1) A budget is a tool to guide management to monitor revenues and to ensure spending does not exceed their targets. In private industry, the end goal is to realize a profit to reward shareholders and employees. This also builds a solid cash fund to grow the business for future years. In municipal government the end goal is to establish a small surplus and also build a cash fund.
2) The current City administration has depleted the $12 million cash fund it inherited back in 2014. In 2021 the City bonded $11 million to replenish this fund without taxpayer approval.
3) In 2021, the City administration used two accounting gimmicks to report a surplus: a $600,000 bond premium and a $900,000 give back from the Board of Education. Questionable accounting practices.
4) The City reported a $2.8 million revenue shortfall for 2022. Expenses were down $1.9 million resulting in a $860,000 deficit, which is a significant miss for an administration in charge for over ten years experience and a full Finance staff.
5) The City states the fund balance will drop to $3.8 million as of July 2022, which indicates that $7.2 million of the bond monies have been spent. Where and why?
6) The City is more than ten months into fiscal 2023. Taxpayers need to see a realistic estimate for 2023 and compare this to the proposed 2024 Budget. Comparing the 2024 Budget to the 2023 Budget is intentionally misleading taxpayers. The Mayor did not label the 2023 column as Budget because he wants taxpayers to assume that these are actual/projected numbers.
7) I expect the City to show a similar $1 million deficit in 2023 based on current revenue and expense trends. The City is delaying reporting the 2023 deficit to make next year’s Budget appear normal.
8) With all of that said, I don’t believe very much effort was put into the 2024 Budget even though it is almost three months late. Revenues and Expenses are projected to increase approximately $4 million each. The Mayor’s Budget has some wish lists in it. The most glaring one is $5 million for “Use of Future Revenue”. By future I believe they mean borrowing another $5 million and increasing the City’s debt to $26 million to be paid long after most us are no longer living.
9) The City has a long record of running cash deficits and borrowing from the future. In the last ten years, the City’s commercial and industrial growth has been flat when factoring in the $20 million of tax abatements. The Mayor keeps promising miracles but has not delivered much in actual growth.
10) I actually like the Mayor’s budget and hope it’s approved in its current state. The City will maintain its winning streak of revenue shortfalls and wasteful spending with the likelihood of moving Ansonia to the #1 ranking in the most distressed cities in Connecticut.
11) In November, the taxpayers will need to decide whether to continue with the mirage of smoke and mirrors or vote in a new Mayor that will instill strong financial policies.
12) God bless the taxpayers of the City of Ansonia as you will be left holding a bag of IOU’s.
Richard Tylinski
Ansonia
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