Don't blame councils for NL budget woes

The intent of publishing my report, "Observations Regarding Reported City of New London FY2012 Budget Deficit" (available at www.sprecace.com) was to enlighten readers about the magnitude of financial issues facing New London. New London does have a problem with funding city services, as acknowledged in my report, but it is not one that is as large as the current city administration portrayed and it is certainly not the result of actions of previous city councils.

I had hoped that this report would have sufficed, but The Day's editorial staff continues to perpetuate an idea that previous councils manipulated budgets in order to paint a rosier picture than what actually existed. This is simply untrue.

The latest of several examples of this fallacy is included in The Day's May 19, editorial, "NL mayor must seek concessions." Timelier and more numerous responses to these allegations would be made if my full-time job and resources enabled me to do so; a status available to those who continue to levy the charges. Instead, the report I published remains an accurate description of my position and should be reviewed whenever related questions arise.

My report identifies perhaps the most revealing detail suggesting the reason behind the deficit reported on the expense side of the FY2012 budget. In a Jan. 25 interoffice memorandum from the personnel coordinator to the mayor, it was identified that department heads were originally asked to provide an "estimated budget for the current fiscal year" and not requested to identify how they would live within their budgeted allocations. Budgets apparently were not followed during the 2011 calendar year that spanned the second half of fiscal year 2011 and the first half of fiscal year 2012. Expense levels were not "low-balled" by the council during budget development, as the The Day has alleged. They were ignored by administrations (past and present) during budget implementation.

On the revenue side, only reasonable expectations were made; many of which were disregarded by the administration until recently. Since the disclosure of the administration's Jan. 27 deficit report, hundreds of thousands of dollars in missing revenues that were questioned in my report have been discovered. Some examples include $50,000 in interest earnings from school building projects; $253,000 from miscellaneous revenue; $87,000 from the police department COPS Grant; $150,000 from additional private police protection fees; $290,000 from the fire department SAFER Grant; $50,000 from private haulers; $310,000 from Youth Affairs grants; $64,000 from State Magnet School Transportation; $87,000 from CIRMA; $247,000 from capital projects. This is not an exhaustive list and excludes even more revenues identified during the FY2013 budget process.

The approved FY2013 budget brings the cost of government to a level that I believe is commensurate with the services that New London currently expects and avoids reductions to a level that should require layoffs on the order of those being suggested. The administration gave no indication that such measures would be needed after the council established the $83.1M 2012-2013 budget.

The greater issue facing the city's finances is with revenues. State funding has dropped significantly over time with the most recent example being an approximately $600,000 reduction in Distressed Municipality Aid. Other revenues no longer available for FY2013 include expiration of the Fire Department SAFER grant, decreases in federal Community Development Block Grant funds, reductions in loan interest subsidies, and a real estate property tax collection rate that has reportedly fallen from 98.6 percent in FY2009 to an estimated 97.1 percent in FY2012.

The story of New London's financial situation is far from being told in its entirety. Many questions remaining will only be completely answered after all aspects of the city's finances are fully scrutinized. Consideration of a forensic audit is currently within the council's Finance Committee and I believe the council must approve commissioning of such an audit so that the city can move forward knowing its exact fiscal status.

Adam Sprecace, a Republican, is serving his third term on the New London City Council.

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