[Adopted FCB 3-10-2009 (Title 4, Ch. 4.42, of the 1986 Code)]
A. 
There shall be established in the City of Springfield a stabilization reserve fund pursuant to MGL c. 40, § 5B, to be known as the "Productivity Bank." This Productivity Bank shall be used to provide loans to Springfield City departments that can justify projects and/or initiatives that will generate additional revenues above current certified levels, and/or will generate savings and/or which will significantly improve the efficiency of service delivery.
B. 
The Productivity Bank shall be managed by the Chief Administrative and Financial Office of the City of Springfield and will be staffed by that office and other City staff as determined appropriate by the Chief Administrative and Financial Officer. The Chief Administrative and Financial Officer shall be the custodian of the Productivity Bank.
A. 
Requests for loans from the Productivity Bank shall be reviewed and considered for approval by a Bank Loan Committee. Approval of an application for a loan and issuance of a loan shall require a majority vote of all then-existing members of the Bank Loan Committee, except as otherwise provided herein. The Bank Loan Committee shall consist of seven members as follows, none of whom shall be an employee of the Office of Internal Audit:
(1) 
The Mayor or his or her designee.
(2) 
The President of the City Council or his or her designee.
(3) 
The Chief Administrative and Financial Officer or his or her designee, who shall serve as the Bank Loan Committee Chair.
(4) 
The Budget Director or his or her designee.
(5) 
The Comptroller or his or her designee.
(6) 
One member of the public, not an elected official in the City of Springfield and not appointed or employed by the City of Springfield or Springfield School Department, with substantial experience in banking and commercial lending, and who is appointed by the Mayor with the approval of the City Council as set forth herein.
(7) 
One member of the public, not an elected official in the City of Springfield and not appointed or employed by the City of Springfield or Springfield School Department, with substantial experience in project finance, and who is appointed by the Mayor, with the approval of the City Council as set forth herein.
B. 
Approval of members of the public. The Mayor shall transmit to the City Council, for a ten-day period of review, the nomination of the two public members of the Bank Loan Committee. The City Council shall be deemed to have approved the nomination if, during said ten-day period, no member objects to the nomination by filing with the City Clerk a letter objecting to the appointment setting forth specific reasons for his or her objections. If a member files a letter objecting to the appointment within the initial ten-day period, the City Council shall have an additional 10 days to vote to approve or disapprove of the nomination, or it will be deemed approved. In the event that any member(s) of the City Council timely files a letter objecting to any appointment and the City Council timely disapproves of any nomination, the Mayor shall transmit to the City Council, within 10 days, the name of a substitute public member nominee, subject to the same process set forth herein.
C. 
The public members of the Bank Loan Committee may be removed without cause by the Mayor upon written notice.
D. 
The public member appointed pursuant to Subsection A(6) shall serve a term of three years, and the public member appointed pursuant to Subsection A(7) shall serve an initial term of two years, with all subsequent terms being three years such that the terms of the public members are staggered. Upon the vacancy of a public member so appointed, the Mayor shall within 10 days thereafter make another appointment, with the approval of the City Council as set forth herein, for the remainder of the unexpired term for said membership.
E. 
The Bank Loan Committee shall meet no less than two times per year.
F. 
The Bank Loan Committee shall be subject to the Massachusetts Open Meetings Law, as it is amended from time to time.
A. 
The maximum term of any Productivity Bank loan shall be determined by the Bank Loan Committee, and in no event shall said loan term exceed five years. The Bank Loan Committee shall determine the applicable interest rate for any Productivity Bank loan, provided that the minimum interest rate shall be no less than 5% per annum. The Bank Loan Committee shall determine the applicable penalties and additional charges for the failure to repay Productivity Bank loans in a timely manner. All projects and initiatives financed, in whole or in part, by said loans shall be projected to produce sufficient savings and/or new revenue and/or efficiency improvements to enable the Productivity Bank loan recipient to fully repay said loan within the applicable loan term, plus accrued interest, penalties and charges.
