City Council To Vote On Bond Refinance Expected To Save $3 Million

The City Council Tuesday night is expected to approve the refinancing of municipal bonds that Finance Director Ken Flatto projects will save at least $3 million for the current fiscal year to help close a budget deficit initially pegged at $20 million for the year ending June 30.

The council will vote on a Budget and Appropriations Committee Report approving “2016 General Obligation Bonds/Bond Refunding and Bond Issuance.”

Flatto, the former first selectman of Fairfield and a certified public accountant, says the estimated interest rate is expected to come in at 2.2 percent to refinance existing old bonds between 4-5 percent. Morgan Stanley was chosen as the underwriter through a request for qualifications.

Flatto adds that $6.7 million in new bonds will be included “to finance capital equipment & projects neglected past 3 years” including a fire ladder truck to replace a 24-year-old truck, a station alerting system to replace an old one about to go, $1.5 million for street paving, and new police cars for first time since 2012.

Also on the council agenda is a referral to the Miscellaneous Matters Committee regarding a communication from the City Attorney for  a “Proposed Settlement of Taxes Relating to 889 Barnum Avenue and other Related Matters, including but not limited to a Certain Pending U.S. Bankruptcy Case: Remgrit Realty, Inc.”

The city has been in negotiations with Remgrit principal developer Sal DiNardo to resolve a tax dispute for the East Side property next to the proposed site of a new railroad station first proposed by the mayoral administration of Bill Finch.

The council will meet Tuesday night, rather than the traditional third Monday of the month, in observance of Martin Luther King Jr. Day.

Full City Council agenda here.

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16 comments

  1. Lots of meat on the Council table on Tuesday night but you don’t realize how much because none of the Agenda resolutions tell you much about the $$$ details. Why not? Well for one thing they have not done that in the past, and that has worked out, hasn’t it?
    Seriously, you need to let your Council members become aware of your dissatisfaction with this state of affairs. I will mention it again on Tuesday evening. It’s all about TRANSPARENCY, isn’t it?

    One other thing, when you get a new family car with no trade in, do you usually:
    _______Pay cash?
    _______Borrow through an auto loan with a duration of 3-5 years?
    _______Lease the vehicle?
    _______Find a bank that will let you set up a 20-year loan to payoff the vehicle?

    If I indicate the City is planning on using the last alternative, do you agree with their choice? Will you explain why and share the total expense for the interest paid over 20 years? Time will tell.

  2. Frank,
    Can I ask you to expand on your brief comment?
    I have no idea whether “big deal” references a response to the article by Lennie or something in response. And also no idea whether “big deal” is sarcasm or something else.
    For instance when you say the “State gives city $200 million per year,” I take exception. The City of Bridgeport receives from State taxpayers $200 Million (or more) most years, but it is not for City-side use but rather for the BOE.

    A number of folks have been saying for years New Haven and Hartford Education Boards get more for their systems, without acknowledging Bridgeport taxpayers (a sorely treated group by past administrations and Councils) are putting in around $2700 per local student annually while the the other two cities fund around $4500 per student. Is it unreasonable for funding authorities to provide less where local politicians are unwilling to fund a fair and just system? Time will tell.

    1. John,
      Most respectfully, I do know you ask questions, which is important to probing the issues facing Bridgeport. But we all need to start providing the answers. My comment in regards to BIG DEAL is we face, essentially a $200 million shortfall ANNUALLY, in providing the services Bridgeport faces. Whether it be BOE or Pensions or WHATEVER that needs to be paid for. Parsing the budget lines takes us too far away from the big picture. Talking about 3 million versus the 200 million we get every year. A vast difference.

      1. And the work of Mr. Flatto will need to be increasingly scrutinized. He will find working on the Budget of the City of Bridgeport is vastly different than when he worked with our neighboring Town of Fairfield.

    1. Frank, I am happy you are shining light on City fiscal subjects. The deficit we are facing through June 2016 is most definitely a Finch, Sherwood, Kelly-Lenz production, not Ganim Flatto as you would suggest.
      When you enter office midway through a fiscal year and become aware of serious over projection of several revenue line items, double counting of one revenue item, and the failure to include the extra costs for the Police Department’s entry into the State MERS pension plan, you have to hold those who created the mess responsible, don’t you? To the extent Flatto comes up with some solutions while the new administration reorganizes the employment chairs and people in them, there will be less ultimate blame on Finch. However, it is entirely possible we will have to use the remaining balance of our City Fund Balance that has been hovering around 2% or Operating Budget rather than a healthy 8%. If we drop to a 0% City fund balance we will face more short-term borrowing at least, and become even more limited in providing services. Let’s see what Ganim deems as priority needs and what his suggestion is for next year. At the same time look for what is uncovered and/or discovered about the balances in Capital Accounts, money that has been borrowed after CC authorization, but which neither they nor taxpayers ever see an accounting until the account is complete including all the money spent. And we also need the City side Grants budget to become TRANSPARENT for all to see. I am informed on the City side most grants we receive are ones we deserve as a right for some reason and we do not compete for them, but we do spend taxpayer money first. Then we are supposed to file timely with the GRANTING agency in correct fashion as directed to be REIMBURSED. When the City fails to file, or does so improperly or untimely, we have spent City money and failed to receive monies that are due us. Want to know more about this? Ask and let’s hear what the new administration has to tell us. Time will tell.

