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Ganim: City Showing Surplus, ‘Moving In The Right Direction Financially’

October 15th, 2016 · 48 Comments · City Budget, News and Events

Mayor Joe Ganim announced on Friday the $20 million municipal deficit inherited from predecessor Bill Finch has been erased for the budget year that ended June 30, an audit underway by Connecticut accounting firm BlumShapiro will show. And Ganim asserts the current budget year is also operating in the black following the revaluation of taxable property that produced a mixed bag of tax increases in higher-assessed neighborhoods, as well as holding the line and some tax cuts on other households. Ganim’s financial forecast assumes millions in union concessions for the current fiscal year that started July 1.

After defeating Finch in a September 2015 primary on his way to a November general election win, Ganim assumed office December 1 nearly halfway through an election-year budget crafted by his predecessor. Ganim and city financial officials pegged the budget deficit at $20 million. Ganim asserts audited figures expected to be released in a few months will show roughly a $600,000 surplus. The figures Ganim cites were presented by internal financial officials.

Ganim is reporting budget cuts amounting to total expenditure savings of $12.1 million, while new revenues generated by the city and administrative decisions added another $8.5 million to the Bridgeport treasury in the fiscal year that ended June 30, 2016.

“My administration took office halfway through the fiscal year and despite being told the budget was balanced, we discovered a real mess when we looked at the books,” said Mayor Ganim in a statement. “We made some very serious budget cuts, separated more than 100 city employees, fought hard to preserve our state municipal aid, and had to get creative about generating new revenue. And when the final audit is complete, we are expecting it to show that our measures worked! This was not easy to accomplish and we were really not sure we would balance the budget until a couple of land sales came through with substantial one-time revenue. I am grateful for the efforts of many people on my team and cooperation from many rank and file city employees who helped us save money where possible.”

The land sales the mayor referenced included the $4 million purchase of eight acres of municipal golf course property by Sacred Heart University that will allow the university a larger footprint to build on campus proper without developing the park land beyond basic maintenance. SHU needed the extra land to accommodate Fairfield zoning regulations. Fairchild Wheeler is owned by Bridgeport but located in Fairfield.

“The big picture is that within six months of taking office my administration not only erased a very substantial budget deficit of $20,000,000, but we actually ended the fiscal year in the black with a surplus of $600,000. This achievement is truly remarkable and combined with the new budget we adopted for the current fiscal year will go a long way towards stabilizing and strengthening Bridgeport’s finances. Difficult decisions had to be made but I am proud to say we are moving in the right direction financially.”

Overall, for the 2016 budget year that ended June 30, the city collected a total of $535,424,526 in revenue, while spending $534,527,763, according to figures released. Roughly $300,000 of that variance was expended on city libraries, resulting in a final estimated budget surplus of $600,000, according to city spokesman Av Harris.

Some of the steps taken by the Ganim administration to increase revenue between December 1, 2015 and June 30, 2016 include the following items:

FY 2016 Major Revenue Generation:
Sale of City Properties $6,700,000
Real Estate Conveyance Tax Collections Above Target $500,000
Accelerated Delinquent Taxes Collected $1,300,000
TOTAL FY 2016 New Revenue $8,500,000

Some of the steps taken by the Ganim administration to reduce expenditures between December 1, 2015 and June 30, 2016 include the following items:

FY 2016 Major Expenditure Reductions:
Personnel reductions (employee separations) $2,700,000
Refinance of G.O. Bonds (debt service savings) $3,500,000
Fire Union negotiated deferral of leave benefit $900,000
Milder winter/lower cost for supplies, utilities $1,400,000
Health insurance claims cost under-budget $1,000,000
Non-personnel budget lines frozen savings $1,500,000
Reallocation of prior year unused debt earnings $1,100,000
TOTAL FY 2016 Expenditure Reductions $12,100,000

On the new revenue side, the Ganim administration pursued aggressive action to collect delinquent taxes and rents owed the city from various sources. Real estate conveyance tax collections were also higher than anticipated by $500,000 and the city sold parcels of land to Sacred Heart University and the Steelpointe development corporation to account for another $6.2 million in new revenue. On the expenditure side, the early refinancing of General Obligation bond debt to take advantage of lower interest rates saved millions for the current fiscal year. The city also instituted layoffs of more than 50 employees, froze spending in many areas of the budget, negotiated deferred leave benefits with the city fire union, and was also aided with a bit of luck, enduring a relatively mild winter and lower health insurance claims for city employees.

