(Left to right) Kara Rochelle and Kurt Miller (contributed photo and Facebook photo)
ANSONIA – The city’s chief financial officer put a spending freeze in place last month because Ansonia did not receive about $1 million from the state for which it budgeted.
In addition, the city is not sticking to charter-imposed budget deadlines because officials said the current deadlines cause too much guess work at budget time.
The current budget included $1 million in revenue from the state’s distressed municipalities grant. However, that money – although it was proposed by the governor early in the state budget process – did not survive the final legislative budget approved in June, a month after Ansonia approved its budget.
The city, like communities across the state, created its budget prior to the state passing its budget. Ansonia, like neighboring Derby, relies heavily on state money.
“Right now we have a shortfall of $1 million in expected revenue,” Kurt Miller, Ansonia’s CFO, said.
Spending Freeze Explained
Miller said the spending freeze means that all expenditures by town departments must be approved by the finance department.
“On a normal day, when someone wants to spend money, they would pull a purchase order and they can go ahead and purchase that item. Now, with the freeze, they’ll send me an email and say what they want to purchase. I’ll review it, consider the need, see where the budget’s at, and I’ll approve the request or not. It’s an extra step we’re taking to err on the conservative side of spending,” he said.
Miller said that, overall, Ansonia government is in fine fiscal health. The city will be able to deal with the revenue hole. It’s good to be cautious, he said.
“There’s a lot of uncertainty going on in the economy, with inflation and the amount of taxes we will collect,” Miller said. “We were right on budget for tax collection in December. We’re not going to spend money on any big ticket items until we have a full grasp of what our future tax collection is.”
The State Money That Wasn’t
Neighboring Derby also budgeted for the distressed municipalities grant and is dealing with a $1.2 million revenue shortfall in its current budget.
In Derby, Mayor Rich Dziekan’s administration said they relied on information from the Connecticut Conference of Municipalities and state lawmakers saying it was OK to include the distressed municipalities grant in the budget.
The distressed municipalities grant was part of Gov. Ned Lamont’s initial state budget proposal but was not supported by the state legislature.
Derby government was warned about this in May, hours before Derby adopted its budget.
An email from state Sen. Cabrera, state Rep. Kara Rochelle, and state Rep Mary Welander read:
“While we continue to work toward making sure Derby receives its fair share of funding we cannot say, at this point, with any degree of certainty, what the final level of funding will be until the legislative session adjourns on June 9,” the email read.“Therefore, we respectfully recommend that you do not use the Governor’s proposed budget when crafting Derby’s budget. A more accurate reflection (though not a final number) of municipal aid is what came out of the Appropriations Committee, which has yet to be confirmed by the full legislature and may still be adjusted through the budget negotiation process.”
At least three Derby Democrats – Brian Coppolo, Owney Malerba, and Marc Garofalo – all expressed concerns about using the distressed municipalities grant as Derby adopted its budget.
Why Include That Money?
The Valley Indy asked Miller why Ansonia thought it was getting the funding.
No questions about the money were raised during Ansonia during last spring’s budget process, Miller said.
Miller said the distressed municipality funding was included in an April 22 communication from CCM (the same communication Derby pointed to during its budget formation). A screen shot of that email is at the bottom of this story.
Miller said Ansonia’s budget process was in full swing by April. The numbers were discussed and dissected by both political parties and the public, he said.
The Ansonia budget was adopted May 11, about one month before the state adopted a budget.
Miller said prior to the Ansonia budget being adopted, no one said “don’t include distressed municipality funding.”
“If they (state lawmakers) knew, and were so confident that it wasn’t going to be in there, why would Kara Rochelle not reach out to one of the two communities that she represents, that are both distressed municipalities, and advise them of that in advance?”
Rep. Rochelle responded to Miller’s question with an email showing 12 Zoom meetings scheduled in 2021 with her, state Sen. Jorge Cabrera, and Ansonia officials.
Of the 12, five happened as scheduled; three are marked as “not attended by Ansonia without notice;” three are marked “canceled by Mayor Cassetti,” and one was canceled due to scheduling conflicts with the state lawmakers.
