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New London — A quarter of the way through the fiscal year, the city is facing a $1.1 million deficit in its $41.3 million budget.
"It's certainly not as good as I would have hoped,'' Finance Director Jeffrey Smith told the City Council Monday night.
But he added, so early in the fiscal year, the numbers will inevitably change before the budget year ends on June 30, 2013.
"It's not what we overspent,'' Smith told the council. "This is an estimate of what we could overspend.''
Smith presented the city council with a report on the first three months of the fiscal year, which shows a $362,262 decline in expected revenues and projected overruns of $825,131.
Mayor Daryl Justin Finizio, who attended the meeting, said he is committed to not raising taxes and will make spending cuts to balance the budget.
"From my perspective, we absolutely will not run a deficit this year,'' Finizio said. "We will make supplemental cuts if necessary.''
"I think that's an important message,'' added City Councilor Donald Macrino. "We'll stick to the budget come hell or high water. ... We'll make sacrifices to do that.''
The city will receive $240,000 less than expected in state PILOT programs and that number will not change, Smith said. Other revenue sources are down, including conveyance taxes, parking violations, ambulance revenues and building fees.
On the expenditure side, public safety and public works are trending in the direction of overspending their budgets, Smith said. The police and public works departments will most likely make up their deficits by the end of year, Smith said. But the fire department will be over budget, according to Smith, by as much as $650,000.
Overspending in the fire department can be attributed to 18-man staffing levels that didn't change to 16-man until August, nearly two months into the fiscal year. There is also a spike in sick time in the department, Finizio said.
The mayor, the fire union and the fire department management are looking into the reasons, Finizio said.
Smith said the next quarterly report, which will be available by mid-January, will give a clearer picture of the city's finances.
"We'll have a better sense if we're looking at a couple hundred thousand or a million,'' Smith said.
Voters rejected the city's $42.3 million budget at a September referendum and the council lowered the budget to $41.3 million, which called for a 5.1 percent tax increase. A second referendum petition was circulated, and a date for another referendum is set for a year from now. Some of the more than 800 people who signed the second petition said they did so to protest the tax increase. But others said they signed as a protest after the administration's attempt to quash a second referendum.
Without enough votes to move the date up, the council followed the steps outlined in the city charter, which says the vote will take place at the next municipal election.