Archive for Budget

Email Reveals Bogus Revenues

Many people may remember back in April and May when I wrote several posts that were highly critical of then Mayor O’Brien’s proposed budget. In one of my posts I outlined a number of revenue projects that I felt were beyond belief, no matter how optimistic you wished to be about our city and our economy. This week I am alarmed, but not surprised, that Acting Finance Director, Becky Salerni, had the exact same concerns and raised them to O’Brien in April of this year. Those concerns were completely ignored.

In an email dated April 5, 2013, Salerni called out Mayor O’Brien on a number of bogus revenue projections that she felt were unrealistic. This was not a short list, you can download the scan of the original email here (or an easier to read version of the document here). There were over 20 items that were questioned in this email, many of them the same exact issues I pointed out back in May. These projections, such as single handedly increasing the Rock Cat’s rent, doubling parking revenues, conveyance tax projections, and many others, total over $30 million in over-inflated revenues. That means that Mayor O’Brien’s budget, which he repeatedly called “balanced” is anything but. » Read more..

Budget Surplus, Pure Hogwash

Last night the Mayor spun a lie so large my jaw dropped to the floor. He claimed that New Britain ended the 2012-2013 fiscal year with a $2.4 million surplus. A surplus? Apparently the Mayor is hoping voters have extremely short memories, because this is the same administration who has been crying “deficit!” since they took office.

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The Mill Rate Explained

Part of my goal as President of the CPOA is to break down complicated issues so that everyone can understand them. It took me a good bit of time to become familiar with things like municipal bonding, budget processes, and so on. These are not always “easy” things to learn.

The mill rate, for example, tends to be very confusing to people. Most people don’t really understand what it is or how it works.

I have written other posts on the mill rate, but I decided to try something different. I have distilled the mill rate down into a simple 4 minute video that I think everyone should watch. (You can view the video here.)

This is the first of what I hope to make a series of videos about. So please, let me know if you like it and what other topics you’d like to learn more about. If you think the video is worth watching please share it with all your friends.

Surplus Masks Failed Revenues

Recently the New Britain Common Council transferred over $6 million from the city’s self insurance fund to cover a litany of differing expenses. The resolution is interesting for a number of reasons. It not only reveals some financial mismanagement of the city, but it also is steeped in a political agenda as much of the money goes to pay off failed revenue sources in the Mayor’s last budget. You can download a copy of the budget transfer resolution here if you’d like to follow along at home.

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Fictional Revenues

I recently wrote an extremely detailed article reviewing some of the most troubling parts of the Mayor’s proposed budget for the New Britain City Journal. In the article I identify several areas of concern within the budget. First and foremost are revenue projections that could be called, at best, overly optimistic or, at worst, completely fictional. The reason this is troubling is because the revenue projections completely distort the entire budget. If the Mayor spends what he is planning on spending and in his budget and the revenues fall short, the taxpayers will be left on the hook for a nasty mid-year surprise. Here is a breakdown of some of the areas of concern. » Read more..

The Mayor’s Budget Revealed!

Mayor O’Brien has unveiled his budget for fiscal year 2014 and at a first glance there are several areas of concern. One of the first areas of concern was the fact that his office could even manage to put a readable copy of the budget up on the city website. The version published by the Mayor’s office did not appear to be proofed, because in order to actually read it you would have to print the entire document out and line up the first pages with the last pages.

Fortunately the CPOA has you covered and you can download a clean copy here and actually read each line. » Read more..

Deficit Balloons!

Just last week we reported that according to the Governor’s office our State was facing a massive deficit, far higher than previously projected. At the risk of repeating ourselves; Connecticut is facing a massive deficit, far higher than previously projected. » Read more..

Connecticut’s Deficit – Out of Control

The Governor’s budget director has recently made news by announcing that Connecticut’s deficit has balloon to $365 million. Just for the record that is over six times larger than what Comptroller Lembo reported November 1st and more than twice the size of the deficit that Connecticut ended with at the close of last fiscal year.

Where did the deficit come from? The governor’s office has stated that currently the government has collected $51 million less in corporate taxes than anticipated and the sales tax is about $44 million behind projections. This is only made worse by the fact that the state is currently spending over $294 million what was budgeted, but the governor assures us this will be decreased by $54 million in a partial spending freeze the Mayor has asked of state agencies.

Currently there are no date set for a special session to cut the budget, the governor would need legislative action as the cuts needed are greater than what he has the authority to do. However lawmakers are suggesting a session may take place before Christmas.

As New Britain heads into our annual budget season these cuts should concern the Board of Finance and Taxation. A large amount of state aid to municipalities could be targeted for cuts, and reductions in reimbursements or PILOT funds could leave New Britain high and dry come the end of the year. As the state tightens their belt it is often the cities that feel the pinch. We need to prepare for a cold fiscal winter if the state can’t get their spending under control.

 

City Finally Responds to FOI Request

Early in September the CPOA submitted an FOI Request to the city of New Britain regarding certain revenue lines. After failing to respond within the required four day window, a point admitted later by Communication Director Phil Sherwood, I went before the Common Council and raised my concerns. The city finally released the information I requested, a full month after my original request.

What was in my request

My original request questioned the reliability of several projected revenue streams, such as the Anti-Blight Poor Condition Revenue line and the Transitional Revenue line. My guess was that these lofty figures were not realistically obtainable, and now that we are a quarter into the fiscal year I wanted to receive an update as to how much revenue has been generated.

What I found out

As I assumed, the actual returns on these lines is far below expectation. Out of a projected $425,000 in anti-blight fees less than $8,500 (or under 2%) has been collected, and these funds didn’t even appear in the account until after I made my initial request. The police and fire “hot spot” fees, which are expected to net close to $1.1 million have not yet generated a single dime. And while Phil Sherwood was quick to point out that these ordinances have just been enacted it doesn’t change the fact that they are now expecting to collect close to $135,000 every month from these fees alone.

Another contested issue, the Non-Owner Occupied Garbage Collection, which was originally supposed to raise close to $3.5 million, was abandoned. The Common Council instead passed a wide range of fee increases that will supposedly total $3.5 million. The problem with this plan is that the Common Council wasn’t told which fees would be raised by how much. This could result in drastic increases for building permits and other fees that would stifle growth and industry.

Trouble ahead

One area that we will continue to monitor is revenue projections versus actuals as the city moves forward. Currently several revenue lines in the budget have not reached 25% and we are over a quarter of the way through the year. This is to be expected, however, because certain lines generate more revenue in the summer while others generate more revenue in the fall, winter, and spring. It is somewhat troublesome that some of the licenses and fees the city recently moved to raise have not yet reached the 25% threshold so it makes me wonder whether or not the expectation that raising them will raise the revenues expected

To view the full documents released by the city click here and here.