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WEST HAVEN, Feb. 28, 2019 — The City of West Haven has produced its first budget surplus in many years and has a positive fund balance for the first time in well over a decade, Mayor Nancy R. Rossi announced.
Rossi has released the audit report covering fiscal year 2018, which closed June 30, 2018. The report showed a surplus in the general fund of $3,144,027, resulting in a positive fund balance of $2,181,149. The audit also reported surpluses in the City of West Haven Fire Department Allingtown and sewer funds of $539,409 and $1,833,451, respectfully. The audit was conducted by PKF O’Connor Davies LLP of Wethersfield.
“This is an important benchmark for West Haven, and this shows that we are willing to make the tough decisions to live within our means,” Rossi said after releasing the audit. “West Haven has not had a positive fund balance in a long, long time. This will show the state, our business partners, and our residents and taxpayers that we are serious about a healthier and better fiscal future.”
The City of West Haven was facing an estimated $2 million deficit in December 2017 when Rossi took office.
“When my administration took office, we faced another potential multimillion-dollar deficit, even with an anticipated $8 million restructuring grant from the state Municipal Accountability Review Board (MARB),” Rossi said. “There was a shortfall left from the deficit bonding prior to me taking office and another operating deficit in 2017, as well as health care and retirement costs that were out of control and over budget.”
Rossi added: “My first decisions in office were unpleasant and difficult. They included eliminating programs and positions, furloughing city employees, and reducing employee hours to part time to save money and reduce our growing health care costs. We also instituted a spending and overtime freeze for nonessential tasks and canceled popular community events — and not because we wanted to but because we had to.”
The fund balance in the 2017 audit was a negative $18 million — $18,138,674 to be exact. Former Mayor Ed O’Brien’s deficit bonding generated proceeds of $17,175,796 on his way out of office after running four consecutive deficits totaling more than $10 million. The deficit bonding, by state statute, also triggered state oversight by the MARB.
The audit also showed significant improvement in two other governmental funds that had a history of running deficits and carrying negative fund balances. The Allingtown Fire Department entered fiscal 2018 with a cumulative deficit of $658,268. The current audit shows a surplus for 2018 of $539,409, which reduces the cumulative deficit to $118,859.
“The Allingtown taxpayers have seen many years of tax increases and have sacrificed,” Rossi said. “We have worked hard on the Allingtown Fire Department budget, and the good news is that we expect to eliminate the longtime cumulative deficit completely this fiscal year. We have instituted budget and spending policies that require extensive monitoring. We want the taxpayers to have confidence that their hard-earned tax money is being spent properly, and of course we need to stabilize the tax rate.”
The Water Pollution Control Authority (WPCA), which manages the sewer fund, also experienced a surplus for the fiscal year in the amount of $1,833,451. The surplus will completely eliminate the on-going sewer fund deficit and provide a healthy fund balance of $1,757,460.
“We instituted fiscal policy and budget monitoring early in my administration for the sewer fund,” Rossi said. “The WPCA administrator and his staff have done a great job operating the plant, offering suggestions for efficiency — and all within budget. I believe our plant is one of the best run in the state, and I want to thank them for their efforts.”
“The City of West Haven is much better positioned for the future with the operating and budget changes introduced, resulting in a more efficient and effective government and a budget surplus,” Rossi said. “The surplus and positive fund balance will allow for a budget reserve (rainy day fund) and help us improve the city’s bond rating, which is one of the worst in the state. Our goal is to grow the fund balance (rainy day fund) to 5 percent of the general fund budget, or approximately $8 million, over the next five years.”
Rossi added: “I know some of the decisions that were made were unpopular and required sacrifices by our city employees, our Board of Education staff, and our residents and taxpayers; but I believe that because of those sacrifices, we have set the path to success and set future expectations. I want to thank the city and Board of Education staff for their many past and continued concessions to help get the city back on track.”
“This audit will demonstrate to our prospective and current business owners and our residents and taxpayers that we have heard their concerns loud and clear, and that we are serious about the future and growing our community,” Rossi concluded.