Town expects to close out 2018 in the black
HAMDEN – After shifting funds to address a multimillion-dollar deficit, the town expects to end the 2017-18 fiscal year in the black, according to Mayor Curt B. Leng.
In a Nov. 30 memo to council members and town staff, Leng said the FY
2018 budget had been balanced “despite what was unquestionably a year of challenges ... largely caused by the State of Connecticut’s mid-year, unexpected multimillion-dollar cut of annually received state revenue.”
Spending was decreased by more than $7 million , Leng said.
In the memo, he said the town secured the money in a number of ways, including instituting spending and hiring freezes, collaborating with the Board of Education, and cutting planned pension and capital expenses.
Most of the money came from the latter two categories.
The town’s 2017-18 budget called for $17.7 million to be put toward the town pension liability; that was
“Adding to our debt to plug holes in our budget — it’s just very irresponsible.” Lauren Garrett,
Legislative Council member
cut to $12.7 million.
More than $3.7 million was swept out of the capital budget, as the town closed out, scaled back and, in some cases, canceled projects.
These actions did not need Legislative Council approval, according to Leng, as they considered an administrative function, rather than a budget transfer.
The Legislative Council did sign off on $1.7 million of transfers at its Monday meeting, which, among other line items, covered $752,000 of pension expenses, $253,366 of police overtime costs, $275,000 in previously-projected attrition savings, and $192,934 in substitute firefighters.
According to Clerk Kim Renta, council members Lauren Garrett and Cory O’Brien voted against the transfers, as did Justin Farmer and Harry Gagliardi. Councilor Athena Gary abstained.
In interviews conducted after the meeting, Garrett and O’Brien voiced concerns about using planned pension funds and capital expenses to balance the budget, as using bonded money to pay for operating expenses incurs interest; sweeping capital funds prevents infrastructure work from being done.
These practices keep the community from addressing its debt burden, they said, which, in part, is to blame for the town tax rate.
“(The debt is) one of the reasons we have to have a high mill rate. It’s one of the reasons we’re financially distressed,” said Garrett. “Adding to our debt to plug holes in our budget — it’s just very irresponsible.”
O’Brien and Garrett would like to see the town focus more on long-term sustainability in its financial practices and zero in on what they consider overly-high revenue estimates.
The town historically
has looked to short-term fixes, such as those implemented this year, to alleviate financial pressure instead of considering the long-term ramifications of its actions, O’Brien said.
“It’s just a mindset change,” said O’Brien. “That’s the only way we’re going to get ahead of this and really get things under control.”
Michael McGarry and James Pascarella, the current and former council presidents, said that the capital sweep and diminished pension payment were the best of a series of bad options, not advisable practices. McGarry said other possibilities included further borrowing or a supplemental tax.
Pascarella noted the town’s fund balance — which stood at $2.98 million at the end of the 2017 fiscal year, according to its audited financials — would have been overdrawn if the deficit was not mitigated, opening the community up to receivership.
“I think all those involved did the best they could,” said Pascarella.
“This, obviously, is not the way we want to be closing the budget,” said McGarry. “We played the best hand we could.”