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Finance Director Says Budget Adjustments Should Bring Tax Increase To About Five Percent

Jeff Smith says debt refinancing, cuts would bring budget to goal set by City Council president; Maynard to propose additional cuts

Finance Director Jeff Smith said Monday that he estimates the 2013 municipal budget can be reduced to a level necessitating a five percent tax increase with a number of adjustments, including debt refinancing and cuts to the Finance Department and New London Police Department.

Smith presented the Finance Committee with an overview of adjustments to the expenditures and revenues to the $42,323,256 2013 fiscal year municipal budget. Voters rejected the budget, along with a 7.5 tax increase from 25.31 to 27.22, in a Sept. 18 referendum.

Smith’s figures make a net decrease of $944,126 to the expenditures as well as a $235,503 reduction in expected revenues. Smith is also proposing reducing a reserve fund for uncollected taxes from $950,000 to $850,000.

Revised figures

The greatest reduction in expenses would come from debt refinancing, although Smith said this also carries the most risk. He proposed refinancing with the expectation of saving $500,000, which he said is possible under current rates but could decline if interest levels decrease by the time the refinancing is done in November. Smith said further cuts would be necessary to make up for the difference if that occurs.

“If you take out a lot of things now and the $500,000 doesn’t show up, you’ve dug yourself a hole,” said Smith.

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Smith is also proposing the removal of $280,000 from the Finance Department, which was initially budgeted for the department to absorb the costs of the school business office. Dr. Stephen Adamowski, a special master assigned to the New London Public Schools, halted the transaction after the council passed the budget.

Smith also proposed cutting $250,000 from the police department. Police Chief Margaret Ackley said there will be five vacant positions in the department as of Oct. 1, and the majority of the savings would come from leaving these positions unfilled.

Smith is also proposing the removal of $46,976 from money budgeted for Mayor Daryl Finizio’s office manager, Tammy Daugherty. Finizio said at a Finance Committee meeting last week that Daugherty has been laid off for budgetary reasons.

Smith’s calculations also include two budget increases. The $59,700 would go toward a targeted audit of three city departments with significant budget overruns, while $73,150 would adjust the law department budget to meet the level of the department’s average spending over the past five years.

In revenue shortfalls, Smith said 60-day collections have not been correctly accounted for and $160,000 should be removed from this figure. He also anticipated a $50,000 drop in parking enforcement revenue since one parking enforcement position is currently unfilled, and a $25,503 loss of rent due to the Savings Institute Bank & Trust plan to vacate the city-owned building at 15 Masonic Street in December.

Smith said he will provide line item data at tonight’s meeting to show where the cuts and increases will take place. He also said he will provide information on the expected effect of a Municipal Employees Retirement Agreement contribution increase from 15.35 percent to 15.5 percent, an approximately $5,000 increase in Southeastern Area Transit fees, and fringe benefits adjusted for cuts.

Smith said he has also asked department heads to give quarterly updates on their budgets to keep the Finance Department and city government up to date on where departments are in their expenditures and revenues.

“I’m a little reluctant to do it, because everyone says the numbers keep changing,” said Smith. “Well, budget numbers do change.”

Council reactions

Council President Michael Passero, who set the five percent tax increase as a goal to reach after the initial budget and tax rate were rejected, agreed that the budget is subject to frequent changes. He said a major part of the anticipated 2012 budget deficit included an unforseen state cut to funds for distressed municipalities.

“We’re a bit cheating here, because we’re three months into the fiscal year,” he said.

Passero said he wanted to ensure that Finizio would back the proposals made by Smith or that six councilors would support them. Finizio may veto the new budget prepared by the council, but the veto can be overturned by a vote of six councilors.

Councilor Don Macrino said he thinks the budget has been brought down to a level where further cuts will be difficult. He said departments will have to keep close track of their finances due to a diminished general fund.

“I think more important than anything is that we control the budget we put in place,” he said.

Councilor John Maynard said he hopes to bring the budget down to a level where it increases taxes by only 3.5 percent. He said he will propose a number of reductions in personnel costs, including a $10,000 cut from the salary of each department head, when the committee receives the updated budget figures tonight. Maynard also said he was opposed to removing money from the police department, saying he would prefer that the money go toward bolstering the department’s staffing.

“I could make up for that with some of the cuts that I have,” he said.

