Fiscal Hawk Roberta Schaefer Urges State Aid For Worcester

Tuesday, October 08, 2013

Steven Jones-D'Agostino, GoLocalWorcester Business/News Contributor

The Research Bureau's Roberta Schaefer wants Worcester to receive state aid for city assets that other communities benefit from, and that Worcester gets hardly reimbursed for.

Roberta Schaefer has been watching Worcester City Hall like a fiscal hawk since 1985. While the longtime head of The Research Bureau plans to retire at the end of this year – or as soon thereafter as her replacement is hired following a nationwide search – she intends to maintain her vigilant monitoring.

Twenty-eight years ago, Schaefer was selected as founding director of the private, non-profit Research Bureau, and has headed the organization ever since – becoming president and CEO in 2008. She has been responsible for overseeing the research, writing, and editing of around 340 reports and organizing nearly 200 public forums and annual meetings on a wide variety of public-policy issues affecting the daily lives of the Worcester region’s residents.

The Bureau’s studies and forums have contributed significantly to the discussion and resolution of myriad public-policy issues. The most recent report, issued in August, is titled Worcester by the Numbers: Housing and Land Use.

Much has changed in Worcester in those nearly three decades. The city is slowly but surely emerging from the insular, parochial shell in which it had wrapped itself for more than a century. And, in the past decade or so, New England’s second largest city has largely shed its industrial skin – donning, in its place, a shiny, new post-industrial coat consisting mostly of medical and health care and education.

But big challenges remain for Worcester and its municipal government – especially with the onset of the Affordable Care Act – known popularly as Obamacare. Yet another, is getting the state to fund Worcester for city assets that neighboring communities have long relied on.

Here are edited highlights of an interview with Roberta Schaefer. Listen to the complete 29-minute interview on The Business Beat, which airs Sunday, October 13 at 10 p.m. (ET) on 90.5 WICN and in streaming audio at WICN.org. By Monday, October 14, the interview will be available 24/7 in MP3 format on the WICN Business Beat page.

Responsible stewardship of municipal budget

Why are you retiring? And are you really retiring?

I’m retiring from the Research Bureau.

So you’re not going to go out and play golf.

Oh, no. I’m not a golfer. I’d like to think that I’ve gotten the organization to the point where we’ve accomplished many things. It has a very good reputation for putting out credible reports and for educating the public about a whole variety of issues. It is in very sound financial shape. And so putting all those things together, it seemed like the right time because I would like to know if there is life beyond the Research Bureau [laughs]. [I and my husband, David Schaefer,] do have six wonderful grandchildren, with whom I’d like to spend more time at this point. [We’d also like] to travel some more. Although we’ve had many opportunities to do so, there are a number of places that I would like to see. It would be nice to know what it’s like not to be so pressured all the time, to produce the next report or to organize the next public forum.

You’ll have to go cold-turkey.

Right, but I will remain forever committed to the mission of the Research Bureau. And if there are particular projects – not just in the Research Bureau, but elsewhere – that interest me, I would still like to be involved in some way. We will [remain] here in Worcester – my husband is a professor at [the College of the] Holy Cross and he will continue teaching. So we’re here [to stay], and I’d just like to do some other things.

Do you have anything specific planned, right now, or are you just going to relax and consider the options, after a few weeks of relaxing?

I’m thinking about some things, but nothing, at this point, that I’m prepared to discuss [publicly].

What shape is Worcester’s municipal government in now versus 28 years ago, when you started with the Research Bureau?

I actually think that it’s in pretty good shape. Worcester has been fortunate, throughout this period that I’ve worked there, in that we have always had responsible financial managers in charge.

You mean the city manager, city auditor, and city treasurer.

Yes. So Worcester has never had the problems of a Springfield or a Lawrence.

Or, a lot of other American cities, such as Detroit.

Absolutely [yes]. And we do owe that to responsible stewardship of the municipal budget. Mike O’Brien [the city manager since 2004] has been very good at this. He really came in and, fairly soon [after], got the [City] Council to buy into his five-point financial plan, which the Council has adhered to, ever since – because the manager keeps reminding them of it. I think that has been very good because he set certain goals of trying to build the [capital] reserves. We haven’t been very successful at that. But because of the fiscal prudence, [Worcester] has managed to get [its] bond rating improved, which is very unusual.

And it’s unusual, given that the whole American economy crashed five years ago.

That’s right. The bond-rating agencies usually want [a municipal government] to have [at least] 5 percent in reserves – [Worcester has] only had about 2 [percent]. But because [O’Brien] has really worked at it and has [fiscal] things arranged in such a way, [the bond-rating agencies] know that he has set a limit on borrowing and has gotten some of the big [budget] items under control. The major one that he realized right away – which the Research Bureau had been writing on for 15 years before he came in [as city manager - was public-employee health insurance. It was a serious issue, and he just ran the numbers out, to realize that this was unsustainable.