B. 
As determined by the Chief Administrative and Financial Officer, loans from the Productivity Bank may be expended directly from the Productivity Bank's funds by the City department that receives a loan, or the loan proceeds may be transferred to the budget of the City department receiving a Productivity Bank loan.
C. 
Loans shall be repaid over the term of the loan on a schedule established by the Bank Loan Committee. To the extent permitted by law, loan repayments, plus accrued interest, penalties, and charges, shall be appropriated in the budget of the department receiving the loan based upon the terms of the applicable loan repayment schedule. The following shall apply:
(1) 
Loans whose projects and/or initiatives produce additional revenue. Loans made to finance projects and/or initiatives that produce additional revenue shall be repaid by dedicating 100% of new revenue generated by the project and/or initiative to repaying the loan; except that if new revenue in a year is greater than the loan repayment schedule for that year, revenue in excess of the repayment schedule amount shall be gain-shared in the following manner:
(a) 
First year of the loan: To the extent permitted by law, 50% of revenue in excess of the amount required to repay the loan shall be appropriated to the department that has been issued the loan. Said revenue may only be used to fund nonrecurring expenditures in that department. Of the remaining 50%, to the extent permitted by law, half shall be appropriated to the Productivity Bank and the remaining half shall accrue to the General Fund.
(b) 
Second year of the loan: To the extent permitted by law, 25% of revenue in excess of the amount required to repay the loan shall be appropriated to the department that has been issued the loan. Said revenue may only be used to fund nonrecurring expenditures in that department. Fifty percent of the revenue in excess of the amount required to repay the loan shall accrue to the General Fund. The remaining 25% shall be appropriated to the Productivity Bank to the extent permitted by law.
(c) 
Third year of the loan and thereafter: All revenue in excess of the amount required to repay the loan shall accrue to the General Fund.
(2) 
Loans whose projects and/or initiatives reduce costs. Loans made to finance projects and/or initiatives that reduce or avoid costs shall be repaid by dedicating 100% of the savings generated by this improvement to repaying the loan; except that if savings are greater than the loan repayment schedule, savings in excess of the repayment schedule amount shall be gain-shared in the following manner:
(a) 
First year of the loan: To the extent permitted by law, 50% of the savings in excess of the amount required to repay the loan shall be appropriated to the department that has been issued the loan. Said savings may only be used to fund nonrecurring expenditures in that department. Of the remaining 50%, to the extent permitted by law, half shall be appropriated to the Productivity Bank and the remaining half shall accrue to the General Fund.
(b) 
Second year of the loan: To the extent permitted by law, 25% of savings in excess of the amount required to repay the loan shall be appropriated to the department that has been issued the loan. Said savings may only be used to fund nonrecurring expenditures in that department. Fifty percent of the savings in excess of the amount required to repay the loan shall accrue to the General Fund. The remaining 25% shall be appropriated to the Productivity Bank to the extent permitted by law.
(c) 
Third year of the loan and thereafter: All saving in excess of the amount required to repay the loan shall accrue to the General Fund
(3) 
Projects and/or initiatives that substantially increase the efficiency of service delivery. At any given time, the Productivity Bank may have outstanding no more than 20% of its authorized funding amount in loans that invest in projects and/or initiatives that only meet the requirements of this Subsection C(3) and do not also meet the requirements of Subsection C(1) or C(2). In reviewing such projects and/or initiatives, the Bank Loan Committee shall perform due diligence to determine whether services are likely to improve substantially and measurably without increasing costs. The justification for making such loans and the analysis of the resulting increase in efficiency shall be provided in writing by the applicant department to the City Council, with a copy to the Bank Loan Committee, no less than one week prior to the issuance of such a loan.
D. 
Nothing in this section shall be construed to require the City to dedicate or appropriate savings or revenue to any particular department or purpose unless said savings or revenue is the direct product of a project and/or initiative financed by the Productivity Bank.
E. 
