City Finance Chief Chris Pile in the News

The city of Northampton was apparently wise to minimize its investment in the Massachusetts state pension fund, the Pension Reserves Investment Trust, or PRIT, this past year, a fund which suffered a loss of 29.5% in 2008.

The State House News Service reported the following:

"The best-performing fund in 2008 was the $60 million Northampton Retirement Board fund, which covers the benefits of 683 active public employees and 338 retirees. Its 19.3 percent loss in 2008 was the smallest in the state.

“We’ve done consistently well and that’s without doing some of the more risky investment types,” said Christopher Pile, city finance director and chair of the board. “We didn’t get into hedge fund or any of that kind of stuff.”

Pile said the board has about $2 million invested with PRIT, but wants to remain independent from the state fund. “We don’t feel any pressure to put any more in there obviously since the state pension fund did far worse than we did,” he said. “I think we’ll just stick with what we’re doing.”

Investments in cash and bonds helped insulate Northampton from losses that other funds took in riskier categories, such as emerging markets and international equities, but the local fund is moving back towards stocks again. Pile credited the advice of the DeBurlo Group, a fund consultant that also advised Malden retirement officials."

Springfield's Spiraling Poverty

Two great essays appeared this week on the subject of Springfield, Massachusetts, and the descent of its inner neighborhoods into poverty.

Poor Springfield, written by the Springfield Intruder's Bill Dusty, cites compelling Brookings Institution statistics on the state of the city's South End, and reports on controversy surrounding a plan by WinnDevelopment to develop more low-income housing in a neighborhood that is already tanking fast. Dusty writes:

"In Springfield’s South End - a prime breeding ground for the kind of despair that grips much if the city - the neighborhood suffers under the burden of a 50% poverty rate. Things are about to get worse, too, as the former Longhill Gardens site will be bringing in over one hundred more low income families just up the road..."

Maureen Turner, in this week's Valley Advocate, reports on a new book entitled "Metal Fatigue: American Bosch and the Demise of Metalworking in the Connecticut River Valley" (Baywood Publishing, 2009) written by UMass-Lowell professor Robert Forrant.

Turner writes:

"Companies like Bosch played a crucial role in Springfield's development. For 150 years, Forrant writes, the city sat at the center of a prosperous manufacturing corridor that ran along the Connecticut River, stretching from Bridgeport up into Vermont. Springfield's good fortune began back in the late 18th century, when Congress selected it as the site for a federal armory; the armory, in turn, helped spur other manufacturing development in the city, with a particular focus on metalworking and machine parts. Springfield became known as an area for innovation—Forrant calls it the Silicon Valley of its day—where new techniques and technologies spread from plant to plant, and drew new businesses to the area."

Dusty, in his essay, makes the following observation:

"The two primary industries in the city today appear to be infrastructure improvements via state and federal aid and the construction of affordable housing. Few private businesses come here. And when large companies like Baystate Health or MassMutual do invest in the city, the skilled jobs they create are mostly taken up by people who reside elsewhere. Or by people who want to reside elsewhere. One would be hard-pressed, indeed, to find a family hoping to someday move into the city of Springfield. And that is a shame."

Poor Springfield, indeed.

Here's a link to the Boston Globe's review of Robert Forrant's "Metal Fatigue."