|Fabrizi said possible solutions include enacting spending cuts and increasing revenues through upcoming one-time sources. When asked, he did not rule out the possibility of employee layoffs.|
"Everything is a possibility and on the table," he said. "I want to emphasize that the sky is not falling. We are tracking the situation on a daily basis."
The deficit surfaced in the city's monthly financial report, released to the City Council. The current budget is $428.4 million, so the projected fiscal year-end shortfall represents less than 2 percent of the budget.
Fiscal years go from July 1 to the following June 30, so the 2004-05 fiscal year now is in its seventh month.
Fabrizi emphasized that the deficit is only a projection at this time. "It's a forecast or a predictor, but it will be a problem if the trend stays on the same track," he said.
Most of the deficit, about $4.6 million, is due to employee healthcare-related costs, such as medical insurance, workers compensation, and heart and hypertension payments.
Fabrizi said the cost of employee healthcare benefits are "spiraling through the roof."
About $1.9 million of the projected deficit is due to Police Department overtime, $900,000 to Fire Department overtime and $700,000 to other factors.
"These items have to be dealt with," said Fabrizi, adding he has asked department heads to hold the line on spending.
The negative fiscal figures are counter balanced by revenues of about $175,000 above the budgeted amount and spending lower than anticipated in certain areas.
Fabrizi said the projected deficit likely will be reduced by anticipated big-ticket revenue items, such as a $1 million payment from the developer turning the former Citytrust building into market-rate housing and $600,000 owed by the Bridgeport Housing Authority for taxable property owned by the agency.
Fabrizi said he has been working with Police Chief Wilbur Chapman to reduce police overtime. "We are looking at issues of deployment, but don't want to do anything to impact public safety," he said.
City Council member Robert P. Curwen Sr., Budget and Appropriations Committee co-chairman, said he is concerned about the projected deficit, "but I wouldn't be overreacting at this juncture."
Curwen said because the city is self-insured, employee healthcare-related costs traditionally fluctuate during the fiscal year and are hard to predict at any given time. "You can only speculate on where you stand," he said.
Curwen said police and fire overtime spending must be addressed. "Something has to be done about it," he said, suggesting a temporary freeze on overtime is one possibility.
Council member Robert S. Walsh, a budget committee member, said he is baffled as to why the police and fire departments are spending less than expected on regular salaries, but more than budgeted on overtime hours.
Walsh said this could be an indication the departments are understaffed.
While crediting the Fabrizi administration for providing monthly financial reports to the council, Walsh said the reports should include more written explanation to go with the hard numbers.
"It's a 40-page report that lacks a narrative," he said.
Fabrizi said a letter explaining the projected budget deficit accompanied the most recent financial report. "If council members have questions, we can give them additional information," he said.
He said his administration will not hold back giving budget figures, whether good or bad, to council members on a timely basis. "We won't do what some past administrations have done," Fabrizi said.