Looking ahead to the current fiscal year 2017, Ganim is currently projecting a surplus of $2,500,000 – $3,000,000 if revenue forecasts hold. Ganim has committed to deposit any surplus generated into Bridgeport’s fund balance, all factors which could improve the city’s bond rating and reduce interest rates for future borrowing to fund major capital improvements, according to Harris.

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48 Comments so far ↓

  • Donald Day

    Paging John Marshall Lee. Paging JML.

    • Ron Mackey

      Paging David Walker.

      • Dave Walker

        Ron,
        I have been out of town with PwC helping various states and municipalities who want to transform and put their finances in order. It’s good the short-term budget gap has been closed but these are unaudited numbers. The City deferred making scheduled pension contributions. The real point is the City has yet to address its structural financial challenge that will only get worse with the passage of time. I am doing a lot of work in Michigan. That state is in better financial shape than Connecticut. It has Systems and processes to restructure the finances of municipalities outside of bankruptcy. It also has property tax caps. Connecticut doesn’t have these or other basic protections and it needs to adopt them.

  • Maria Pereira

    What this press release demonstrates is there was never a $20,000,000 deficit to begin with. Pure propaganda.

  • Ron Mackey

    Well, hopefully there are no smoke and mirrors with this report.

  • Frank the Cabana Boy

    A $23,000,000 swing in 10 months? Wow. That is nothing short of miraculous. #walkonwatermuch?

    • Frank Gyure

      Actually, this was a 23 million dollar swing in SEVEN months. Ganim took over December 1st, 2015 and this audit looked at budget ENDING JUNE 30th,2016. So this was a seven-month 23 million dollar miracle.

  • Steven Auerbach

    Absolutely amazing. This should shut up the Black Rockers … NOT! The road paving is so nice throughout the North End but looking closely it is so sad the curbs are in such bad shape. At what point does one bite the bullet and get the job done right so it will last for 50 years?! It does look good, though. I understand the State pays for Main Street.

  • Bob Walsh

    I’ll bet the folks in Black Rock are happy to hear the budget issues have all been resolved.

  • Gary Tobin

    While Ganim plays the game of inflating the actual city deficit to make himself look good, Malloy is playing the opposite game, “Connecticut is in good financial shape and getting better. Vote Democrat November 8, 2016.”

    ctmirror.org/2016/10/13/nonpartisan-analysts-ct-budget-is-78m-in-deficit/

    Can’t wait to hear the real numbers after this election. It won’t be any different than when Malloy was campaigning for re-election. When will we open our eyes so to see the writing on the wall, or does it matter?

  • John Marshall Lee

    Read the press release, again, please. Was there any mention of police pension or public safety overtime in all of this? And sale of public land seems to be the largest item able to be exercised by Mayor Ganim. Please read the budget pages and review “replenishment of capital” and you will see the ghost of Bill Finch arising in the words of Joe Ganim who poorly understands those same words. How can 50% of funds go to “replenishment” of City fund balance when you are using 100% of such funds to get to a balanced position? And the minor surplus is less than 50% of the land sales. Are there any teeth in any budget comments, because $4 Million forecast in the 2017 budget about givebacks seems dead from the comments of Ken Flatto. Yet spending goes on with a 2016 Bob Halstead raised and City Council authorized expenditure for the Main Street Majestic Theater to provide security is expanded to more than three times that amount and seemingly without bidding. Is this the first press release by the Mayor on a financial subject in the G2 reign? There was shoddy preparation of the 2016 budget that left expense obligations off the budget (that ultimately had to be paid and/or deferred) and overestimated State revenues that were known to be illusions.

