Projected Deficit Grows Another $1M

Even after a $2 million infusion from the Parking Authority, New Haven is still looking at a $15 million projected deficit for the fiscal year that ended June 30, according to the budget office’s latest monthly report.

That’s $1 million worse than projected in the previous month’s report.

Last Thursday, the budget office, the Office of Management and Budget (OMB), published its May 2018 monthly financial report. The report projects that the city will face a $15.06 million budget deficit by the time all of the expenditures and receipts are tallied for the fiscal year that just ended on June 30. The monthly financial report for April projected an end-of-fiscal-year deficit of $14.07 million.

Despite the recent announcement that the Parking Authority increased its payment in lieu of taxes (PILOT) to the city by $2 million last month, an amount which has been factored into the May financial report, the projected deficit worsened. The increase came in three key areas: a nearly $2 million cut to expected revenue from building permits, a $750,000 increase to projected workers’ compensation payments, and a $672,981 projected increase to debt service payments.

Click here to download the full May 2018 monthly financial report.

Mayor Toni Harp said during her most recent appearance on WNHH FM’s “Mayor Monday” program that she’s still hoping to close out the fiscal year’s books without a deficit.

The city originally budgeted to collect $15.95 million in building inspection fees for the fiscal year 2017-18 (FY18). The May financial report bumped down the projected end-of-fiscal-year building inspection collections down to an even $14 million. The department has only collected $8.28 million in building inspections as of the end of May.

The city originally budgeted to spend $7 million on workers’ compensation payments, and another $1 million for workers’ compensation contractual services for FY18. The May financial report increased the projected expenditures for workers’ compensation payments to $8 million for the year.

The original FY18 budget projected average monthly workers’ compensation payments to be $583,333. Through the end of April 2018, which are the latest actual (as opposed to projected) numbers in the May report, the actual monthly average for workers’ compensation payments through the first 10 months of the fiscal year were $809,400.

After initially budgeting to spend $57 million in debt service, the city issued over $43 million in bonds in August, and subsequently revised the budget to reflect $31.8 million in savings through bond premiums and refunding. The revised budget subsequently reduced the debt services line item to around $48 million. The city projects to make payments of just over $28 million, or around 60 percent of the budgeted contribution, towards its debt service by the end of the fiscal year. That’s an increase of nearly $700,000 above what it had projected to make towards its debt service in last month’s report.

The monthly financial report also showed a restoration of over $600,000 in state Town Aid Roads (TAR) grant money, an over $500,000 decrease to projections in parking meter and tag collections, and a $150,000 increase to the projected deficit in the city’s self-insurance fund because of an increase in litigation claims.

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posted by: Noteworthy on July 3, 2018  8:55am

Don’t Worry Be Happy Notes:

1. Another month and deeper in deficit and debt.

2. There is not one scrap of good news in the latest financial report - and worse, the mayor’s attitude is so what, be happy. She will and her crack finance department balance the budget.

3. $15 million doesn’t grow on trees. Mayor Harp has lived her whole life as if it did - and money magically appears - but it doesn’t. It comes the old fashioned way - shaking down anybody with a checkbook - taxpayers, PILOTs from Yale and Yale New Haven Hospital - Getting contractors to prepay their building permits so the money can be backdated to the fiscal year just ended June 30th.

4. What’s left for Harp to do? Just find a series of financial gimmicks and the gullible to fork over the dough. And get our compliant and irresponsible auditors to say that’s all good.

5. The road map to financial sustainability and stability is crystal clear: Cut spending, control risk. Harp knows nothing about either one despite decades in government. She has always lived by “go get the money.” Cutting is beyond her ability to imagine, accomplish or implement.

6. For the first time, it may be that New Haven will be under the supervisory eyes of “the state.” It is currently operating in violation of the law, of GAAP, of common sense and our own city charter.

7. Harp’s happy go lucky attitude should alarm every taxpayer whether you’re an owner, investor or renter. Her decisions are leading this city to a very dark place.

8. $809K in worker’s comp per month? Do you think the city should manage that risk? Look deeper into how all those people qualify? But despite all this bad news - hey, Harp awarded her inner ciricle of 37 executives with $500,000 in raises.

9. If New Haven ends the fiscal year with a deficit - despite all the risky, hinky and dubious financial chicanery, Toni Harp should apologize and resign. She is a danger to every taxpayer and is unfit to be mayor.

posted by: the1king on July 3, 2018  9:26am

How do you make a 3 million dollar mistake.  It’s insane.  Anybody else would lose their jobs and most likely be investigated.  I don’t understand.  The state does the same thing.  It’s time to give a republican a chance.  I know that it is a curse word in New Haven, but why not.  Crime is crazy.  You can say it is down, but shootings are going on all the time.  Harp needs to go, we need somebody to clean up shop.

posted by: EarlyBird on July 3, 2018  9:27am

Not sure how much money it would add to the coffers, but it’s time to sunset the free parking enjoyed by hybrid drivers. Perhaps a discounted pass would be more appropriate?

posted by: Brendantibbets on July 3, 2018  10:28am

750k in workers comp should come as no surprise because the city has failed to manage this issue for years. There is widespread fraud and the company that is hired to manage risk prances around employees who are gaming the system. There are a couple of employees who have been on comp or restricted duty for years. One guy was off for 6 months with a torn fingernail. Overtime also goes unchecked because of the wholesale abuse of sicktime as well.

posted by: brownetowne on July 3, 2018  10:42am

I blame the Mayor.  She is toxic for new haven.

posted by: FacChec on July 3, 2018  10:43am

The Mayor’s denial of responsibility for a deficit: From the monthly report in part.

