Unclaimed Funds: Once again, city has trouble collecting money
Hartford Courant Editorial
April 01, 2013
Hartford is chock-full of talented people who work with numbers. If only a few of them could be lured to city hall, perhaps the city could successfully collect money it is owed and desperately needs. But no, this remains a recurring problem.
In 2009, The Courant learned that of more than 200 tickets for blighted property issued by two city departments, only 11 had been paid. Violators had run up more than $85,000 in uncollected fines and penalties. Improvements were initiated.
In 2011, The Courant discovered that over the previous 15 years, an astounding 265,000 parking tickets totaling $18 million — about 30 percent of the tickets issued — had gone unpaid. Officials vowed to do better.
In 2012, The Courant reported that the city's new anti-blight program, the Livable and Sustainable Neighborhoods Initiative, was in shambles. The city was owed at least $27,572 for private properties it cleaned. But officials hadn't billed the property owners for the work because the city's documentation was a mess. The bills were eventually written off. Changes were implemented.
Which brings us to 2013: The city has apparently left millions of dollars in school construction reimbursements on the table. The Courant's Jenna Carlesso reports that the city has hired a consultant to try to recover as much as $27 million in state reimbursements for school construction projects, some of which date back to 2003.
As legendary manager Casey Stengel said of his bumbling New York Mets, "Can't anybody here play this game?"
The school reimbursements are for 20 projects at 18 schools over the past decade, most of them involving renovation work. The state reimburses municipalities up to 80 percent of the cost of most major school renovation or repair projects.
City architect Antonio Matta began looking at the school projects last spring and noticed that some of them hadn't been closed out, meaning that the city had not received all of the money it was due.
He and other officials say the city has been paid about 95 percent of the amount the state will reimburse, or about $550 million. The $27.6 million represents the final 5 percent, which they say has been delayed because of issues with change orders on the projects.
However, state officials familiar with the projects say paperwork submitted to the state for reimbursement was incomplete or incorrect, and that when the state warned city and school officials about the paperwork problems, they either did not respond or did not take the appropriate action to resolve them, The Courant reported.
This is inexcusable. The city is in dire financial straits, looking at a $9.4 million budget deficit this year and an estimated $70 million shortfall in fiscal 2014. City officials are counting on $12.2 million in reimbursements from five school construction projects this year to keep the budget in balance, but several sources say the actual reimbursement could be lower, even as little as half that number. The state makes the final determination of what the reimbursements will be.
Borrow Some Actuaries
Mayor Pedro Segarra has done the right thing in aggressively going after the reimbursement funds. Mr. Matta says he and colleagues have taken steps to ensure that the mistakes made over the past decade are not repeated. "The current process is being done in a way that will minimize issues, so we won't be asking for reimbursements five years after the fact," he said.
That's good, but it doesn't go far enough. This kind of thing has got to stop. While the city has a good internal auditing department, it needs to implement tighter fiscal controls in all departments and create an overall culture of fiscal scrutiny. The new symbol of the city should be the green eyeshade. Perhaps it could borrow a couple of actuaries or accountants from one of the companies down the street.
Reprinted with permission of the Hartford Courant.
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