New London urged to rethink bonding plan
New London — As the City Council on Wednesday took the next step toward bonding $1.1 million to bolster the city's feeble fund balance, a handful of residents voiced their discontent with the plan.
By a 4-3 vote, the council passed the second reading of an ordinance that would authorize bonding $1.1 million to replace money the city took from the fund balance when projects ran over budget.
Councilors Michael Passero, Martin T. Olsen and Michael J. Tranchida voted in opposition. The ordinance passed its first reading by the same vote on Monday, and will require a third and final vote.
But some of the residents who spoke during public comment urged the council to reconsider the plan.
"You have to treat this like it's your own money because it is your own money. You have to treat this like you're making decisions for your own family because it is your own family," said Reid Burdick, a former city councilor. "You don't bond money and indebt your kids and grandkids for 20 years because this month you're a little short on money."
On Monday, Mayor Daryl Justin Finizio announced that the city had $400,000 in the bank and would not be able to make its $1.7 million payroll this Friday. The mayor conferred with Gov. Dannel P. Malloy, who agreed to help expedite payment of $11 million in state Education Cost Sharing funds that were going to be paid April 30. That money will be transferred into the city's coffers in time to meet payroll.
Laura Natusch, Finizio's chief administrative officer, said she understands the objections to borrowing for operating expenses.
"It's not a good idea to buy groceries on credit. On the other hand, if you don't have a lot of cash on hand, you'd borrow to repair a roof," Natusch said. "Essentially, in the past, the city used its grocery money on roof repairs, and now the refrigerator is empty."
Earlier this month, the City Council sanctioned the bonding of $4.4 million to account for state grant funding the city has never collected, and to pay for vehicle purchases made last year that were originally going to be paid from the general fund.
In addition to bonding the $1.1 million the council is considering now, the fund balance replacement plan the mayor and the finance director have proposed consists of two additional steps, both of which were approved by the council Monday.
The council adopted resolutions that require it to budget at least $250,000 in each upcoming fiscal year for fund balance replacement and mandates that proceeds from the sale of city-owned real estate must go into the fund balance.
Also, the council's Finance Committee requested that Finance Director Jeff Smith present it with revised budget proposals for the 2014-15 fiscal year. Finizio had proposed a budget that includes a 7.24 percent increase. The Finance Committee asked that Smith give them budgets that would represent increases of 2.5 and 5 percent.
Councilors Wade A. Hyslop, Erica Richardson and Passero - who comprise the Finance Committee - indicated a desire to reduce the number of new personnel positions that would be funded in the budget for the police and public works departments.
The Finance Committee will meet again Monday to review Smith's revised budgets and is expected to make a recommendation to pass the budget to the full council.