New London — Mayor Daryl Justin Finizio said Thursday that the city will hang New London Main Street's fundraising banners on downtown utility poles before OpSail 2012CT begins July 6, ending a contentious debate over using public money for a private nonprofit.

"That is such good news,'' Penny Parsekian, chief executive officer of Main Street, said when she heard the mayor's decision. "I am overjoyed. The city is going to look beautiful."

On Monday, Parsekian asked the City Council for help after the administration said it would have to charge the nonprofit between $6,000 and $9,000 to hang the 55 banners that feature the names of businesses that purchased them and an image of the Coast Guard barque Eagle.

Parsekian said Main Street did not budget for installation costs because the city had never before asked for any money. She said the banner program, which began in 2003, began as a partnership, with Main Street designing and selling the banners and the city installing them.

This year, the administration said it could no longer afford to do it for free. Parsekian found a private contractor who volunteered to put up the banners, but the public works union objected to the work being done by an outside agency.

Because the banners have to be hung before OpSail, the city said the workers would have to be paid overtime, upping the price even more.

City Council President Michael Passero, on behalf of the entire council, wrote to the mayor on Tuesday, asking him to hang the banners and waive the costs.

In a press release issued Thursday, Finizio said he directed the public works department to install the banners because of the importance of OpSail.

"On this matter, the administration also wishes to respect the views of the City Council and nurture our co-operative working relationship," he said.

However, he added, nonprofits, event coordinators and parade committees need to be aware that the days of the city being able to provide free services are over.

"The City budget is very lean and the provision of free services in the coming fiscal year is simply something the City cannot afford," Finizio said. "With no operating fund balance, such free services would force New London into a deficit, something we simply cannot sustain and remain solvent."

OpSail will be take place July 6–9 in New London and throughout the region.

k.edgecomb@theday.com