New London - Mayor Daryl Justin Finizio's proposed budget for the coming year includes a $55,000 cut in funding for New London Main Street, a group that has worked to revitalize the city in recent years by staging events such as the semiannual Downtown Food Stroll and with projects including the New London skating rink.

"It's a pretty serious challenge for us," said Penny Parsekian, chief executive officer of New London Main Street. "I don't see any other agency in New London getting cut 80 percent. That's a drastic cut."

Finizio said the funding cut was part of a new priority at City Hall to centralize the administration's efforts to spur economic development. He wants New London Main Street, the City Center District, the Downtown New London Association and other groups that hold events or promote businesses to begin working together toward a common goal.

"We don't need eight different people rowing eight different boats in eight different directions," he said.

The hiring of Kristin Havrilla Clarke as the city's director of development and planning - after years of leaving the position essentially unfilled - has paid dividends, he said, with more than $200,000 in grant money having been won during her first few months in office. He said Clarke's new role allows for coordinated economic development efforts throughout the city, not just in downtown, where New London Main Street's priorities are focused.

In addition, he said, the city needs to coordinate event planning because the secondary costs of such extravaganzas as OpSail, Sailfest and the St. Patrick's Day Parade can reach into the tens of thousands of dollars, most of it for police department overtime. Such costs are impossible to sustain, he said, at a time when the city faces a multimillion-dollar budget gap that the mayor is proposing to bridge with a 20 percent increase in taxes.

"These are the hidden costs of government," he said. "We can no longer ignore the real costs of government."

However, Parsekian said New London Main Street doesn't require a police presence for its smaller events. What's more, while Finizio has been asking New London Main Street to get more involved in such areas as business retention and to de-emphasize downtown events, she sees a tie between the two.

"Events drive economic development," she said.

Some Main Street organizations around the country have a stronger focus on economic development than the New London group maintains, she acknowledged, but in many cases these are in small towns where the economic development director also heads up the Main Street program.

New London Main Street's funding from the city for this year was $80,000, but under Finizio's proposal the group's funding would be reduced to $25,000. That's the same amount it received in 2008, and about $10,000 more than it has received historically, Finizio pointed out.

Parsekian said the cut actually is even more severe than it would appear because the city also has indicated it would no longer provide Public Works Department employees to put up the light pole banners that guide visitors to local attractions.

According to Parsekian, the budget cut likely would reduce the fundraising capability of New London Main Street, since the current level of support helps employ administrative personnel who in turn leverage the money to seek grants and bring in other contributions. In the past dozen years, the organization has raised $3.5 million, while the city has pitched in only $364,000.

"It's unbelievable what the city is getting," Parsekian said.

Tammy Daugherty, an administrator in the mayor's office who has been the city's liaison with New London Main Street, said the Finizio administration wants Parsekian's organization to focus on sprucing up buildings and attracting and keeping businesses in downtown.

"A strong Main Street program is a great thing for any city," Finizio said.

Parsekian said New London Main Street had been planning over the past two years to get more involved in economic development projects, but to do so it was seeking more money from the city. Instead, Finizio made clear he was not interested in expanding funding, she said.

Finizio admits that he and Parsekian have had disagreements in the past, over issues ranging from placing residences on the first floor of downtown buildings to New London Main Street holding meetings outside the city. And he and Parsekian acknowledge that some people have tied the testy relationship to her perceived support for the candidacy of Michael Buscetto - formerly the City Council's liaison to New London Main Street - when he ran against Finizio for mayor.

But Finizio insists the big cut for New London Main Street has nothing to do with their disagreements.

"It's not personal; it's not political," he said. "Everyone is on that bandwagon. I don't think about who supported who. I'm not reliving the 2011 mayoral election on a daily basis."

Finizio's proposed budget will be discussed by the finance board at a series of public hearings this month. The board will return the budget to the council with its recommendations. The council then has to approve the appropriating ordinances by May 31. The mayor will have 15 days to act.

Parsekian said New London Main Street likely would have to come up with a new budget over the next couple of weeks that takes into account the city's funding cuts. The organization had some big plans for the coming year, including a new retail retention partnership, but Parsekian said it's unclear whether these will take root in the current climate.

And while she said New London Main Street would love to initiate major economic development projects, she doesn't believe the mayor's office would give the group such authority.

"What will be our role in the city?" Parsekian said. "I don't know."

l.howard@theday.com