MERIDEN – City Manager Guy Scaife is calling the recent release of the city’s budget deficit by the finance department, originally estimated to be about $3 million, premature.
City staff are still in the process of analyzing financial information and data will be presented next week at a Finance Committee meeting.
“It was premature to release that and ill advised in that the number is not $3 million,” Scaife said at Monday’s City Council meeting. “I believe it is still a large number, but it’s not $3 million. It’s probably $2.2 million or $2 million on the low side.”
The initial deficit estimate was released last week by Finance Director Michael Lupkas , who said a shortfall nearing $3 million was possible due to reductions in state funding and overestimated revenues in the 2018 fiscal year budget.
Scaife’s 2017-18 budget went through several iterations during the budget process. Scaife originally proposed a $191 million budget, but $3.5 million in previously uncalculated expenses brought that budget up to $194.9 million. A $194.5 million spending plan was ultimately adopted by the City Council in late May, which required increasing to the tax rate to 39.92 mills, with an inner district tax rate of 42.04 mills.
While some city accounts are showing overruns, some revenue accounts are expected to exceed budget estimates, Scaife said, including the Building Department. City Planner Bob Seale said revenue from permits for Meriden Commons II and 11 Crown St. — two mixed-income housing developments planned for downtown — could bring in $300,000 in revenue not accounted for in his department’s budget. The permits are expected to be filed before the end of the fiscal year in June, and fees are calculated based on development type, value and square footage, Seale said.
City staff are still in the process of gathering financial information from departments on year-to-date spending and projections, said Lupkas, who noted projections are subject to change based on a variety of factors.
“Part of the forecasting is it’s a crystal ball. Things happen, good and bad, and you try to account for it as such,” Lupkas said.
When reached by phone Tuesday, Scaife agreed, stating many unforeseeable factors can influence the city’s budget, such as inclement weather, requiring snow removal, for example, and vehicle breakdowns.
”It’s November. We have a lot more of the year to go and things can change either way drastically, so we have to be real cognizant of where we are,” Scaife said.
The City Council Finance Committee will address the deficit at a Dec. 12 meeting where budget projections will be shared publicly. Officials will also be discussing ways the deficit can be addressed, said Finance Committee Chairman Brian Daniels.
“We’re all going to get a much more complete picture down to any line items that have material variances, positively or negatively, next week,” Daniels said.
City Council Majority Leader David Lowell described comments about the budget as “too subjective,” and hoped a close analysis of the city’s year to date financials would present a more accurate picture of the deficit.
“It’s hard to listen to people’s verbal commentary without seeing the details on how things are affected, so I think the story is going to be when we get the Finance Committee’s report that night where we get to see where the status of the various accounts are and what the impact currently is and what we project it to be,” Lowell said. “The whole story is the whole story, and that’s why we asked for a committee meeting for it to be revealed.”