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City finishes year with $7.8M surplus

by Robert Storace
October 3, 2015

NEW BRITAIN — Mayor Erin Stewart has announced that the city finished the 2014-15 fiscal year with a $7.8 million surplus.

The mayor, who made the announcement at a recent Common Council meeting, said her administration “watched the taxpayers money like hawks. We cut $16 million in the city’s operating budget.”

In addition, the mayor said Friday, “We saved money with contract negotiations with employees, unions changing their health care to HSAs [health savings accounts], changes in workers compensation and, yes, we were forced to raise taxes, despite all the cuts.”

Stewart has repeatedly said she had no choice but to raise taxes almost 11 percent her first year in office because of the financial situation that was left by her predecessor, Democrat Timothy O’Brien.

One of the most noticeable positive changes, the mayor said, is that the city’s fund balance (similar to a rainy day fund) is almost at $11 million.

A city ordinance states that New Britain is required to have a fund balance that is 5 percent of the overall budget — about $11 million of the city’s $216 million budget. (emphasis added)

Stewart said, “When O’Brien left, it was at zero. We went from zero to $3 million in one year, to where we are now at a little under $11 million. That is quite an accomplishment.”

When a final audit is completed, the city will know exactly how much is in the fund balance, the mayor said.

“When we go out for bond ratings, they want to know what your fund balance is,” she added. The city’s bond rating from Standard & Poors is “A,” which is seen as stable. The fund balance increase, the mayor said, gives the city a good chance at getting an upgrade.

The council was presented with information citing other cost-saving measures, including generating $2.87 million more in tax collection than what was expected. In addition, the city saw more revenues than expected in state aid for education, specifically special education and some federal grant monies.

Stewart’s Democratic opponent John McNamara put out a statement Friday disagreeing with the mayor’s tax increase.

“A balanced budget is an important goal and must be addressed, but to so badly overestimate the need for a tax increase is a real problem underscoring the inexperience and weakness of this administration,” he said. “The bottom line is that New Britain taxpayers and businesses have been burdened with excessive taxation in one shot.”

McNamara, also the Democratic Town Committee chairman, added, “Seniors on fixed incomes have been forced into their limited savings to pay inflated tax rates ….”

The mayor said, “Mr. McNamara wants to return to the practices that nearly sunk our city in the first place. The two budgets I put forward were passed overwhelming by Democrats on the council, so maybe he should address his criticism to them too.”

The mayor said the surplus will be saved.

“We have debt payments coming up next fiscal year and we also need to build our reserves for worst case scenarios, whether a major weather or financial catastrophe [among others]” she said.

This article originally appeared in the New Britain Herald.

 
 

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