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(Left to right) Mayor Joseph DiMartino and finance director Brian Hall.
DERBY – The mayor and his finance director had their regular checkup on Aug. 14 with the state entity keeping an eye on Derby’s finances.
Members of the Municipal Advisory Finance Committee (MFAC) asked Mayor Joseph DiMartino and Derby Finance Director Brian Hall for general updates on how the city is doing money-wise.
They’re asking because Derby officials have been making appearances in front of MFAC since September 2020, when Mayor Rich Dziekan’s administration discovered the city’s budget accidentally double-counted school grant money before he was in office. The blunder created a budget deficit.
The city had been making progress but then, in August of 2023, the committee, saying they no longer trusted financial data being supplied by the Dziekan administration, voted to designate the city a “tier 1” municipality. That made appearances in front of MFAC mandatory, and potentially put Derby on the path to a state takeover of its finances.
DiMartino was elected in November 2023, and brought in Hall, the city’s first permanent finance director in several years.
Hall said previous Derby budgets were a mess and had left the city at least $2 million in the hole. He said the city over-estimated tax collection rates and didn’t budget enough money for employee benefits. A previous budget used fund balances to balance the budget, and audits were filed late. The DiMartino administration declared itself in a fiscal crisis. Click here to read every story The Valley Indy published on the issue.
In April, the DiMartino administration advocated for and got the tax board to approve a tax increase of 4.6 mills. Click here for a previous story. The tax increase, along with temporarily decreasing pension payments and using federal COVID-19 relief funds as a bailout, helped to close the budget holes, and put some money back into the city’s fund balance.
The tax increase and the use of ARPA funds to bolster the struggling budget were explained by DiMartino and Hall to the commissioners.
“It’s not something we wanted to do, but it was something that we had to do,” the mayor said.
Hall summarized this year’s budget with the steep tax increase compared to prior budgets.
“The (prior) budgets, as you can tell from all the deficits, was never accurate,” he said.
Municipalities in Connecticut are required to have their budgets audited, and those audits are then sent to the state by the end of each year.
In 2021, the state sent a letter to Derby saying they hadn’t submitted an audit on deadline in four years. Furthermore, the audits pointed to problems that were consistently not addressed by the city. The same problems would show up year after year.
Derby is now officially caught up, having submitted its 2022 – 2023 audit, which the panel reviewed. The 2023 – 2024 audit is due by the end of the year.
Hall said he is hoping to get the audit completed by deadline, but he could guarantee it. The city is using a new financial software system that is still being implemented, and there are problems gathering data from the school district, since it’s on another system.
The MFAC folks don’t normally respond in depth as to how Derby is doing. They thanked them for their time and effort and said see you next time.