    There is no City department chart of employees, usually issued with the annual Finch budgets, to see if or where any long-term changes have been made. Why is Ganim secret and silent on that measure?

    And after reviewing the past couple months postings in the MFR, Mayor Ganim might be looking under the green eye shade of the Finance Department to discover why proofing such public statements has not uncovered multiple errors. The confidence of this administration in its postings is a new phenomenon. Can you remember Finch’s financial folks making any prophetic postings about pending CAFR results? Is the Ganim administration now telling us the priority financial issue all along was building up an evanescent “City fund balance,” seen only once a year? Time will tell.

  • carolanne curry

    When you are digging out of the cellar after the Finch/wood storm, don’t expect to see the beauty of the rebuilt financial house until the foundation is secured once again.
    Since you trust no one in the G2 administration, it would almost seem pointless to tell you there certainly was a twenty million dollar deficit. The finance and opm departments knew it to be a fact as well. This step was just the beginning of the re-build.
    Nonetheless, the cynicism is understandable. John Marshall Lee and David Walker are more than capable fiscal analysts. I expect in the next year there will be acknowledgment the fiscal foundation is firm once again.

    • Dave Walker

      Carolanne,
      If you have a Wharton MBA in Finance then you can read financial statements. Bridgeport is a long way away from having a solid financial foundation. A one-year cash-based budget result says very little about the City’s fiscal future, especially when you use one-time revenues, defer pension payments, and rely on excessive and non-competitive mil rates to “balance the budget.” Don’t get me wrong, it is important to recognize progress but we have yet to begin to treat our fiscal cancer. We need to start very soon.

      • carolanne curry

        I didn’t say all is well with the gutted financial situation. I say UNTIL (that means at a future day and time) that foundation is more secure, we won’t see morning in America for Bridgeport right now.
        You can’t be picky and snarky about this to me David, with your need to see degrees before someone can speak with credibility about any fiscal matters.
        I am repeating. There was a twenty million dollar budget deficit. It was the passing baton from the Finch/wood administration. It was addressed and remedied.

        • Dave Walker

          Carolanne,
          I am not talking about my degrees. Someone on this blog asserted you had an MBA from the Wharton School. That may or may not be true but that was the basis for my comment. I am not a person who gets impressed by degrees. Practical experience and relevant professional certifications are much more meaningful.

    • John Marshall Lee

      Carolanne, my friend, why has Joe Ganim remained so quiet on his priorities? That was one of Finch’s tricks but at least he announced certain priorities and then failed to be routinely accountable. And finances were not his strong suit when he was talking about “green subjects.”

      Some of us are aware of one or more very serious overreach situations in the last year of Finch’s second term. Why have there been no revelations? Why have there been no consequences? To become a “second chance” Mayor, Ganim had to act in a manner to have felony charges stick to him, pay for the crime, and do the time. Why is he leaving predatory behavior that conflicts with City Charter, budget process, and probably State law from former personnel in responsible positions untouched? What is in it for him, if I may be so crude as to make that suggestion? Some folks are attributing such behavior to the fact G2 is up to his old tricks and without Mayoral priorities, public metrics John Gomes and you told us were so important 7-8 years ago, and a few good cases of messing with City money uncovered, penalized and public, can we count on anything changing? Why has Joe Ganim been so fiscally quiet for the past 10 months? Time will tell.

    • Lisa Parziale

      Now Carolanne I’m not fighting with you (wink). I trust everyone in the Ganim administration except Ganim and Mario Testa. With the exception of the newbies, I’ve been friends long before Ganim met a lot of you guys and gals. How would you feel if after working hard for a year to help get a person elected, and then that little person and his little friend stabbed you in the back? Just wanted to get that out to you in case you didn’t know because I know you saw me in that headquarters just about every day.

