New London’s law director advised the City Council on Monday that the best option for the city’s finances is to continue the 2013 fiscal year with an embattled municipal budget and mill rate approved in October.
The budget for the 2013 fiscal year has become increasingly complex following the approval of a $41,264,459 budget on Oct. 9. The budget includes a mill rate of 26.6, or a 5.1 percent increase over the 2012 rate. The budget was approved following the defeat of a $42.3 million budget with a 7.5 percent tax increase on Sept. 18. Following the Oct. 9 approval, Law Director Jeff Londregan’s opinion was it was impossible to make further modifications to the budget once expenditures reached the equivalent of 25 percent of the 2012 budget.
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On Nov. 5, the council went against the opinion by accepting a petition challenging the revised budget and tax rate. However, councilors could not muster the majorities necessary to reduce the budget, send it to a special referendum vote in December, or approve the Oct. 9 budget as an emergency measure. The result was that the referendum was set at the next regular municipal election in November of 2013, about four months after the end of the 2013 fiscal year outlined in the budget.
Londregan's options
Following the vote, councilors had differing opinions as to whether or not the Oct. 9 budget was in place. Londregan said the options open to the city are proceeding with that budget and addressing any referendum issues after the November 2013 vote or considering that the city has no approved budget and operating under last year’s budget, a process which is permitted under state law.
The 2012 fiscal year budget, however, has a higher level of expenditures than the 2013 budget and Londregan said the council would still need to set a mill rate to reflect the state statute. He said he considers that working under the Oct. 9 budget is the best way to proceed with the budget under the City Charter.
“I think that’s the budget that makes the most logical sense in trying to move things forward,” said Londregan.
Councilor Adam Sprecace said he suspects Mayor Daryl Finizio will veto any further reductions to the budget and that the council would be unlikely to put together the six-sevenths majority needed to override such an action. He said the council might also consider bringing the matter before a judge for action.
“I think we have to address all the legal ramifications after it, including spending money when we don’t have a budget laid out,” he said.
Council President Michael Passero said he believes the Nov. 5 decisions cannot be altered unless a councilor reconsiders his or her vote at the next meeting, which could still be done at the council's next meting.
“They’re not options for us,” Passero said of Londregan’s suggestions. “The council has acted. It’s followed the charter to a T. It’s led us to the predicament we’re in.”
Resident response
Some residents expressed criticism of the budget process during a public comment section prior to this discussion. Dennis Downing accused Councilor Pro Tempore Wade Hyslop and Councilors Donald Macrino and Anthony Nolan—who opposed measures to modify the budget—of refusing any measure on the budget once the vote to accept the petition was taken.
“The last council meeting was the worst I’ve been to, and I’ve been to a lot of meetings,” he said.
Bill Cornish, who has acted as a spokesperson for the group Looking Out for Taxpayers, said the city should look into auctioning off properties with unpaid taxes to generate revenue. He interpreted the council’s actions as making appropriations illegal at this point.
“Now that the petition’s valid it seems the budget is invalid, and it won’t be valid until we vote on it next year,” he said.
Other residents questioned expenses detailed in a check register for the 2012 calendar year. Katelin Teel said these included about $123,000 for an interior design project, $16,400 for restaurant expenses, and $8,600 in gym costs.
“I’m not too confident that the money that’s being paid is being watched,” she said.
Council response
Sprecace said the council has been working to address city spending with actions including an operational audit of several departments and an analysis for expense reductions. Councilor John Maynard said he considers that more savings are available within the budget and that he hopes the council will make reductions or send it to an earlier referendum.
“We should be addressing this,” he said. “This is something that doesn’t even have to go to referendum.”
Passero said the evening’s agenda did not include the budget because action on it would require a councilor to change a vote they made on Nov. 5.
“Each member of this council is committed to the position they’re holding, and I don’t think anyone should fault them for that,” he said. “What we’ve done is follow the charter, and it’s put us in the position we’re in. I don’t think anybody’s happy with it.”
Passero and Sprecace also cautioned residents on interpretation of the check register, saying the expenses span multiple accounts including those of New London Public Schools. They said the operational audit will determine whether any improper expenses were charged to the city in the audited departments.
“Let’s not jump to conclusions,” said Passero. “Let’s not assume it’s all being spent on employees.”