  3. John, do you have any information regarding the distribution of tax dollars between the various departments/school systems in Hartford and New Haven city budgets? Any information on their grand lists and tax$-collection numbers?

    How can (especially) Hartford and New Haven afford to outspend Bridgeport by $1800 per student?! Where is that $ coming from?! More importantly, how could Bridgeport afford to match those numbers without a very significant tax increase?

    Bridgeport is clearly being short-changed by the state–and there is simply no excuse for that. The education funding formula doesn’t account for the Bridgeport-centered poverty in otherwise affluent Fairfield County and doesn’t account for the Fairfield County cost-of-doing-business differential. It is a fundamentally flawed formula and Bridgeport’s education kick-in shortfall doesn’t even come close to justifying the huge, state funding differential between Bridgeport, Hartford and New Haven.

    The state cheats us because we let them get away with it. The state is constitutionally mandated to fund public education for all its school-age population at equitable, adequate levels over the whole state. They haven’t been complying with that mandate in regard to Bridgeport. Period!

  4. Jeff, there is a case in court that just came on the docket after years in waiting that could be addressing Bridgeport’s shortfall in particular. It was in the Post a couple of weeks ago. I believe it is on the magnitude of Sheff v O’Neill. That should be followed closely.

    1. I have very significant doubts the Flatto budget deficit is a 100% honest decision to start open,transparent decision-making over budget matters. As a political strategy, it will also become VERY HANDY to blame property tax increases on this $20 million piece of a $500 million+ budget on the former administration. I will look into my crystal ball and due to the extreme diligence of Mr. Flatto, we will see a budget surplus with a mil rate decrease in about 3 years–just before the next election. I think politics drives the Flatto deficit far more than any adherence to strict accounting principles and ethics.

  5. Frank,
    Call me, 203-259-9642. Let’s talk. You are barking, but that is only part of it, actually the easier part. Looking at the material over time and finding the answers to questions raised in the past finally is where the bite comes in.
    Readers of OIB can go back in the archives, if you wish, to determine the first time I asked whether the funding of Public Safety retirement plans with MERS, especially because of major overtime use, was going to cost the City more. The answer was never provided, until we were told by Flatto, (not Kelly-Lenz or Sherwood, or Mayor Finch) an increase was in the budget for Fire, but not entered for Police and with an added assessment of $3.6 Million for overtime funding it made for nearly $9 Million of added pension expense ignored by OPM budgeting. That part is not phony from my point of view. Of course there are many moving parts that demand lots of accountability and oversight. Who will provide that? Or help with oversight? Who will substitute some facts to support negative future projections that may merely mask cynicism? Time will tell.

  6. It seems Mr. Flatto left no stone unturned in this bid to create this deficit. Let’s break it down. I will confess I would have to do more research in the $5.6 million part due to overstating of city revenue. The $3 million in rents unpaid from the Webster Bank Arena, Harbor Yard Ballpark and Captains’s Cove were no secret. Yet, will taxpayers foot this bill because it was included in this “deficit?” Is this not a matter between the City and those entities that are in arrears in rents and are these matters not solved either through negotiation or, ultimately, in courts? The LARGEST chunk of the $20 million is, indeed, in the unfunded Police Pension. Is it not feasible that the City should go back to the Police Union and re-negotiate this undue and possibly unpayable deal with the Police Union? The City of Bridgeport is not alone in the huge problem of unfunded pensions. Can we look to how the City of Providence re-negotiated their under-funded Pension issue? Again, why should the people of Bridgeport pay this highly expensive and very suspiciously expensive Pension. The police also added $5.5 million in overtime costs usually resulting in making many of the police officers the most highly paid employees of municipalities. I have not researched salaries of Bridgeport municipal employees but possibly someone else has that info. So out of this $20 million deficit, $14.2 million is related to the Police Department. The same Police Union (whose members make up the Police Department) who, very publicly and proactively, supported Joseph Ganim in his bid for election. MOST of the discussion in the press and by the financial team headed by Mr. Flatto has been the $2.4 million in retroactive pay raises MANDATED in a contract with the Supervisors Union. This was all pictured as Bill Finch giving himself a huge raise on the eve of his departure. Much less is said that it also includes 150 union members and 60 non-union members. Some of these members actually sit on the Common Council. Mayor Ganim may or may not have refused the extra pay but the official salary of the Mayor of Bridgeport is set at the new higher rate. Much effort and attention has been paid to this $2.4 million yet it remains the SMALLEST part of the $20 million. Should not more effort be made in clawing back the $14.2 million that is going to the Police? Should not the $3 million late rents be taken off the table and be dealt with in the proper manner in which back rents are resolved? The more I know about this $20 million Flatto deficit, the more I sense it is lumps of monies everyone knew about, but suddenly we (the people of Bridgeport) will be forced to pay for even though there are other means of accounting for them.

  7. Additionally, the Ganim administration is putting the supervisor’s contract under a microscope to see if there any loopholes to void it. No similar effort is being made in terms of the $8.7 million police pension and asking for accountability from the Bridgeport Police for the $5.5 million in overtime. No discussion on the $3 million in rents in arrears. And is not the issue of undelivered state aid a continuous issue since the city sets its budget before we actually get state dollars and we are always left with essentially guessing what we will get from the state?

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