    • Ron Mackey

      carolanne, Donald Trump also brags about how smart he is and he also is a grad from Wharton, it must be in the water there.

  • Bob Walsh

    And Carolanne Curry, with her MBA from the Wharton School of business, knows numbers when she reads them.

    • Local Eyes

      And Bob Walsh, with his lengthy Councilman term, ignored numbers when they should’ve been addressed.

      • Bob Walsh

        LE,
        When I was on the council I was among the few who read the numbers. The other 15, 16, 17 members couldn’t be bothered. They just asked OPM a few simple questions and voted to approve.
        You on the other hand are a Johnnie Come Lately Trumbullite who doesn’t know his ass from his elbow when it comes to budgets.
        But you would make an excellent council member with your astute budget observations.

        • Local Eyes

          Bob Walsh, my awesome budgetary expertise includes digital office space in Boston and New York City. From there I operate two pro-Bridgeport Economic Development programs. Despite your legislative experience, you’re an OIB neophyte but I’ll give you a chance. When you know more about Bridgeport than I do, use these pages to show your superiority.

          • Frank Gyure

            AWESOME, does not even have the guts to use his real name. I don’t care that supposedly “everyone” knows his real name. Get rid of the handle and come back here with your real name. COWARD!!!

      • Frank Gyure

        Local Eyes, maybe Samuel Tedesco ignored numbers when they should have been addressed.

  • Frank Gyure

    I have one word for all of this discussion of the Finch/Ganim 2015-16 budget analysis. DUBIOUS.

  • Andrew C Fardy

    I have a better word. BULLSHIT.

  • Steven Auerbach

    I give Carolanne Curry credit for posting here. She uses her real name even though she is a member of the Ganim Administration. Everyone else has a handle, why??? I understand from Joe’s own lips he doesn’t read this blog. If he did, he would be happy to have your support.

    • Frank the Cabana Boy

      Ganim totally reads this blog. Please.

    • Local Eyes

      I’m proud of my handle. When this blog started, I wasn’t trying to fit in, I wanted to stand out. Today, this blog needs a longevity index that explains who’s been here the longest, who’s made the most posts and who uses the most words.
      Or as pirates used to say, “lower the cannons and let the battle begin!”

      • Frank Gyure

        COWARD!!! COWARD!!! COWARD!!! USE YOUR NAME OR GET LOST.

      • Jennifer Buchanan

        Hahaha–you go for it, LE.

        • Frank Gyure

          LONGEVITY INDEX. OMG, I am so impressed, along with all the links to the useless blogs, and the useless links, and the useless and worthless comments. Handles were for those who brought something substantial to this discussion. Coward and worthless.

          • Local Eyes

            Uh-uh. When it comes to Bridgeport, bravery and lasting value are my trademarks.
            At the start, handles were mandatory. You remain a newbie who enjoys Lennie’s good graces.

    • Ron Mackey

      Steven, Joe reads OIB and so does his staff. In fact if you are involved with Bridgeport politics, you are reading OIB.

      • Jennifer Buchanan

        Absolutely correct, Ron.

      • Steven Auerbach

        Ron Mackey, although I do agree with you, I will tell you Joe Ganim told me while having Lunch at Testo’s Pizzeria with his son and Danny Pizzaro that he does not read the blog. I have no reason to not believe him. If he in fact reads the blog, then at least he knows what his adversaries are saying. I was really just saying Carolanne Curry uses her real name on the blog and therefore everyone should be using their real name or it should be an option for all of us. Joe Ganim is no better off whether he reads the blog or not. It certainly doesn’t matter to me.

  • Jimfox

    Buchanan a Republican??? Her underwear is a Republican!

  • Bob Walsh

    One Saturday morning I posted something on OIB. That afternoon I ran into John Gomes at the Trumbull Shopping Park and he is refuting what I had said.

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