Holyoke leadership to consider major overhaul of city’s financial management

HOLYOKE — A new 20-page plan to improve how Holyoke handles its money will be in front of the City Council tonight.

The Municipal Finance Modernization Act aims to make changes to city ordinances and its charter to improve efficiency and accountability to avoid financial mismanagement.

The proposal was discussed in a board subcommittee on April 7.

If the council approves the plan, Holyoke will not spend more money than it earns in 2026 and will save over $100,000 in 2027, according to Mayor Joshua A. Garcia and City Treasurer Rory Casey.

The goal is for the council to act in time for the budget that will be presented to the council in May and voted on in June, so the city can start implementing changes on July 1, Casey and Garcia said.

The act aims to use fewer contractors to make sure year-end reports, and state and federal documents are filed on time. It also aims to improve accountability, add more oversight, increase auditing and enforce stricter penalties for not following rules.

The act will reorganize some departments, change important job titles and fix decades of audit issues. It also aims to improve how work gets done and provide better service to the people of Holyoke.

Audits

Casey and Garcia said the act centralizes Holyoke’s financial operations, which the state Department of Revenue’s Division of Local Services and outside auditors have long recommended.

In an interview Thursday, Casey said auditors have reviewed the city’s finances four times over the past 20 years. They met with staff from different administrations, past City Councils and various officials, and always concluded the same thing: It needed a centralized financial department.

“That’s been their recommendation since at least 2008,” Casey said.

Garcia said past audits show the city’s treasurer’s office has caused many of its major problems.

Garcia and Casey, the fourth elected treasurer in the past 10 years, supported a special election in January that changed the city treasurer’s position from being elected to appointed for better oversight.

The change that was supported by voters and the full City Council, amd reduces the risk of frequent turnover because of elections, which also disrupted long-term financial planning and stability.

In an interview Thursday, Garcia said he is excited about having a unified financial department, and hiring a skilled chief administrative and financial officer.

“Each function of government, like education, public safety or infrastructure, depends on a core functioning government and the internal controls that’s responsible for managing the resources,” Garcia said.

The chief administrator would manage a 14-member finance team, handle financial forecasting, keep up a capital improvement plan and advise leaders, leading to long-term savings and efficiency.

The current system

Other examples of money being wasted stem from poor policies and procedures, which having a central system could resolve.

“Let’s say we don’t pay a bill on time. We’re charged a late fee or interest,” Casey said.

There are also problems with money coming in, Casey said.

If the city receives a grant or funding for projects, and it’s not being properly tracked, what can end up happening — and has happened in the past — is that the city overspent, he said.

“Maybe it’s a reimbursable grant, and we needed to submit paperwork before a certain deadline, but we didn’t. So now we’re not going to get reimbursed,” he said.

While he said these are just some small problems, when added together, it becomes a budgeting issue.

Grants help make parks nicer, fix streets, improve buildings and support economic growth. But if the city keeps worrying about unpaid bills or grant deficits, it won’t be able to make progress, he said.

Reorganization saves money

Casey said the city has fixed some problems identified by the audits by updating its financial system, which hadn’t been done in nearly 30 years. This has improved the workflow in the treasurer’s office and reduced spending on paper and ink.

“Essentially, it is like the city was still using Windows 95 today,” he said. “We used to buy specialized check stock to print about 1,000 checks every payroll. We don’t do that anymore.”

This small change in the treasurer’s office is an instant $10,000 in annual savings, he said.

“Not only have we saved money, but it’s better for the staff. They have more access and can enter their time more efficiently. We’re able to keep track of employees’ time better, ensure they are working the right hours, and accurately accrue vacation and sick time,” Casey said.

These are the types of things that are important to taxpayers, because it ensures their money is spent wisely, he said.

Reduced contract services

Another change the act would bring is to reduce the number of contracted services by hiring a technical support director.

Instead of bringing in expensive consultants or software firms, charging $150 to $250 an hour, the city wants to reorganize staff to have someone within the city to train and help employees, Casey said.

A reduction in contracted services means over $100,000 in savings in fiscal 2027, but it could be more. “We want to be realistic,” he said.

There are 20 budgeted financial positions across all departments. If the act passes, the city will reduce the number to 18, Casey said.

It’s going to be budget neutral in year one, and by year two, the city should start seeing budgetary savings. By year three, the city could see savings of over $200,000, he said.

“Those are real numbers, not just hopes,” he said.

At minimum

Garcia said he plans to create a budget that includes the changes for the July 1 start date. However, the City Council might not agree with all the proposed changes, but the draft can be adjusted.

At minimum, Garcia said he needs to combine the treasurer and collector’s offices, and get support for the chief administrative financial officer post and to hire the comptroller.

“Some changes may require a petition to the (Legislature), which also takes additional time. There’s significant legwork ahead, but we have finally packaged the proposal in a document for the council’s scrutiny,” Garcia said.

It’s important to keep things running smoothly, so the city doesn’t fall behind when a new mayor eventually takes office, he said.