The city’s financial report for the first five months of the 2015-16 budget year that started July 1 is a messy stew of excessive expenditures including roughly $6 million in police overtime, $2.4 million fire overtime, $1.3 million Public Facilities overtime, $2 million in pay raises not budgeted, $1.9 million for unused holiday compensation, sick and vacation time and $4.8 million in pension payments to the state not budgeted. Combined with shortfalls in revenue projection such as arrears tax revenue leads to a projected $20.7 budget deficit, according to a report to the City Council issued by Finance Director Ken Flatto.
City fiscal watchdog John Marshall Lee first alerted OIB readers to the latest financial report analysis. What follows is financial report expenditures that account for the majority of the deficit.
CITY OF BRIDGEPORT EXPLANATION OF VARIANCES, NOVEMBER 2015 MONTHLY FINANCIAL REPORT EXPENDITURES
In general, all departmental expenditure accounts are projected to meet the year end budgeted amounts, except where specifically addressed below.
Any expense that is known to have significant variance by the end of the fiscal year has been indicated and explained below.
• POLICE DEPARTMENT OVERTIME EXPENSES:
In aggregate, Police inside Overtime accounts are projected to be $6,159,253 over the FY 2016 adopted budget based on actual expenses of $5,405,514, plus $5,115,780 projected for the remaining seven months of the fiscal year. The overage in the Police Department overtime accounts is attributable to both vacancies of Police Officers this fiscal year as well as increases in the use of overtime. Please note that approximately $2.1 million in salary savings from these vacant officer positions will partially compensate this overtime overage by year end.
• FIRE DEPARTMENT OVERTIME EXPENSES:
In aggregate, Fire Department inside Overtime accounts are projected to be $2,404,031 over the FV 2016 adopted budget amount based on actual expenses of $2,259,747, and another $2,820,484 projected for the remaining seven months of the fiscal year. The overage in the Fire Department overtime accounts is attributable to increased use of overtime for Fire Fighters this fiscal year plus some position vacancies. Please note that about $1 million in fire fighter salary savings will partly compensate for the overage in the department overtime account.
• EMERGENCY OPERATIONS DEPARTMENT OVERTIME EXPENSES:
In aggregate, Emergency Operations Department ‘Inside’ Overtime accounts are projected to be $448,137 over the FY 2016 adopted budget based on actual expenses of $522,976, and another $623,604 projected for the remaining seven months of the fiscal year. The overage in the Emergency Operations Department overtime is attributable to added time due to turnover. Please note that the salary savings from these vacant positions.
• RETROACTIVE PAYMENTS FOR SALARY INCREASES:
Several contracts were negotiated in FY 15-16 for which raises and retroactive raises were not budgeted in FY2016. In total, $1,965,637 was paid out on November 30, 2015 to City workers in the Supervisors, LIUNA, and Unaffiliated employee groups. In addition, approximately $400,000 will be paid out over the next seven months for the ongoing current year portion of said raises.
• PUBLIC FACILITIES DEPARTMENT OVERTIME EXPENSES:
In aggregate, Public Facilities Department Overtime accounts are projected to be $1,342,801 over the FY 2016 adopted budget amount based on actual expenses of $884,982, and another $1,478,743 projected for the remaining seven months of the fiscal year. The overage in overtime accounts is attributable to increased use of overtime for this fiscal year plus potential winter costs based upon past experience. Please note that about $500,000 in salary savings will partly compensate for the overage in the department overtime account.
• PAYOUT FOR UNUSED HOLIDAY, COMP, SICK AND VACATION TIME:
In aggregate, unused compensation accounts are projected to be $1,899,000 over the FY 2016 adopted budget based on actual expenses of $1,764,000, and another $1,174,000 projected for the remaining seven months of the fiscal year. The overage in these payouts is attributable to added payout of unused time due to turnover as well as additional costs due to the level of retirements in this year.
• POLICE MERF PENSION AMORTIZATION:
A $4,835,573 payment was required to be made to the State of CT MERS pension system for Police pensions from Pension B Police officers who are now covered under the State plan. This amortization payment is the first of twenty six annual payments in this amount due to the State system for all such police officers past service years covered under their pension plans. This amount was not budgeted in FY 16. (Please note a similar amortization payment was made for the Fire Pensioners to the state, of approximately $2.7 million and this was properly budgeted In FY16).
