New London is close to bankruptcy

New London is close to bankruptcy

Posted in the Trumbull Forum

bptnews

Matawan, NJ

#1 Apr 22, 2014
Could this happen to Bridgeport anytime soon.

New London — If a proposed fund balance replacement plan is not approved by the City Council tonight, the city will go broke before the end of this fiscal year, Mayor Daryl Justin Finizio and the city's finance director told the council in a special meeting this evening.

Additionally, the city does not have enough cash on hand to pay its $1.7 million payroll at the end of this week.

Finizio said he received a call from the Finance Department last week informing him that the city had run out of cash. Finizio called Governor Dannel P. Malloy and asked that the state expedite payment of $11 million in education cost sharing funds the city is due from the state. The governor, Finizio said, agreed to help speed that process up so the city can get at least some of that money this week.

"We should receive that in time to meet the city's payroll," Finizio said. "If not, the city would go broke this week."

At the heart of the city's fiscal dilemma is its withering fund balance, the account that can act almost as overdraft protection for the city's general fund.

Earlier this month, in his State of the City address, Finizio called the city's fiscal problems "a very real, and a very grave, financial peril" and declared the city was out of money and out of time.

"This is really it," he said Monday. "It's now three weeks later and we are out of cash."

The fund balance replacement plan the mayor has proposed — and has asked the City Council to approve tonight — consists of three steps.

First, the city would bond about $1.1 million to replace money the city took from the fund balance when projects ran over budget.

Second, the council would have to adopt a resolution that would require it to budget at least $250,000 in each upcoming fiscal year for fund balance replacement until the fund balance is at least eight percent of the city's budgeted expenditure, as mandated by a city ordinance.

Third, Finizio has proposed another resolution mandating that proceeds from the sale of city-owned real estate must go into the fund balance until it is restored to the eight percent level.

"The good news is that if we do it, we are around the corner," Finizio said. "We can solve this. If we're choosing not to, we're choosing to put ourselves in an unthinkable position."

Since: Aug 10

Location hidden

#2 Apr 22, 2014
And so is Bridgeport because of all the Corruption.
BPT

College Point, NY

#3 Apr 22, 2014
America Gentleman Samuel wrote:
And so is Bridgeport because of all the Corruption.
And all the handouts given to the liberal voters. Bridgeport is the armpit of this state and it's exactly what the liberals want.

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