Thomas Breen Photos
Alders Dolores Colon, Adam Marchand, Evette Hamilton at hearing.
Alder Al Paolillo Jr. ran both of his hands through his hair as he tried to process what city Budget Director Joe Clerkin had just said: $1.6 million from the state might not make it into city coffers because of uncompleted paperwork.
That’s not money designated for future capital and infrastructure investments; that’s money the city has already spent and counted on getting back.
“So we’re not getting the [money] from the state?” Paolillo asked. “And the state just told us this?”
That revelation emerged during a hearing at City Hall Tuesday night held by the Board of Alders Finance Committee.
It was one of several points of concern about executive transparency, dwindling state aid, and the city’s potential budget deficit that preoccupied Paolillo and his colleagues at the committee’s monthly meeting.
This worried conversation around state aid and the city budget began about an hour and a half into the session, when Clerkin came to the front of the room to testify on two motions from the mayor’s office under consideration by the committee.
The first proposed the reading and filing of updated financial reports for the month of November. The second requested a transfer of funds from various budget line items to cover projected shortfalls in several departments, including police, public safety communications, and FICA/Social Security.
After leading a push to demand fiscal restraint and departmental transparency during negotiations over the city’s budget early last summer, Paolillo seemed primed to take the mayor’s office to task on Monday night for failing to come up with a sustainable plan to curb spending in the first six months of the current fiscal year. Of particular concern was the $1 million year-over-year increase in police overtime since July, most of which derived from the training and staffing required by the city’s forced takeover from the state of the pre-trial detention center at 1 Union Avenue. Both motions passed.
Paolillo at finance hearing.
Then Clerkin brought up the sunsetting of the state’s Local Capital Improvement Program (LoCIP). Suddenly there was a new, and very urgent, budget problem to discuss.
Clerkin reported that on Dec. 29 his department received a letter from Connecticut’s Office of Policy Management Secretary Benjamin Barnes, announcing that the state would be discontinuing LoCIP, as it had exceeded its bonding limit of $825 million and had therefore “reached an inevitable breaking point.”
LoCIP is a state program that reimburses municipalities for capital improvement projects like road or bridge construction. According to Clerkin, LoCIP had been matching city funds on such projects for a number of years. In the budget for the current fiscal year of 2016 – 2017, the city had already allotted $1.6 million of its own money towards eligible projects, expecting a matching reimbursement of $1.6 million from the state.
This reimbursement, however, is contingent on the city’s satisfactory demonstration of money used, projects fulfilled, and LoCIP paperwork completed. The schedule for that paperwork suddenly changed with the state’d decision to end the program.
Clerkin testifies.
Clerkin said he was not sure of, and indeed is not responsible for, the specifics of the bureaucratic requirements for LoCIP reimbursement. (Clerkin pointed to the city’s public works department and the state comptroller’s office as in charge of those procedures.) He said he is confident on one budgetary fact that the alders, and Paolillo in particular, found greatly disturbing: the city of New Haven has been reimbursed for LoCIP eligble projects only through 2014.
That means New Haven has not yet gotten back the expected money for projects included in fiscal years 2014 – 2015, 2015 – 2016, and the current one of 2016 – 2017. Depending on each year’s relevant allocations, that missing reimbursement could be as large as almost $5 million ($1.6 million each year over three years).
Paolillo expressed frustration and concern, not just at the large amount of money on the line, but at the delay in communication to the Board of Alders.
“My issue with this is that, if we don’t have a meeting tonight, we don’t know about LoCIP, which could be a $5 million hit to our capital budget, which in debt service per year could be give or take $600,000,” he said to Clerkin at the end of the latter’s testimony before the committee. “That’s a half a million dollars out of the debt service line, on an annual basis, all because we’re not sure why we’re not getting compensated for prior years. That’s a significant chunk. I’d like to see what the reporting requirements are, what we have reported, and why we haven’t reported for the previous two years.”
At the end of the session, as the alders prepared to approve the all of the motions under consideration that evening, Paolillo raised his hand to speak.
“I’d like to add an amendment that says that the city has to turn over all documentation related to the general fund budget coming from the state of Connecticut,” he proposed. “That they have to turn over all documentation coming from any entity from the state that has to deal with the handing off state functions to city government, reductions in capital projects, rescissions, whatever they may be. We should be notified upon receipt. When the administration receives these notifications, we need to receive them too. That should be the communication.”
“When you have an administration that doesn’t want to provide you with information,” he concluded, “you have to cover all your bases.”
The day after the hearing, mayoral spokesman Laurence Grotheer stated that the city is not late on submitting the paperwork, but that the state sprung the notice of canceled funding as a surprise.