The recent move by the O’Brien administration to transfer $10.5 Million from Water Dept. cash reserves to cover an erroneously perceived $10 Million General Fund deficit is troubling, unprofessional in the way it was handled and in my estimation, illegal according to our Charter. Why?
I called the Water Dept. Director and was told by him that he was not allowed to answer any questions about the transaction; I was directed to the Corp. Counsel’s Office. Guess who ordered the “gag order?” There was no reason to call a Special Meeting; this was done deviously to disallow public participation. Outside counsel was used to rule that the transfer was legal, a ruling that that the Council received a few minutes before the meeting. Other information was held back from the Council until the meeting started. Imagine if Mayor Stewart had done this! He would have been crucified by the Democrats!
Section 10-4 of the Charter was violated since there was no public hearing. Also, Section 15-4k
There is no logical reason to make these budget transfers now. The Council will have to go through a similar exercise in September to close out the FY 2012 books. This was pure trickery, an obfuscatory distraction from what O’Brien did with the Water Dept. transaction. If anybody is interested, I believe that any interested citizen taxpayer could FOI the information.
The use of Water Dept. funds by the Stewart Admin. was completely different, completely legal and with no trickery.
Many people have commented on the Herald on-line about the $43 Million fund balance - it doesn’t exist! It was one of the things I was going to ask the WD Director but of course, he had been gagged. It was a little over $20 million and with this O’Brien trickery, it is now less than $10 million. The move will seriously curtail
WD infrastructure improvement projects. By balancing the budget this way and making such a public spectacle of it, I believe this has possible serious consequences for New Britain. I predict the City will certainly be downgraded the next time they go out for a bond issuance (usually happens in April). Rating agencies look unfavorably on this type of practice - New Britain’s bond rating was declared solid in 2011 because the City did not dip into fund balance despite hard times.
Lou Salvio
Saturday, February 25, 2012
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8 comments:
Only a few people actually give a damn Lou. Most of the people here in the city could care less what is going on around them. They vote the way they are told to and the rest is just a crap shoot. And crap we have at the helm. It's a disaster.
It appears that Pullman and Comley, the law firm that helped structure this scheme, was hand picked by the Governor's chief of staff Andrew McDonald.This coupled with the fact that Sherwood appointed his wife and friends to the Water Commission makes this entire affair reek of corruption.
Anonymous said...
Only a few people actually give a damn Lou. Most of the people here in the city could care less what is going on around them. They vote the way they are told to and the rest is just a crap shoot. And crap we have at the helm. It's a disaster.
DEMOCRATS ARE A BUNCH OF MINDLESS ROBOTS WHO VOTE HOWEVER THEIR UNIONS AND THEIR SOCIALIST LEADERS TELL THEM TO VOTE. VERY FEW ARE EVEN CAPABLE OF FORMING THEIR OWN OPINION OR THINKING FOR THEMSELVES.
If this was a Republican administration The Herald would be right on top of this mess, and it would be the one filing an FOI request. As it stands, they will ignore it, and even go so far as to provide cover for the Lib Dems if need be.
Lou, are you just figuring out that the Herald is so liberal that they will not report bad stuff about their fellow liberals? I have read in the past that they lean so left, that if they leaned any further they would tip over.
Hey am I reading this right? This means that they are paying for the GO bonds.
Meaning for next year's budget, the General Fund will have to pay the interest and debt on the bonds that paid for the filtration plant, without any funds from the Water Dept.
Meaning this puts them in a BIGGER hole next year in the General Fund, in a reval year. It also means that NB Taxpayers will now assume paying for the bonds , a payment that usually comes from Water Dept. reserves.
Am I missing something???? Or is this classic putting all your bills on a credit card?
" Anonymous said...
Hey am I reading this right? This means that they are paying for the GO bonds.
Meaning for next year's budget, the General Fund will have to pay the interest and debt on the bonds that paid for the filtration plant, without any funds from the Water Dept.
Meaning this puts them in a BIGGER hole next year in the General Fund, in a reval year. It also means that NB Taxpayers will now assume paying for the bonds , a payment that usually comes from Water Dept. reserves.
Am I missing something???? Or is this classic putting all your bills on a credit card?"
The comment above is absolutely correct! Further and using the comments from "Anonymous", Water Dept. reserves accrue from payments from the "ratepayers." People should be and must be told that the term ratepayers means all those that use and pay for New Britain water; understand, that means many other towns! Using these reserves to pay off the GO bonds means the money will now come from New Britain's General Fund at the rate of $800K/year!!!! From where do General Fund funds come? ONLY FROM NEW BRITAIN TAXPAYERS, NOT ALL THE OTHER RATEPAYERS!
A prediction has been made that before this new budget is finalized the other $9.9 million dollars in WD reserves will be taken by this administration for other purposes. If this happens, any WD Capital projects will have to be bonded, increasing the city's bonded indebtedness!. I wonder how our financial review task force feels about this?
By the way, I hope you all read the lead editorial in today's Courant. Very interesting.
Howdee, Frank. Good job keeping an eye on these slippery maneuvers.
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