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Does New London Have A Budget?

Differing opinions on 2013 budget following unusual votes last week

City councilors had differing opinions on New London’s budget situation following a complex charter process last year that put off a vote challenging the budget until after the end of the end of that budget year.

By some interpretations, the council should not be able to spend beyond the approved 2012 budget. By others, the council correctly addressed the petition presented to challenge the 2013 budget but the unusual situation invalidates the challenge.

Council President Michael Passero also said he considered that the city will be able to operate on the $42.3 million municipal budget, which includes a 5.1 percent tax increase.

“I think the city’s probably on good grounds just operating on the budget,” said Passero. “It went through the whole process under the charter.”

Mayor Daryl Finizio said he consulted with Law Director Jeff Londregan and Finance Director Jeff Smith on the issue. He said he considered that the budget remains in place because it was never repealed by council vote.

“The city must operate we have to have a budget to guide us and I believe that budget is the adopted budget [of Oct. 9],” he said.

“We have to stop spinning our wheels”

Passero said approving the ordinance as an emergency measure would have ensured an operating budget during the referendum process. He said the council’s failure to approve this safeguard puts the budget in limbo. However, he said the council did take the steps outlined by the charter for the referendum process. He said it is not the first time a matter has been delayed to a November vote, noting that there was not a consensus to hold a special election on charter revisions that ultimately passed at the regular election in 2010.

“The council did exactly what it was supposed to do and as a result of that the referendum is not until after the fiscal year is over…Because of that it’s essentially moot," he said.

Passero said there is nothing to prevent the question from appearing in November of 2013, but that he did not consider that any action could be taken if the budget and tax rate are overturned at that time. He also said that state law allows cities to continue operations under the prior year’s budget if a determination is made that a budget is not in place, although in this case the 2012 budget includes greater expenditures than the 2013 budget.

“The problem with last year’s budget is there’s not enough revenue,” said Passero, “so we would obviously have to cut quite a bit to bring the services and expenditures within the revenue.”

Passero said he would have preferred to have a special referendum vote in December or to accept the 2013 budget as an emergency measure. Councilor Don Macrino said he would have liked to see the council accept Londregan’s opinion, which stated that no action could be taken on the petition. Macrino said he thinks the city is reaching a point where referendums could cripple the operation of municipal services.

“Five percent in my mind is as good as we’re going to do as far as the taxes are, and I think we have to stop spinning our wheels and move forward,” he said.

“The whole thing is crazy”

Councilor Adam Sprecace said he thought the Monday vote to accept the petition scrapped the 2013 budget.

“I don’t believe we have a budget in place officially right now…We’re in the same situation we were in when we were waiting for a referendum the last time around,” he said.

Sprecace was in favor of having the council make further reductions without sending the budget to referendum. He said such action would have satisfied the charter requirements and that some further savings could be found in areas such as vacant positions.

“I was discouraged to see that vote fail and that it got sent out to referendum,” said Sprecace. I guess my second choice would be to have a referendum much sooner than the one that was actually scheduled.”

Sprecace said he also hopes the council might be able to reconsider the vote on approving the budget as an emergency measure to ensure that it is in place. Councilor John Maynard, one of two councilors opposing that action, said he was unwilling to approve that action because he considered it akin to supporting the budget.

Maynard also said he would have liked to have the council make further reductions last Monday. He said he was uncertain which budget the city will have to go with after the council votes on the matter.

“My belief was that we have to go with last year’s budget, but I was told, ‘No, we can go with the budget the council passed and go with the referendum later,’” said Maynard. “The whole thing is crazy. We could have addressed that Monday.”

A complex process

The council went against Londregan’s opinion in accepting a petition against the budget. Londregan said that based on prior decisions, he interpreted the City Charter language as directing that further challenges to the budget are not permitted once 25 percent of the prior year’s budget has been expended.

However, the council did not muster enough support at its Monday meeting to act on reducing the budget at the council level. The council also fell one vote short of the majority needed to set an early referendum. The charter instructs that the referendum must be set at the next regular municipal election if a special election does not occur, meaning the budget vote has been scheduled for November of 2013—four months after the end of the 2013 fiscal year.

The council also fell one vote short of the majority needed to pass the budget as an emergency measure. The charter allows such action by a six-sevenths majority in matters considered to be “urgent public need for the preservation of the public peace, health, safety or property.”

Councilors who voted against any of the measures may ask to bring the vote back up for reconsideration at the council’s next meeting on Nov. 19.

The council passed the on Oct. 9. This represents a 5.1 percent increase over the 2012 tax rate. The decision followed a Sept. 18 referendum in which voters rejected a $42.3 million budget with a 7.5 percent tax increase.

The first tax bills sent out for the 2013 year were based on 2012 taxes because the budget process had not concluded in time for the bills to reflect any changes. Any changes to the tax rate will be reflected either in the second tax bill in the year or in a supplemental bill issued in the spring.

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Carol D. Fox November 13, 2012 at 02:36 AM
@Sue: What time is the meeting? Where is it? I might be able to get out Wednesday.
Carol D. Fox November 13, 2012 at 02:39 AM
@Spencer: I think it would depend on what is in the Contract. If the Contract indicates that it is contingent on the budget, then I would think, it could be invalidated. If it is not, and I bet it is not, then the contract would stand.
Sue P. November 13, 2012 at 02:47 AM
7:00 at the Senior Center this Wednesday
Bill Generous November 13, 2012 at 02:50 AM
Those running city government seemed to have looked for mulitple questionable ways to deny a budget referendum vote that means something. Here is what many other towns have done in the past to shorten the referendum process: Have another referendum vote soon with a lower budget total but keep the tax rate the same as previously agreed upon. The expected additional net revenue from a material but not excessively lower proposed budget total would be expensed as a contribution to the General Fund reserve account. Taxpayers are less inclined to rush to the polls to vote NO since it won't reduce their taxes any further this year (it may lead to reduced taxes in future years). Referendum voters would still have a say with regard to spending and some might even feel their voice on budget issues is being respected and not be so inclined to automatically vote NO in future years because of how this year has played out to date.
Emily Kendall November 13, 2012 at 12:22 PM
At least we now know which 4 city councilors should not be re elected and which 3 should be elected again.

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