamwork and trust. In Springfield, the data-backed processes we implemented together continue to yield time and cost savings that enable us to take bold action in accordance with our capital improvement plan to reinvest in our communities and provide better services to residents. For instance, using just $50 million in city funds, we completed $350 million of direct improvements across a wide portfolio of commercial and residential projects.

While it is extremely important to root out waste, fraud, and abuse of taxpayer dollars and to restore citizens’ confidence in city government, it’s equally important to make good choices with those savings. As one example, in the aftermath of an EF-3 tornado that pummeled our city in 2011, FEMA awarded Springfield $25 million to replace two structures: one was being used as a community center and the other a storage facility. However, rather than using those funds to restore the damaged buildings to their former condition, we realized these FEMA dollars represented an opportunity to invest in our communities in ways we never previously had the financial means to do. 

With FEMA’s approval, we reallocated recovery funds towards projects in other locations that would far better serve our residents: a brand-new community center, senior center, expansion of an environmental education center, and renovations to a facility used by our police force.

#3: Invest in community programs, resources, and schools

The success of our reinvigorated finances and data-driven approach to managing our city’s workforce gave us new and remarkable latitude to invest in community-based programs and resources to improve the quality of life for our citizens, education for our children, and public safety. 

One of our greatest landmark achievements has been Springfield Schools’ districtwide rollout of the universal-free “Breakfast in the Classroom” program and subsequent opening of the Culinary Nutrition Center in 2019 (which has already generated a $1.3 million efficiency that is being reinvested into further improving school meals).

Investing in school meals for more than 30,000 students, we are getting more people to school, consistently and on time, which has reduced hunger and improved students’ temperament during the school day, making them more ready to learn. Whether directly or indirectly, there’s no doubt among city and school leadership that this investment in our students is improving academic outcomes.

In closing

Residents and businesses alike want to see financial stability and strength. They want to see clean, solid financials. They have every right to hold their local leaders accountable, so that when the hard times come — like when a global health crisis forces an economic shutdown impacting residents, businesses, and students, alike — together we are prepared to take the punch and keep moving forward. We’ve done that here in Springfield, accomplishing something together we can all be proud of.

Download the Springfield Resurgent eBook, authored by TJ Plante, Chief Administrative and Financial Officer for the City of Springfield, to learn more about how the city built a fiscally sustainable future.