With a late-night vote of 8-5, the City Council failed to pass an ordinance approving Mayor Nancy Rossi’s $162.86 million budget. The failed vote, the second one in as many years, means the package went into effect as proposed. Both Rossi, and City Council Chairman Ronald Quagliani (D-at-large) believe the Municipal Accountability Review Board (MARB) will reject the budget and order changes – or make them.
While members of the City Council attempted to make the changes MARB was looking for, the nine-vote supermajority needed to amend the package was a hurdle too high to clear. After hours of debate and attempted votes, the budget was rejected, 12-0, with one abstention. That triggered the City Charter-mandated default mechanism, putting Rossi’s proposal into law.
Since Mayor Rossi’s plan was announced in March, MARB has been looking for a combination of spending cuts and “structural changes” in the way the city does business in order to bring about a balanced budget within five years. The city had a long-standing operational deficit that it relieved through bonding in 2017, but four straight years the deficit was broadened by recurring shortfalls.
Part of the problem as well was the state’s own budget-making SNAFU last year that left municipalities unfunded in various state grants-in-aid. West Haven’s budget depended on $8 million in state funding, but never received the money. The MARB had up to $9 million to give the city, money Rossi was hoping to get, but two weeks ago it announced only a $6 million contribution in order to force structural changes, while $2 million more would be used for deficit reduction and MARB-related expenses. MARB was looking for $3 million in cuts.
According to Quagliani, the council attempted to make changes, but the nine-vote minimum was a bridge too far. He rejected the notion the council shirked its responsibility.
“The City Council did not punt to the MARB,” he said. “I believe (the council) worked very hard to find ways to come up with the $3 million revenue shortage in the recommended budget. As I have stated in the past, it is very difficult to assemble a super-majority to amend the recommended budget. Approving (it) as it stood was not an option.”
Still to be done is the setting of the mill rate. While the spending plan was defaulted, the mill rate is a separate act of the council. With the expected rejection of the budget by MARB and changes made in the time before July 1 – and possibly after – city homeowners have no idea what there tax rate will be come July 1.
“The MARB will not approve this version of the budget, and will not approve the revenue assumptions due to the $3 million difference,” Quagliani said.
Mayor Rossi said the work begins between her office and the council to bring the budget and the requirements set down by MARB into compliance.
“This budget cycle was one of the most difficult because of the guidelines and requirements that were put into place by the Municipal Accountability Review Board (MARB) during their organizational process, which was unfortunately after my recommended budget was presented to the City Council,” she said. “The recommended budget presented included $9 million of MARB funding which was originally available to West Haven for the fiscal year 2019 which begins on July 1. Because the MARB reduced the amount available for operations, the budget is $3 million out of balance! I will be working with City Council Chairman Quagliani to open the document within the next several weeks to make the adjustments necessary to put the budget into balance.”
Meanwhile, Rossi said she is going to attempt to put together a new plan with the new restrictions in mind.
“The MARB has been involved in the discussing the framework of the budget and has reviewed the revenue projection included in the budget. The original estimate was that $9 million of state MARB funding would be available to the city for next year. The amount now available for the fiscal year 2019 budget is $6 million for the operating budget, MARB restricted $2 million by stating that $1.4 million is to eliminate the deficit in 2017, $250,000 for MARB expenses. One million was complete eliminated. So I will submit a new proposal to the city council which will include additional spending cuts and new revenue,” she said.
“We are currently negotiating union contracts that will include structural changes that will provide short- and long-term labor savings. Our labor partners understand the position the city is in and have been supportive and are looking to help. The recommended budget does reduce positions, eliminates the Adult Day Care Center, and properly funds the health care and retirement benefits line items, and removing the 2.1 million dollars from the city’s revenue and returning it to the Board of Education, where it should have always been booked because the funding belongs to the BOE,” she said.
The work continues, according to Rossi. She hopes to have new projections in place soon.
“This was a very challenging process with having the State MARB involved in the process and organizing themselves during the process. I think we now know all of the requirements, expectations and final funding amounts from MARB–I think we (council and mayor’s office) can sit down and put a fair and balanced spending plan together before June. These were extraordinary circumstances and together I believe we can pass a balanced and fair budget,” she said.