Public suggestions

Residents made additional suggestions at a public comment section to begin the meeting. Dennis Downing said he thought the salaries for the registrars of voters were too high and questioned the need for a director of the Office of Development and Planning.

“I don’t see the need for this position. We went a lot of years without that spot,” said Downing.

Mirna Martinez asked the city to avoid cuts to areas with services overlapping those of the schools, including the Public Library of New London. Suzanne Maryeski, the library director, also appealed to the committee to spare the library from any cuts. Maryeski said the state average for per capita tax appropriations for library services was $43.48 in the 2011 fiscal year, while in New London it was $23.02.

“That may sound like a lot, but in this day and age it doesn’t even buy one book,” she said.

Bill Cornish said the city might consider energy efficiency investments and charging for the use of piers and event space at Waterfront Park. Cornish also questioned an approximately $500,000 expenditure for the Water Street Parking Garage, saying the garage should be bringing revenue to the city. Councilor Adam Sprecace replied that the garage is a self-supporting municipal service, with some revenue going to the city and the rest going to maintain the garage.

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Simone Burke September 25, 2012 at 10:36 AM
Certainly the city could do without funding unnecessary "consulting" positions such as Clark Vanderlyke who has been collecting a city paycheck for the last 3 or 4 years while he "rearranges" the city's old ordinance books- oh yes... And writes his own book on city time as well. Or what about Kevin Cavanaugh who gets paid to be an advisor/liaison to the mayor and city council? More waste! Look around, there's plenty of fat to trim.
Rick Lushay September 25, 2012 at 11:08 AM
Finance Director Says Budget Adjustments Should Bring Tax Increase To About Five Percent Am I the only one that thinks the finance director should be able to be "EXACT" with our financial issues rather than "ABOUT" with the financial figures. This is math not rocket science. This overpaid city employee never has answers or excat numbers on anything. Shameful! Why is he still a city employee?
Dannyboy September 25, 2012 at 11:09 AM
New London is now insolvent and needs to face the courts in a bankrupt filing. It is the only thing that New London can do right now. It is unfortunante but the facts are the facts and they should do it now.
Rick Lushay September 25, 2012 at 11:16 AM
What about the $1.7 million in over spending and the charter provision that the finance director is responsible for that money? The "NO VOTE" was a demand for accountability. Start with the finance director, the charter and have the finance director make good as the charter says. Who is actually in charge in this city? Anyone at all?
Rick Lushay September 25, 2012 at 11:26 AM
Dannyboy, You sound like the mayor now, spreading fear and lies. The city, by state law cannot file bankruptcy. Educate yourself before commenting.
NewLondonSource September 25, 2012 at 11:27 AM
Need some clairification: How is it that eliminating Tammy's position only brings back $46,976, when her salary plus benefits is worth far more? Even if you consider that it is pro-rated for the remainder of the FY, it still seems low. “I’m a little reluctant to do it, because everyone says the numbers keep changing,” said Smith. “Well, budget numbers do change.” Are you serious?? A finance director that believes budget numbers change during the course of a Fiscal Year - what's the point in having a budget then? This guy needs to go. We need somebody who will hold the line on the finally adopted budget and NOT be pushed around by department heads. The city needs someone who will challenge department heads on proposed budget increase requests, not just accept it as a matter of course and run a deficit. Time to lead or get out of the way - we don't need any followers in New London; They, like Mr. Smith, only cost us money without any ROI.
Emily Kendall September 25, 2012 at 11:51 AM
About the charter provisions and budget overspending. Who is responsible to enforce the charter? The mayor, the council? I thought all of them took the oath of office to support and uphold the charter!
Spencer September 25, 2012 at 12:42 PM
I was recently told that Tammy's job was to pay her $52k's--not 47. And from the July overtime report--it did not appear that Tammy was making any overtime, so $52k may have been her base salary. But--was that $52k a base before or after her supposed 25% cut on her original salary? As for the new budgets numbers...well folks, I mean--we are going to have to get something in there--because we can't end up getting something for nothing. I think right now we need to obtain and maintain a check and balance system so proficient, that on day one of budget talk for 2014, Jeff Smith will FINALLY be able to say "We have this much in this account, and this much in this account..." and so on. Just think about it, Business owners knows the value of having that type of check and balance system. Isn't it the law for them--so taht when it comes time to do their taxes, they would know exactly how much they owe in taxes? Don't they have to have proficient and accurate numbers in their records if they are audited? If the goverment expect so much from business owners, why can we not expect the exact sme thing from govermental beings?
