After Transfer, City Still has $6 million in Water Reserve
By Robin Vinci at February 23, 2024 | 8:10 pm | Print
Mayor Tim O’Brien transferred a bit over $10 million last week to fix a $10-$13 million deficit within the City budget. That leaves $6 million in the water reserve budget that can still be used for City resources.
“Most people when they learned how much the water department had were surprised,” said Phil Sherwood communications director for the mayor. “The sewer budget over the last five-six years has been the one that has shot up.”
According to Sherwood, about 10 years ago the water department was asked to save money so that if there was major infrastructure work that needed to be done, the City wouldn’t have to bond for it.
“In a perfect world it might be good to have a lot of money in the enterprise fund, but we are far from a perfect world,” said O’Brien. “We have to find a way to get from where we are now to where we need to be.”
“It’s great in theory, but over time it’s become clear that there may be more appropriate use of the money to address immediate concerns,” said Sherwood. “Their surpluses seem to be unreasonably high considering the financial restraints that the City is in.”
Previous administrations had used $5 million from the water department reserve fund.
Before making the decision to use the funds, Mayor O’Brien had a legal opinion from the firm of Pullman & Comley LLC, Attorneys from Hartford. The firm stated that the “transfer of funds by the Water Department from Water Enterprise Fund to the General Fund is consistent with those provisions.”
The $6 million still in the Water Department reserves may be used in the upcoming budget.
“We used the $10 million this year because we had no choice. Other wise it would come from the general fund and we would get killed by rating agencies,” said O’Brien. “So what we will probably do next year is find quantity of net funding and that will reduce the gap between expenditure and revenues and take some from the water fund and use two other sources to fill in what is left over there and the next year out use the same thing in a smaller amount and then we will be at even.”
O’Brien said that the budget will require a lot of cutting and consolidation.
“We can’t continue to rely on one shot revenues for these matters,” Sherwood added.