In the event that the purpose(s) of any project and/or initiative financed by Productivity Bank loans can no longer be accomplished or there is a substantial likelihood that the loan amount cannot be repaid with interest within the applicable term, as determined by the Bank Loan Committee, the Bank Loan Committee may require that said recipient department immediately return any unexpended Productivity Bank loan amounts. Any such returned amounts shall be reduced from the recipient department's obligation to repay the corresponding Productivity Bank loan.
A. 
The Bank Loan Committee shall issue rules setting forth the criteria by which it shall evaluate loan applications. The Bank Loan Committee shall publish such rules no later than July 1, 2009. These rules may be amended from time to time in accordance with the criteria set forth herein. The Bank Loan Committee may create and furnish a form to applicant departments which shall be used in conjunction with a Productivity Bank loan application.
B. 
Loans may only be made for projects and/or initiatives that increase revenue and/or reduce costs and/or improve the efficiency of service delivery where said projects and/or initiatives cannot otherwise be funded from the City's capital budget or from a department's operating budget without negatively impacting normal service levels.
C. 
Applications submitted to the Bank Loan Committee shall include all information requested by the Bank Loan Committee, including but not limited to a description of the project and/or initiative that the loan will fund, itemized and detailed costs of the project and/or initiative (nonrecurring and recurring), all funding sources, the benefits the project and/or initiative will provide and how the project and/or initiative is intended to increase revenue and/or reduce costs and/or improve the efficiency of service delivery, an assessment of the project's and/or initiative's implementation risks and the likelihood of success, and any other information required by the Bank Loan Committee or the Productivity Bank staff. The applicant shall also demonstrate its ability to repay the loan with interest within the applicable term.
D. 
Productivity Bank staff will work with each applicant department to determine whether a project and/or initiative qualifies for a loan. An application for a Productivity Bank loan may proceed to the Bank Loan Committee only after the Productivity Bank staff has determined that an application is complete and ready for its review and consideration. A majority vote of all then-existing members of the Bank Loan Committee is required for approval of a Productivity Bank loan.
E. 
Loans shall be made by the Bank Loan Committee based on quantitative measures, which shall at a minimum include a demonstrated ability to produce additional revenue and/or reduce costs and/or substantially increase the efficiency of service delivery. Qualitative measures regarding the relative merits of projects and/or initiatives may be used to break a tie in the ranking of projects and/or initiatives.
F. 
The Bank Loan Committee shall use funds from loan repayments, interest payments on loans, interest earnings on proceeds in the Productivity Bank stabilization reserve fund, penalties and charges on loans, and gain-sharing funds to make loans for other qualifying projects and initiatives.
G. 
All funds awarded shall be subject to audit by the Bank Loan Committee and the Office of Internal Audit, or their successors in interest.
H. 
The Bank Loan Committee shall require a department to execute an agreement or a memorandum of understanding, containing the repayment terms and all other pertinent provisions, as a condition of awarding a Productivity Bank loan. In no instance shall any Productivity Bank loan proceeds be disbursed or expended without a fully signed agreement or memorandum of understanding being in effect.
A. 
Staff of the Productivity Bank shall monitor and report on the progress of each project and initiative made by the Productivity Bank to ensure that the Productivity Bank will be repaid all outstanding loans plus accrued interest, penalties and charges, that the City is deriving the benefits originally projected for the project and/or initiative, and that the loan amounts are being used in accordance with the underlying purpose(s) of the project and/or initiative. The recipient department shall provide periodic updates on project and/or initiative implementation to the Productivity Bank staff as requested.
B. 
No later than December 30 of each year, the Bank Loan Committee shall issue a report of the Productivity Bank, the status of all loans made from Productivity Bank funds, and the financial and operating performance of the projects and initiatives financed by the Productivity Bank.
C. 
All recipient departments shall provide the Bank Loan Committee and Productivity Bank staff with all information required or requested for evaluating the performance of any project or initiative financed by a Productivity Bank loan.