Milford Mayoral Candidates Spar Over $5 Million Transfer

Last year Milford city officials used $1.4 million from a reserve account to help pay for unbudgeted expenses related to the storm response for Hurricane Sandy.

This year they moved $5 million from the same fund in order to balance the budget in a way that lightened the burden on taxpayers.

And it worked, as real estate taxes increased about $75 less than they did the previous year, according to figures provided by Milford Finance Director Peter Erodici Jr.

So everyone’s happy, right? Well, not everybody.

Republican mayoral hopeful Peter Spalthoff has continually railed against Mayor Ben Blake for the $5 million transfer – which represented about a third of the overall reserve fund – saying it was done under the guise of good government and without transparency to taxpayers.

Erodici, the finance director, said the money was added to the bottom line of this year’s budget and not toward any specific line item therein.

“It’s money that is not part of the city-approved budget,” he said.

And that’s the point Spalthoff is seemingly trying to ingrain in the minds of voters leading up the Nov. 5 election. Spalthoff has said he’d never attempt “to sell lower taxes…with the help of transferring money from a rainy day fund.

“And it’s not just him. Throughout the years most of the mayors have done it (but that) doesn’t make it right.”

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The city’s reserve account is funded by operating budget surpluses, Erodici said. The surplus at the end of fiscal year 2013 was a robust $6.5 million, thanks in large part to nearly $3 million in the sale of delinquent tax liens, the finance director said.

Blake has pointed to the bloated surplus as vindication for tapping into the reserve fund.

“It’s folly to not look at that as part of the budget process,” the Democrat said at a mayoral debate against Spalthoff this week. “We shifted it to mitigate impact on the taxpayer.”

In Spalthoff’s rebuttal, he said he would use reserve funds but only when directed toward a specific expense. “Absolutely, I’d use it,” he said.

Erodici said the reserve fund is projected to climb back up to around $15 million by the end of fiscal year 2014, as FEMA continues to reimburse the city for some Sandy-related costs.

The finance director said the city tries to keep the balance “well above” 5 percent of the total budget. After this year’s transfer, however, the percentage is only slightly above that figure.

At the end of fiscal year 2012, Milford had a surplus in the operating budget of $2.2 million, Erodici said. But city officials chose not to touch the newly replenished reserve fund for the fiscal year 2013 budget, he said.

“We wanted to boost the fund balance,” Erodici said. “We took a very prudent, conservative approach because there could be an emergency need.”

At the debate, Blake said using the reserve fund to spare taxpayers represented a key difference between him and Spalthoff.

“I think this is a clear line in the sand to separate the candidates,” he said.

Editor’s note: The tax increase cited in this article is based on figures provided by Erodici for an average single-family home with a market value of $311,000.