Rochelle said municipalities, including Ansonia, know not to base municipal budgets off the governor’s initial budget proposal because the numbers change. She noted CCM provides updates during the budget process, but did not advise municipalities to insert dollar amounts from the governor’s initial budget into adopted local spending plans.
She said that in 2019, Gov. Lamont proposed that towns kick-in for teacher retirement funds. That was killed by the state legislature – and it was reflected by the fact local budgets didn’t include Lamont’s idea.
“I attended monthly meetings where the city did not ask for advice or feedback on this matter,” Rochelle said. “I did not assume they were taking a different approach and needed better guidance, and had trusted that city officials – and particularly Kurt Miller who ran for Comptroller for the state of Connecticut and managed budgets in Seymour as first selectman – knew that he should not set state aid revenue projections on proposals instead of the final budget.”
Miller pointed to Rochelle’s monthly meetings with the Cassetti administration, including one that took place April 28.
“The city had been talking about our budget. There was a podcast on our budget. If she knew we were including money the state wouldn’t give, why didn’t she give us a head’s up?” Miller asked.
Rochelle said municipalities also have the option of checking with the state’s Intergovernmental Policy and Planning (IGPP) Division, part of OPM, for specific state budget questions.
The legislators killing state aid Ansonia and Derby need is the latest example of the state short-changing distressed communities, Miller said.
However, Rochelle said Ansonia received $152,832 more in state aid than the governor initially proposed. Miller said the state only plays “catch up” to past budget promises.
Miller said the city also recently learned, thanks to an email from the Office of Policy and Management (OPM, a state agency) that Ansonia will also not be receiving a separate, $139,000 state grant.
Miller said he didn’t budget for that money last year, but had hoped it would’ve come in as extra revenue to help with the shortfall.
Bad Timing
The former Seymour First Selectman said the budget issues show a fundamental flaw between town budgets and the state budget. Towns and cities are deep into budget planning, or even finished, by the time the state does its budget.
That leaves towns and cities guessing – which is why Ansonia is not following the local budget deadlines spelled out in the Ansonia City Charter.
Miller, at the urging of Mayor David Cassetti, informed the city’s tax board Jan. 3 that the presentation of a new budget for fiscal year 2022 – 2023 will be pushed from February to either late March or April.
The final budget will probably be adopted by mid-May.
The reason is because there are just too many “what ifs” and other unknowns and estimates that Miller says prevent creation of a more solid budget.
According to Ansonia’s own City Charter, the mayor is supposed to present his budget to the tax board “no later than the second Monday in February;” the tax board in turn is then supposed to submit a budget to the Board of Aldermen “no later than the second Tuesday in March,” and the aldermen are ultimately supposed to adopt a budget “no later than April 30.”
“It’s way too early to do a budget presentation by February, as there are so many numbers that are estimates at best,” Miller said. “The more time that we have to develop a budget, the more time we have true, concrete numbers. If the Mayor were to present a budget on Feb. 7 we would have estimates on state funding, and that’s just the beginning of the legislation session. We have estimates on some of our larger ticket items, like health insurance, liability insurance and pension estimates, but those are still in the estimate phase. It doesn’t make sense to put a budget in now until we have more concrete numbers.”
Cassetti said those budget deadlines are just not practical.
“I want to come up with the best possible budget I can so I can keep taxes reduced, and without the state figures, I can’t come up with that number,” Cassetti said. “The annual budget process timeline in the Charter is an antiquated document, and it’s not working.”
Mayor Cassetti is a Republican, as is the majority of the Board of Aldermen.
John Feddern, a member of the Democratic Town Committee, said that changing the budget timeline “is not the worst idea,” and would support a charter change.
He expressed concerns about why the city anticipated funds that never came through.
“If it were my own home budget, I wouldn’t put things in as revenue that aren’t coming in,” he said, “I’m not a finance guy, but for me, being a homeowner, I don’t plan that way. You can’t, because you’ll end up getting bit in the end. This seems to be endemic and we go through this a lot, with being a bit over budget and not making deadlines, it’s a little irksome.”
Schedule Provided By Rep. Rochelle
CFO Miller Provided This CCM Advisory From April 2021
Rochelle Provided This Email From CCM About Local Budgeting
Rochelle Provided This Document From The Office Of Fiscal Analysis Showing Actual Funding To Ansonia