Spencer September 25, 2012 at 12:42 PM
The clearest way to get this started is to get the forensic audit done. Give us the exact numbers we are starting out with, and let's keep the exact numbers we are spending by getting the right people to follow through with the check and balances. That way when it does come to doing the 2014 budget--maybe we can get it done in one month, instead of the 9 months is taking to do this year!
Randy Drummond September 25, 2012 at 01:19 PM
Why not do ZERO BASED BUDGETING?
Sue P. September 25, 2012 at 01:20 PM
I think we also need a deep cell audit. (how do you like that name?) There is a huge mistrust of what is actually there and what isn't. I watch the meetings and it is mind blowing to say the least. When the words I don't know and I'll find that out are used so frequently, it makes you start to wonder maybe they really don't know. Are the books that messed up? I am not going to blame Mr. Smith because we have had so many finance directers doing things so many different ways. That's why we need a forensic audit(or as I call it a deep cell audit)
Spencer September 25, 2012 at 01:28 PM
And while we are at it...how about we NOT pay a police cheif of a small, 6 sq miles town nearly 200grands--100 grands of which was overtime--even though it is a salaried position--when in comparison the police commisioner of NYC who is in chare of 0ver 50,000 people--only made $205 grands last year--as his agreed salary??? Imagine saving that 100 grands--huh??
Randy Drummond September 25, 2012 at 01:53 PM
But Smith is responsible for what has happened while he was on watch. Blame for the over spending last fiscal year he was th finance director for 11 months of that budget year.
Sue P. September 25, 2012 at 02:13 PM
Randy, I was trying to be nice. I guess that doesn't work for me. Your absolutely right it did happen on his watch. The way numbers keep coming and going it's hard to trust anyone in that Administration.
Luis Smart September 25, 2012 at 03:04 PM
Spencer, she thinks she is running NYPD!
Debbie September 25, 2012 at 03:41 PM
Fringe benefits for city employees! Let save this one for a better outlook in SECT.
Luis Smart September 25, 2012 at 04:30 PM
No sick days allowed to be carried over... No car for deputy police chief to drive back and forth to his home on the taxpayer dime. Just for starters.
Emily Kendall September 25, 2012 at 06:47 PM
Getting rid of the sick days and stopping having to pay for out of town city employees commute to and from New London would be a nice place to start. Immediate savings. Good ideas, simple to do and makes sense. So the council nor the mayor will do it!
Kitty Crow September 25, 2012 at 08:19 PM
I agree take back city vehicles for the mayor and deputy chief. Cut The police chief's salary by 25% or better yet FIRE the police chief and let the deputy chief and captains run the department (they do anyway-Ackley has no clue). Get B. Welch and Clark V. off the city payroll. Fire the city parking garage manager(not necessary). Increase service provider amounts from Mitchell and Connecticut college or stop sending police and fire for every drunk student, and petty theft - they both have security. Also why does police administration need 3 administrative assistant positions? Brenda, Lori and now Cynthia....I would hope the chief and deputy chief now how to use a computer and phone themselves.
Daniella Ruiz September 28, 2012 at 02:56 PM
a flexible budget is how most people deal with a changing world that is not under their own control. find the cause of the changes.
Rick Lushay September 28, 2012 at 03:07 PM
Mr. Smith looks like he is lost looking at the document. The caption should read " I hope no one asks me any questions about this, I have no idea what it means!"
Daniella Ruiz September 29, 2012 at 08:39 PM
good observations! these 'little things' add up over time. remember the problem when that pipe under Bank St from Howard to Gariballdi Fountain slowly topped off with muck from the feeder brook? that resulted in constant unnecessary flooding as storm water had no place to drain down to. that also allowed surface water to penetrate deep under the existing roadbeds where winter freeze action left more damage where it couldn't be easily seen or fixed. the result is a crummy main highy used thoroughfare. take a drive up Vauxhall St, westerly, just beyond Briggs St. observe the sidewalk on the left side, completely below the leaves, mud, tree debris and grass. it is invisible! never been cleaned, why why why?

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