City of New Haven
Expenditure changes from May 2018 to June 2018.
The city is now looking at an $11.5 million projected deficit for the fiscal year that ended June 30 — $3.5 million less than projected a month earlier.
The city credits the 23 percent reduction to the projected deficit in comparison to last month’s projections in part to unexpected savings in the police and fire department budget salary lines.
On Friday, July 27, the city’s finance department published its June 2018 monthly financial report, which is the final monthly financial report for Fiscal Year 2017 – 2018 (FY18), which ended on June 30.
The report puts the city’s projected deficit for the fiscal year at $11.5 million. Which is over $3.5 million less than the $15.06 million projected deficit included in the May 2018 monthly financial report.
Click here to download the full June 2018 financial report.
In a summary at the top of the document, Mayor Toni Harp and Acting Budget Director Michael Gormany identify several reasons for the change to the city’s projected deficit.
The report notes that the June report takes into account a previous commitment from Yale University to increase its voluntary payment to the city by $2.5 million. “In previous monthly reports,” the report notes, “this amount was not forecasted against the City deficit.”
The report also notes that property taxes are projected to be $3 million over budget for FY18, with the property tax collection rate projected to be at 98 percent.
The FY18 budget projected that the city would collect $249.9 million in property tax revenue over the course of the fiscal year. The June report states that the city actually projects to collect closer to $253 million.
The budget also notes that actual collections for real estate conveyance tax are at just under $3 million for the year, which is nearly $1.3 million over budget.
However, the departments that saw the largest positive financial shifts from the May to June reports were the police and fire departments. The Police Department is now projected to end the year at $60,161 over budget, which is nearly $759,000 less than what had been projected in May. The Fire Department is now projected to end the year with a $3.67 million deficit, which is $1.3 million less than projected last month.
“The Police department seen [sp.] a higher than expected savings within salaries,” the report notes. “The 900K difference between the month of May and June is primarily due to a high volume of vacancies within the police department and a class not materializing in the month of May and June.”
Revenue changes from May 2018 to June 2018. [The column headers incorrectly read April 2018 and May 2018 respectively.]
The report notes that at the end of the fiscal year, the Police Department had 62 police officer positions vacant, which resulted in a salary savings to the department $4.2 million. It also notes that the department has 27 police officer positions vacant for positions that had been budgeted at $1 per position. The department also had 10 vacant police detective positions, four vacant police captain positions, three vacant police lieutenant positions, and three vacant police sergeant positions.
Police Chief Anthony Campbell decided in June to delay opening a new police academy class because of a scandal involving fabricated background checks.
“The Fire department savings is from a reimbursement of salaries from firefighters who bought back time from the city in order to retire,” the report notes. “The savings is applied back to the general fund salary account for the Fire department.”
The fire department’s salary line item is now projected to end the year at $25 million, which is $1 million over budget. The salary line item was projected to end the year at $2.25 million over budget last month.
The report notes that the department ended the fiscal year with eight vacant firefighter positions, for a salary savings of $622,968, as well as three vacant firefighter positions with salaries budgeted at $1 each.
The department also ended the fiscal year with four deputy chief positions vacant, one fire captain position vacant, three assistant drillmaster positions vacant, and eight fire lieutenant positions vacant.
The report also identifies a number of other city departments ending the year in the black due to vacancy savings. Those include the Department of Public Works (DPW), which is projected to end the year with a $468,864 surplus thanks in large part to vacancies in the deputy director of engineering and chief of operations positions.
The Public Safety/911 department is projected to end the year with a $116,670 surplus, in large part because of a vacancy in the director positions.
Reductions To Medical Self-Insurance Fund Deficit
The June report notes that the medical self-insurance account is projected to end the year with a new fund balance of $5.9 million in the red. That’s compared to a $19.7 million projected deficit predicted in last month’s report.
“The final claims reconciliation,” the report reads, “was lower than anticipated for the FY 2017 – 18 fiscal year.”
The city now projects that total medical self-insurance claims for the year are projected to amount to only $116.7 million. That’s nearly $5 million less than what had been projected last month.
The total medical self-insurance expenditures for the year are now projected to increase by only 7 percent over last’s year total expenditures; last month, the city was looking at a projected 10.09 percent increase.
Increasing Employee Benefits
Although the overall city financial outlook improved from May to June, there were nevertheless a few departments and expenditure lines that moved further into the red.
The Employee Benefits line item deficit increased to from just over $1 million to $2.8 million. That deficit was driven not just by $1.3 million overage for the year in workers compensation payments, but also a $1.3 million overage for the year in health insurance payments.
The city also noted a $287,000 shortfall in revenue from Build America Bonds (BABs) that were issued in Fiscal Year 2009 – 2010.
BABs were “taxable municipal bonds that featured tax credits and/or federal subsidies for bondholders and state and local government bond issuers,” the report notes. “The City receives tax credits each year which has [sp.] gradually decreased.”
The city also noted that the city received $190,000 less than projected from the state this year in off-track betting reimbursements.
The Board of Education’s projected deficit also increased from $6.9 million to $7.2 million.
Any deficit is an abomination and due to gross mismanagement. Crediting Yale payments gor the current 2019 fiscal year back to 2018 is reckless and irresponsible.