New London audit reveals nearly $850,000 surplus
New London — The city ended fiscal year 2014 with a balanced budget and a surplus of almost $850,000, according to a preliminary audit report released by the finance department on Tuesday.
“This confirms that we’ve balanced the budget for two years in a row,” Mayor Daryl Justin Finizio said in a statement. “Given New London’s history of deficit spending, this shows a complete turnaround in the way we handle our finances.”
The city received $755,369 more in revenue than it originally anticipated, including an additional $427,261 from charges for services, $232,576 for licenses and permits, and $99,220 in property taxes.
The city also spent $92,794 less than it had budgeted, with the savings largely coming from the education budget, $95,742; employee benefit payments, $172,187; the City Council budget, $104,939; the Public Works Department, $77,643, and the mayor’s office, $48,489.
But there were also overexpenditures, including $171,790 in the police department, $158,588 in the fire department and $91,001 in the finance department.
In total, the surplus equals $848,163. The surplus will be added to the city’s fund balance — or savings account — bringing the balance of that account from $1,471,158 to $2,319,321.
“First, after years of underestimating expenses and overestimating revenues, we’re finally budgeting accurately,” Finance Director Jeff Smith said in a statement. “Second, we’ve increased our fund balance by 57 percent. This is major progress.”
The fund balance should be equal to two months of operating expenses, or $13 million, independent financial consultant Mark Chapman has previously told the City Council.
A city ordinance mandates that the fund balance be at least 8 percent of the city’s budgeted expenditures.
The city’s audit was conducted by Ronald Nossek of Cohn Reznik LLP, the mayor’s office said.
Also Tuesday, Finizio, Smith, Treasurer Donna Rinehart and Bond Counsel Joe Selinger signed off on the issuance of $7.46 million in municipal notes and $6.45 million in municipal bonds, including the $1.1 million approved by the City Council last year as part of the mayor’s fund balance replacement plan.
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