The City Council will vote on a revised municipal budget on Thursday after the Finance Committee recommended a net reduction of about $1 million as well as 5.1 percent increase to the tax rate.
The committee voted 2-1 to approve a $41,384,459 budget for the 2013 fiscal year and send it to the full council for a decision. The council also voted 2-1 to recommend a tax rate of 26.6 per $1,000 of assessed value, a 1.29 increase over the current rate. Both recommendations were made based on a series of revisions proposed by Finance Director Jeff Smith.
Voters rejected the previously adopted budget of $42,323,256 and tax rate of 27.22. The tax rate represented an increase of 7.5 percent over the 2011 rate of 25.31.
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Council President Michael Passero, who chairs the committee, said he thinks the recommended budget should put the city in “good stead.” He said one risk will be an through debt refinancing. Smith has said the council will have to make supplemental cuts if the interest rates due not allow for the savings when the refinancing takes place in November.
“It is a budget. We are trying to predict the future,” said Passero.
Councilor Adam Sprecace said he will support the changes as long as the budget document is kept up to date. Sprecace supported the previous budget, which passed 5-2 on June 19, but later recommended overturning it at referendum after saying he had not received sufficiently detailed information to back up the numbers.
“I think that this is reasonable considering the loss in revenues this city has seen in the past couple of years,” said Sprecace.
Councilor John Maynard opposed the budget, saying he did not agree with a proposal to remove $250,000 from the New London Police Department. Maynard also made a number of recommendations for other cuts, but these were not accepted.
Besides the debt refinancing and cut to the police department—which would include leaving five vacant positions unfunded—the most significant reduction is a $280,000 cut to the Finance Department. This accounts for a decision by Dr. Stephen Adamowski, the state-appointed special master for New London Public Schools, to stop a plan to have the department assume the expenses of the school business office. Another $46,976 was cut from personnel costs due to a layoff in the mayor’s office while the reserve for uncollectible taxes was reduced $100,000 to $850,000.
The reductions were offset by additional costs and revenue shortfalls identified by Smith, including:
- Reducing 60-day collections revenue by $160,000 due to accounting practices saying they should not be counted as revenue
- Increasing the law department budget by $73,150 to meet spending levels calculated over a five-year average
- Increasing the audit account by $59,700 to account for a planned operational budget audit
- Reducing parking enforcement revenue by $50,000 to account for a current vacancy in a parking enforcement officer’s position
- Reducing rent collection on a city-owned building at 15 Masonic Street due to the planned departure of the Savings Institute Bank & Trust
- Increasing Southeastern Area Transit fees by $5,325
The Municipal Employee Retirement Fund contribution has also increased from 15.35 percent to 15.5 percent. However, Smith said the increase will not have a significant effect on the budget and can be covered by the vacancies in the police department.
Maynard recommended a number of salary reductions of between $5,000 and $10,000 for several department heads and administrative positions. He also recommended eliminating funds for some vacant positions including a battalion chief in the New London Fire Department, police sergeant, and the risk manager.
Maynard also recommended restoring a $50,022 maintainer position in the Department of Public Works. The position was cut in the original budget, and Maynard said the restoring of funds would allow the city to rehire a terminated employee, reduce overtime, and provide better services to the city.
“This here is real money,” said Maynard. “It’s not revenue or something we’re hoping to get.”
Maynard’s suggestions were turned down in two 1-2 votes, the first of which sought to restore the money for the maintainer position. Passero said he thought eliminating some of the positions would lead to increased overtime. Sprecace said he was opposed to adding money to the budget beyond the increases Smith had proposed.
“There’s a lot of arguments to be made for a lot of different positions,” he said.
Passero said the council may revisit salaries at a later time, but worried about what message the cuts would send to municipal employees.
“I believe some of our professional staff are underpaid by market standards,” he said.
Maynard said the council had previously been amenable to such reductions in order to transfer money to the police and fire departments to avoid potential layoffs.
“I hope that doing this out of fear of a veto isn’t persuading the vote in any way,” he said.
Maynard also said the city should revisit other policies to look for cost savings, including the use of municipal vehicles and free parking offered to municipal employees at the Water Street Parking Garage.
In a related discussion, the committee unanimously voted to make a one-time appropriation to conduct an operational audit of 10 departments. The audit will look at the finances of the departments in recent fiscal years as well as areas such as general accounting practices and how overtime is approved.
The original proposal focused on the three departments with the most significant cost overruns in their budget: the Department of Public Works, New London Fire Department, and New London Police Department. The committee added the Finance Department, Personnel Department, former city manager’s office, mayor’s office, Recreation Department, Water and Water Pollution Control Authority, and Office of Development and Planning.
Auditor Ron Nossek said the audit will focus on the 2011 and 2012 fiscal years. Asked if the audit could go back further to analyze earlier fiscal years, Nossek said this was possible but that most budget overages started around the 2010 fiscal year.
The audit will be paid for through $31,500 appropriated in one-time funds from the Veolia Water revenue account.