Finizio's warnings have been consistent
If there's one message Mayor Daryl Justin Finizio has consistently conveyed throughout his time in office, it's that New London is on the brink of insolvency.
He said it in January 2012, less than two months into his term; he said it in a series of public forums during the 2012 budget season; he said it in late 2013 when he proposed a one-time supplemental tax to increase our cash reserves. Most emphatically, he said it in this year's State of the City address when he told constituents, "We are out of money, and we are out of time."
It's hard to imagine how Mayor Finizio could have spoken more forcefully. Yet people, including The Day's editorial board, still fail to hear or believe him. Wednesday's editorial, "Is this any way to run a city," questions why neither he nor Finance Director Jeff Smith realized the city was about to run out of cash; or whether they knew all along but didn't let on; or even whether the city's financial situation is actually as bad as the administration says it is - this despite having run an editorial back in February 2012 entitled "Numbers Don't Lie: NL Faces Fiscal Crisis."
Perhaps people didn't initially believe Mayor Finizio's warnings because it was the first time they'd heard such bleak assessments of New London's finances. Perhaps people don't take them seriously now because they've heard them so often. More likely, they don't understand the nature of the problem, and thus don't understand how it could have persisted this long, this severely.
Our inability to meet payroll without an advance on State Education Cost Sharing funds isn't related to balancing our budget. (This year's budget will balance.) It's because we don't have cash reserves to carry us through the normal ebb and flow of revenues and expenses. We get a flood of money after the tax bills go out, then we have a drought; then, for example, we get ECS funds. Expenses fluctuate as well: This past winter was stormy and expensive. In June we'll pay teachers' summer salaries in a lump sum.
Thus our finance department has struggled to meet our obligations these past two years, often delaying paying some bills in order to pay others. Both Mayor Finizio and Mr. Smith have warned repeatedly that without a financial cushion, we've been in danger of running out of cash.
This is why Mayor Finizio approached our largest nonprofits and asked for a one-time voluntary donation. It's why he has repeatedly emphasized the importance of infusing our fund balance with cash. It's also why financial experts - not just the mayor and the finance director, but also our bond counsel, our financial analyst, our auditor, and even the secretary of the state Office of Policy and Management - agree that the bonding proposal put forth by the Administration is a prudent solution to our cash flow problem.
Fortunately, a slim majority of New London city councilors recognized that Councilor Michael Passero was dangerously wrong on April 21 when he argued in favor of reconsidering the bonding approved two weeks earlier. Without these funds, the city would face another cash crisis this fiscal year - and this time, if we came up short, we'd be out of options. Rescinding these bonds would have been financial Russian roulette.
None of this bonding is, as Councilor Passero contends, borrowing to pay for operating expenses. This bonding will pay for already completed, largely reimbursable capital projects. We wouldn't have gotten into such profound trouble had it been bonded in the first place, and we can get ourselves out of trouble by bonding it all now.
No one expects city councilors to be financial experts. However, it's reasonable to expect them to listen when financial experts are all giving the same advice. Albeit by a frighteningly narrow margin, New London's City Council appears on track to do just that.
Laura Natusch is the city of New London's chief administrative officer.
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