The information set forth herein is for internal use purposes only and is not based on audited
financial information. Such information provided herein is not guaranteed as to accuracy or
completeness by the City and is not intended to be and is not to be construed as a
representation by the City.
Statements in these monthly financial statements that are not historical facts are forwardlooking
statements based on current expectations of future events and are subject to risks
and uncertainty. Actual results could differ materially from those expressed or implied by
such statements. The City therefore cautions against placing reliance on the forward-looking
statements included in these monthly financial statements. All forward-looking statements
included in these monthly financial statements are made only as of the date hereof and the
City does not assume any obligation to update any forward-looking statements made by the
City as a result of new information, future events or other factors.

From the Charter:
Sec 5;
(3) the projected budget surplus or deficit for the fiscal year. If the Mayor shall project a deficit, the Mayor shall in such monthly report make recommendations to the Board of Alders for actions to be taken to eliminate the full amount of such projected deficit.

Who is responsible and in charge here?? Not the Mayor, not the Alders and not FRAC..

Sec. 16. - Recall of Mayor .
A. Procedure. The Mayor may be recalled from office in the following manner 132 : (1) Any fifty (50) Electors may jointly file with the City Clerk an affidavit setting forth that they in good faith desire and propose to file a petition for the recall of the Mayor, which affidavit shall also contain a detailed statement of the grounds alleged for such recall

posted by: THREEFIFTHS on July 3, 2018  12:03pm

posted by: the1king on July 3, 2018 9:26am
How do you make a 3 million dollar mistake.  It’s insane.  Anybody else would lose their jobs and most likely be investigated.  I don’t understand.  The state does the same thing.  It’s time to give a republican a chance.  I know that it is a curse word in New Haven, but why not.  Crime is crazy.  You can say it is down, but shootings are going on all the time.  Harp needs to go, we need somebody to clean up shop.

Why give a republican a chance.The donkey and the elephant symbols of the two dominant political parties are tied at the hip.

posted by: TheMadcap on July 3, 2018  1:26pm

” It’s time to give a republican a chance”

Lol, no

posted by: ClassActionToo on July 3, 2018  1:37pm

TheMadcap: Lol, yes.

posted by: Gary Stewart on July 3, 2018  2:06pm

Re:”  Time to give Republicans a chance” - There is a better alternative. that is for the citizenry to gain control of the local Dem. Town Committee (DTC) . We do that by getting on out local Ward Committees, Running for Co- Chair positions on those ward committees and thus becoming voting members of the DTC, the people who endorse everyone from Alder to Mayor to president.  Virtually no one runs against anyone in New Haven , that is the problem - between the Mayor’s Office / the DTC / Board of Alders / HERE- UNITE unions ,
it’s one incestuous mess! If you really want to fix this mess, be part of the solution - run for something!

posted by: 1644 on July 3, 2018  8:14pm

Gary:  Many may find the DTC route too laborious, particular since so many in the DTC are there to line their own pockets as well as serve the public (doing well while doing good.)  You of all people should know fighting the unions for DTC control is an exercise in futility.
If we want opposition,  any party with ballot access offers a more direct route, although one can also petition on as an unaffiliated.  Republican, Green, or Pirate,  New Haven needs an opposition party, preferably one that can count money (which would indicate the Republican advantage).

posted by: wendy1 on July 4, 2018  9:31pm

We have a huge deficit that is a tiny amount of money for Yale Corp. that owns schools, hospitals, land, and you…....

posted by: Dennis Serf on July 5, 2018  12:28am

Please cue the circus music…

And place it on an endless loop so we have it ready for when the next story runs regarding new haven city management - likely tomorrow.

posted by: JDoe on July 5, 2018  6:47am

“New Haven needs an opposition party, preferably one that can count money (which would indicate the Republican advantage).” That’s a good one! You seem to be pining for the days when Republicans were fiscally conservative and responsible. Now they destroy public budgets by giving a trillion and a half dollars to billionaire donors, stuff cabinet departments full of corporate lobbyists (DeVos, Pruitt et al)
all while following their orange red right over the cliff… let alone their Scotus picks rolling back worker rights and emboldening religious bigotry. Grand Ole Party all right. They are now the party of Trump the bankruptcy king.

posted by: NHPLEB on July 5, 2018  7:28am

@ Gary Stewart—-  don’t even bother to try to break into the Dem stronghold. You will not succeed.  Better off trying to build fro the ground up in another party.  Not all Republicans are far right.  Like any party;  there are factions and probably NH Republicans would want to chart a course of moderation and fiscal caution for the sake of the whole city.

BTW, I know what I owe to the penny!  How does a municipal entity not know what it owes every day and every penny?!?!?!?!?

posted by: 1644 on July 5, 2018  8:36am

Callisto:  Yes, I do pine for those days, and am not a fan of deficit spending.  I wish Bush II had used 9/11 as a reason not to enact his tax cuts, that we might have continued to pay down the debt, or at least financed the wars.  However, it’s important to realize that the Republican Party on a State and local level differs from that on the national level. ( The same would be true for Democrats.  On a state level, we have seen that people like Doyle, Hartley, Reed, and Schlossberg are not as left-wing as the party overall. ) Yes, there are enthusiastic Trump supporters in the Republican Party, but many are not.  You may remember that the last New Haven RTC chair did not vote for Trump.  In New Haven, the Republican Party is so small, an influx of moderate,  folks could easily set the tone.  The important thing for New Haven is having candidates who are fiscally responsible.  With a few exceptions,  the Alders and BoE seem content to join the Mayor in her delay and pray policy of handling the deficit.