Projections show New London deficit increasing to $1.42 million
New London - As the city enters the second half of the fiscal year, it is facing a potential $1.42 million deficit in its $41.3 million general government budget, about $300,000 more than predicted two months ago.
In November, Finance Director Jeffrey Smith said the city was facing a $1.1 million deficit. But on Monday night, Mayor Daryl Justin Finizio told the City Council that revenues are down by nearly $700,000, which includes $240,000 PILOT funds from the state; $200,000 in expected building permits; and $130,000 in conveyance taxes.
The city also could overspend the budget by about $725,000 by the end of the year, Finizio said. Most of that money - $428,000 - is in fire department overtime. He said new reduced staffing levels will keep future overtime down.
"But the good news is we are working with departments to save money and close the gap,'' Finizio said.
The public works department is expected to save about $350,000, he said, and the police chief has asked for a series of monetary transfers within the police department which could save $300,000. Another $600,000 could be saved in debt service if there are no further bonding requests through the end of the fiscal year, which ends June 30.
Finizio also added that before the end of the year, revenue projections could change. If Village on Thames breaks ground on its proposed housing project in Fort Trumbull in April, as expected, the city could collect close to $200,000 in fees.
Also on Monday, the council received a preliminary report on the annual audit for 2011-12 budget, which shows the city spent $3.7 million more than it collected in revenue. Funds were taken out of the fund balance, leaving $1.3 million in the account. The finance department reported that the fund balance was reduced to $300,000. The full audit is expected to be completed by Jan. 31.
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