• CITY MERF PENSION CONTRIBUTIONS:
The City Is required to pay monthly to the State MERS system an amount for all employees currently enrolled In pension plans based upon a percentage required by the state (of between 12 and 15% depending on union). Monthly payments are running over budget by approximately $325,000 per month, in aggregate. City current pension MERS accounts are projected to be $3,878,010 over the FY 2016 adopted budget. Much of this increase is due to unbudgeted pension earned obligations charged against overtime paid to city employees.
• CITY SIDE SAVINGS:
There are several City budget lines which are projected to come in under budget, in particular, approximately $1.5 million is projected to be under budget due to health insurance claims running lower than budget. Further it is projected City discretionary spending will be held $750,000 under budget. Finally the City has a $1.5 million Contingency budget which will be used to cover shortfalls incurred above.
OIB readers of all persuasions, if you are a Bridgeport taxpayer, how do these narratives look to you from the expense side of the City budget? Too many people have recently said they may be made-up, or are political figments rather than real world.
This article comes from the City Finance Director, Ken Flatto, and the narrative statements accounting for expense variances as of five months completed of the 2015-16 budget year. The November monthly financial report also has a REVENUE section with variances showing almost $6 Million less in projected revenues than were in recommended by past OPM and Finance Department leadership AND VOTED UPON BY THE CITY COUNCIL.
As an advocate of OPEN, ACCOUNTABLE, TRANSPARENT and HONEST governance process, this is PROGRESS in identifying some of our fiscal problems. Thank you G2 for taking a significant first step. This report will be on the desks of the Budget and Appropriations Committee next Monday evening when they meet. Will their approach to budget review change from past meeting’s indifference? Will other doors and windows come open to share issues and concerns of a fiscal nature? We hope so. And how do we get the CC better prepared to deal with such material? Time will tell.
Where is Tom McCarthy and the City Council? Where is Denese Taylor-Moye and her Budget Committee?
Where are the financial consultants who are in the budget?
Ganim can blame Finch but the real blame lies with Tom McCarthy and his City Council.
Bob Walsh, as long as you are calling on Tom McCarthy for some ACCOUNTABILITY, in an HONEST fashion, in an OPEN forum and TRANSPARENT response, I thought I would add what I wrote earlier today under another heading when Harvey W. was praising Tom to the skies.
Harvey, I respect what you have to say most of the time. But today I would ask you to back up your comment on how much Tom McCarthy “loves this city and is an asset to it.”
Please include commentary on how he has abused the Stipend system by knowing the system and the Ordinance are at odds and have been, failed to provide the City Council with full and complete info when they faced decisions time and again, how he allowed confused, complicated and inaccurate financial reports to continue to B&A when he had the power to change, and how his personal activity stripped the Council of any independent backup they had to support questions, research and structural check and balance by the body he was elected to lead? By the way, did McCarthy care about getting former City Council member and at the time Legislative Aide Tom White the best exit package possible? And what does McCarthy have to say at this time about Bucci representing White in two cases against the City that may cause added financial damage? Is Tom’s fame because he’s a smiley guy with little or no need to be accountable? Has he received his exit package already by the steep increase in his pay levels over the years? How is that done, by the way? Perhaps the “cat has his tongue?” Tell us about the Airport driveway. Time will tell.
Here’s a compromise.
If McCarthy and the other city employees want to keep their jobs and seat on the city council, they should enter into an agreement with the city not to run for city council as an employee after their term has expired, they’ll be grandfathered in for the next two years on the council. But if they refuse the compromise, expect to be removed from their city employment.
In the case of McCarthy he would also rescind his Finch raise.
Jim Fox,
Why do we need a compromise?
The bigger problem is what happens when a city employee runs for City Council next year.
Both you and Ganim’s solution does not deal with that, does not prevent or discourage that and in some ways might encourage such actions.
Neither to me is an acceptable compromise.
To JML’s point,
You seem to be laying out grounds for Ganim to terminate Tommy Max. Is that what you are suggesting?
Add to your list of potentially fraudulent time keeping. I would bet Tommy did not account for his time properly.
City Council phone calls at work from constituents or other City employees? Press Conferences? Meetings? Etc.,
but then again maybe Ganim wants to be very accommodating with Tommy Mac’s termination. You scratch my back and I’ll scratch yours.
Airport Commission?
City Hall Committee?
Check his emails and cell phone records.
It’s easy enough to see if he was doing non-city business on the taxpayers’ dime.
Something’s rotten in Denmark.
*** Finch would ask the city workers to give back concessions of two weeks’ vacation time; then they would make it up by working lots of O/T. *** What a way to run a city and all behind the Eco-Mayor disguise and the moving Bpt forward BS! *** GOOD RIDDANCE ***