Is Derby in the Red?
The amount of money in the City of Derby’s Fund Balance – commonly referred to as the Rainy Day Fund – has been a hot topic for the past couple of years.
When the current administration took office five short years ago, the Fund Balance contained approximately $5 million dollars.
While the current administration continues to be elusive on the amount of taxpayer dollars in the Fund Balance, it now appears to be in the negative.
In October 2009, the Democratic Party disputed the amount within the Fund Balance, only to be left in the cold without any justifiable answer from those in office. The only answer that was ever received was from former Tax Board Chairwoman Carolyn Duhaime, who said it’s all still in the Fund Balance.
Finance Director Henry Domurad backed Duhaime’s claim by saying, “it’s all accounted for.”
As of June 30, 2008, audited financials revealed the Fund Balance was at $3,343,922, which is approximately $1.7 million less than the estimated balance when the current administration took office. (Documents are posted at the end of his commentary)
Where did $1.7 million go?
Exactly one year later on June 30, 2009, updated audited financials revealed the Fund Balance was exactly $1,528,421. This is only four months after Duhaime and Domurad claimed the money to be intact, which means there should have been approximately $3.3 million at the time of their statements.
However, independent, outside auditors indicated the Fund Balance lost another $1.8 million from the previous year. Where did that additional $1.8 million go and how could the Tax Board Chairwoman and Finance Director calculate so inaccurately?
At this point, it appears that approximately $3.5 million has been removed from the Fund Balance since taking office.
On Tuesday, June 15, 2010, amidst a gathering of Derby taxpayers at St. Jude’s Church, Mayor Staffieri, in response to a question on the amount of money in the city’s Fund Balance, said, “I don’t know, maybe $3 million?”
When the Fund Balance was approximately $1.5 million on June 30, 2009, Mayor Staffieri claimed the Fund Balance to be in the range of $3 million, which would have
meant the Fund Balance had actually increased by approximately $1.5 million since the June 30, 2009 audited financials were released.
Based on the above audited figures, that is clearly not the case.
To compound the City’s financial woes, when the Board of Aldermen voted on October 22, 2009 to settle the lawsuit with Ceruzzi over the seemingly flawed contract for the Downtown Redevelopment project, another $1.75 million was taken from the Fund Balance to pay for the settlement.
The Aldermen’s decision to settle with Ceruzzi was justified and correct, however, it appears Derby’s coffers contained less than was owed to Ceruzzi.
If the Fund Balance was $1,528,421 as of June 30, 2009 and the Board of Aldermen agreed to pay Ceruzzi $1.75 million on October 22, 2009, then it appears the City of Derby’s Fund Balance is in the red by approximately $220,000.
The audited financials for June 30, 2010 have not been released yet. It will likely show an extremely telling tale of the current administration’s tenure in office.
Editor’s Note: Rob Hyder is a lifelong Derby resident. He ran for Third Ward Aldermen in 2009 as a Democrat. The views and opinions expressed here are his own.
