Framingham Chief Financial Officer Resigns

Here is the memo City Councilors received. It is odd that it is undated. Nonetheless it is another sign of trouble on the financial front for Framingham.

I had noted in a recent article the financial chaos in the December 7 City Council meeting. That gives some insight into this departure:

https://framinghamobserver.substack.com/p/framingham-financial-chaos-threatens

In the above article I wrote:

“I wonder how long the CFO will last in a city where the City Council is a such a financial millstone around her neck?”

We now have the answer.

Framingham is in substantial financial difficulty, which is being hidden by the Mayor and the City Council Finance Subcommittee, and remains unreported by the Strategic Initiative and Financial Oversight Committee (SIFOC). The City Council has taken an extremist financial position for 6 years, in which it has set annual property tax increases substantially below inflation increases.

The result has been that the city treasury has been drained of $40 million/year, as shown in this chart:

That has eroded the city financial position to such a degree that city staff compensation is highly uncompetitive, staff are departing, job vacancies remain unfilled, and capital for repairing roads, replacing school roofs, and maintained the water & sewer system has been so depleted that a huge $400 million backlog of infrastructure maintenance has developed: $100 in road repairs, $100 million in needed school roof replacements and an estimated $200 million in water & sewer deferred maintenance.

Further, the city has diverted $10 million/year in state Chapter 70 education aid to replace school roofs instead of supporting the education needs of its intended targets: low-income, special needs and non-English speaking students.

In July, 2022, Moody’s Investors Service downgraded the city’s bond rating by adding ‘negative outlook’ to its basic Aa2 assignment. See:

https://www.framinghamma.gov/DocumentCenter/View/47447/11-Jul-2022-Moodys-Rating-PDF?bidId=

Moody’s further noted:

“The negative outlook reflects the recent decline in the financial position due to a greater use of reserves and limited property tax revenue increases that have resulted in a structural operating imbalance.”

Moody’s was calling out the property tax revenue the city loses each year by taxing below the levy limit increase allowed by Proposition 2 ½. These losses are shown in the chart above. Moody’s also called out the fact that free cash is at its lowest level in 10 years: $6 million, down from a high of $16 million in 2017.

The financial position of the city, which Louise Miller inherited when she became Framingham's Chief Financial Officer in January, 2022, was extremely poor. She worked to improve things as much as any human could, but it is impossible to right Framingham's financial ship without major changes in the property tax extremism of the City Council.

Louise did an excellent job in Wayland, where she was their Town Administrator, and no doubt she will find success elsewhere, as she is a competent financial professional.

In the meantime, the Framingham City Council should reflect on the fact that all of their criticisms of Louise Miller and the financial staff of the city administration are completely unjustified, as the City Council, and especially its Finance Subcommittee under the leadership of George King & Mike Cannon, enthusiastically supported by John Stefanini, has created a financial crisis in the city.