Finance committee reviews year-end closeout transfers; Board of Education shortfall to use $3 million assigned fund

City finance staff presented a year-end closeout transfer request to the New Haven Aldermanic Finance Committee that would move departmental surpluses into lines with negative balances and reallocate ARPA and other restricted funds to meet year-end requirements.

"What we want to do is move the surpluses, transfer the departments that had surpluses and move those into the departments that had deficits," finance presenter Shannon McHugh said while describing the proposed transfers.

The transfer packet included a roll-up of donor departments (police, public works, community resilience and others) and recipient lines (debt service, finance/IT, corporate counsel, contract reserve, central utilities and the Board of Education). Finance staff reported that the Board of Education finished the year with a deficit shown in the packet as $5,800,000; an earlier published report had shown a smaller figure (about $4.9 million), and staff explained the difference reflected timing and late adjustments. McHugh said the administration proposes using a $3,000,000 assigned general-fund balance earmarked for education and $2,800,000 in available surpluses elsewhere to close the Board of Education gap.

The packet also described changes to how ARPA (American Rescue Plan Act) funds are used. McHugh told the committee that updated U.S. Treasury guidance removed revenue-replacement as an eligible ARPA use partway through the year; as a result, staff proposed substituting ARPA interest earnings (roughly $5,800,000 in ARPA interest was cited in the presentation) for the previously planned revenue-replacement accounting and earmarked about $1.25 million of ARPA funds for police overtime and a like amount for fire overtime to cover those overtime shortfalls.

Alder questions probed several technical matters: a discrepancy between two versions of the transfer tables (one presented in meeting materials and an updated version run close to the meeting), the composition of departmental surpluses (how much is vacancy savings versus underspent nonpersonnel lines), and whether some special funds (e.g., bottle-deposit/NIPS receipts and cannabis receipts) have been earmarked. Finance staff agreed to provide the aldermen a detailed line-item report showing the contributors to each departmental surplus and a reconciliation explaining the timing difference between the two published figures.

The committee also heard administrative context: McHugh said some overages reflect one-time financing cost timing and required retroactive contract payments (police retro payments were noted as a primary driver for the contract-reserve shortage). Central utilities were over budget in part because staff consolidated many small accounts and cleared carryover balances; those efforts, McHugh said, should reduce recurring billing mismatches in future cycles.

The committee lacked a quorum and therefore did not take a vote on the transfer ordinance; Chair Alderman Adam Marchand said he would ask the Board president to discharge the item from committee so it can receive its first reading at a full board meeting. A procedural motion to adjourn was then approved by those present.

Ending: The transfer request will return to the Board of Alders for a formal first reading and eventual vote after staff provide the requested reconciliation and line-item detail.