Over a period of years - it was not easy [to address] – he managed to get all of the [municipal labor] unions to agree to changes [in their contracts]. Unfortunately, it was the teachers union that was the last to agree, and that was the biggest [contract]. So there have been several hundred million dollars worth of savings in the last decade as a result of the changes that have been made [under O’Brien’s tenure as city manager].

Mike O’Brien is in talks with Winn Companies, a national real-estate developer with holdings in Worcester, about possibly going to work for them. You’re retiring from the Research Bureau at or around the end of this year. Worcester Public Works & Parks Commissioner Bob Moylan is retiring around the end of the year, as is City Auditor Jim DelSignore. Is Worcester going to be rudderless and leaderless?

No, I don’t think so. I can’t comment, obviously, about Mike and his plans. But what [the city manager] has done, in addition to sound fiscal management, is that Worcester has managed to get itself into the post-industrial era. We were an industrial city. Obviously, we would no longer call us that - or [call] any other place in the United States [that], for that matter. – although manufacturing is coming back [in the U.S.

But it’s usually high-tech manufacturing, using robotics, so it’s not people-labor-intensive.

Right, exactly. We were fortunate [in Worcester] that we had nine or 10 colleges located here – depending on how you count them. Then, of course, there’s been the addition of the Mass. College of Pharmacy and Health Sciences, which has been a tremendous asset, especially to downtown. And of course, several of these [colleges] cross over between medical and higher education. So, as they say, we’re eds-and-meds. I think that [Worcester has], in the last decade, really begun to see the synergy there, and how that can translate into jobs. [It’s] not enough, yet, but the potential is absolutely there.

Worcester is on a good, solid platform.

Yes, and we did not have to relocate a college or a hospital here, like some communities [have done]. We had those assets, and I have to say that locating the [UMass] Medical School in Worcester [in the 1970s] was [a major] high in terms of enabling Worcester to enter this post-industrial era.

Absolutely on the right track

With the phasing-in of Obamacare, and its restrictions on federal reimbursements to healthcare providers, has Greater Worcester overbuilt the physical and other capital resources, when it comes to medical care?

I’m not a prognosticator. What we do at the Research Bureau is, analyze the issues. I can say that I think the whole healthcare situation is definitely up for grabs, in terms of how it’s all going to shake out.

Are we going to be selling a lot of Greater Worcester’s expensive medical-diagnostic equipment and facilities on Craigslist, pretty soon?

No, I don’t think so, because regardless of what happens with Obamacare, the need for health care is going to be there forever.

We have an aging Baby Boomer population.

Exactly. We have an aging population.

Who’s also living longer.

That’s right. I hope to be among those [laughs].

Me, too. [laughs]

The need [for such medical equipment and facilities] will [continue to] be there. How it’s dispensed and implemented, is something that is, as I say, beyond my pay grade.

We’re still going to spend a lot of money. Now, America spends about $2.5 trillion a year on health care, and a 2009 Thompson Reuters study estimated that about 30 percent of that is wasted – and that’s just on the clinical side.

Health care is one-sixth of our [national] economy, so it’s big, regardless. And higher-education [in health care] is not going to go away. It may be reshaped within the next decade. As people say, “The job that you you’re going have [then], hasn’t been invented yet.” All of these institutions are … going to have to be training the next generation of jobs – and the generation after that. So I’m not worried about these [medical-education institutions] that we depend on [in Worcester] going away.

So [in terms of] both the financial and the economic-development piece, the City [of Worcester] is absolutely on the right track.

Worcester is a unique city in the sense that we’ve got a large middle-class population still living inside the city as well as strong neighborhoods that haven’t been hollowed out and blown up, like in so many other cities across the country.

In that respect, it’s a solid city. … [Worcester has things] that are not [in communities] around us, but [from] which the other communities around us benefit. [They are] mainly those things that we’re relying on for our economy, which are the health-care institutions and the colleges. So all the communities around us don’t have those things, and yet they’re benefiting from them. It impacts their property values. … If you look for example, at the North County, they’re in much worse shape than [Worcester] and certainly the communities around us [are in] because we have those assets.

So one of the things that is on my agenda, before I retire, is to talk about whether there should be some other kind of formula in state aid that takes account of these assets that [Worcester] has, that other communities are benefiting from, and for which [Worcester] gets hardly reimbursed at all.

Would this be a city tax on people who work in Worcester?

No. It would have to be [funding] from the state level because, as you know, Massachusetts cities and towns have no authority to tax, except what the state grants [them authority to tax]. So there would have to be some [state] authorization [for such funding to Worcester]. … There has to be some leadership from the state administration.

In that sense, Worcester is different from Hartford and Providence because, geographically, we are so much bigger, which is why we still have that [large] middle class here. [Worcester] has a lot of single-family housing, where [Hartford and Providence] do not have that … [and] have been hollowed out of their middle class.

Steven Jones-D'Agostino is chief pilot of Best Rate of Climb: Marketing, Public Relations, Social Media and Radio Production. Follow him on Twitter @SteveRDAgostino.