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MARB: How the city got to where it is today

November 28, 2018 By whvoice

By Mayor Nancy R. Rossi

The City of West Haven has struggled with finances for decades. It was in 1991 that the state had to intervene and take over when city and state officialsdealt with deficits of around $17 million.

In the spring of 2017, former Mayor Ed O’Brien built $8 million of additional state funding into his budget to fund his ever-increasing spending plans. I spoke at budget hearings and meetings along with City Treasurer Michael Last asking that the mayor and council remove the additional state funding from the proposed budget, since it was pretty clear and obvious we would not receive it. The City Council failed to get enough votes to pass the budget plan, which resulted in the mayor’s budget passing by default, as allowed in the city charter.

In November 2017, Mayor O’Brien and the City Council authorized deficit bonding in the amount of $16.1 million. This was to cover the cumulative deficit through June 30, 2016 and the state had assurances from the O’Brien Administration that the Fiscal Year 2017 budget was balanced, which turned out false—there was another $1.4 million deficit in fiscal year 2017. Mr. O’Brien took office in 2013 with an inherited $7.8 million deficit and when he let office in 2017 the deficit had more than doubled to $18.1 million—that is why we are where we are. O’Brien ran up additional deficits each of his years in office to the tune of an additional $10.3 million increase to the deficit in four short years, which does not include the $8 million built into FY 18!

I took the oath of Office on Dec. 1, 2017 and was ordered to Hartford on my first week and handed a letter from the Office of Policy and Management Secretary Ben Barnes placing West Haven under the control of the Municipal Accountability Review Board (MARB). The reason was Connecticut State Statutes required any municipality that issued bonds to cover a deficit to fall under the opuses of the MARB.

After taking office, I was informed that West Haven was projecting another multi-million dollar deficit for Fiscal Year 2018, which ended on June 30, 2018. My administration made immediate cuts (over $2 million) and through elimination of programs and jobs, a freeze on non-essential overtime, better oversight and controls on expenditures, and tough decisions including scaling back and canceling events, the City will have a FAVORABLE audit report for fiscal year 2018 when the audit is released. The Sewer fund that has been running deficits for years will finally have a surplus and a positive fund balance.

The MARB did approve West Haven’s five-year plan, which included state aid on Nov. 1. There was $8 million for Fiscal Years 2018 and 2019 (current year). There is $6 million projected for 2020, $4 million for 2021 and $2 million for 2022. The five year plan has no MARB aid in fiscal year 2023 and the budget shows a surplus. The city budget balances each of the five years and relies on MARB funds for four of the five years. The five-year plan also begins funding our long-term liabilities which include Other Post-Employment Benefits (OPEB) by starting a trust fund. The city has been using the “pay as you go” method which was not responsible and would not be sustainable. Is there risk in projecting state MARB aid for future budgets—absolutely there is—but we have an agreement with the state and there will be the same risk moving forward with all of our state funding, including Education Cost Sharing (ECS), LoCIP, and Pilot funding, which accounts to over $50 million annually.

The five-year plan does include small tax increases over the five years. The five-year plan is just that a plan– a strategic document and road map to help us get out of our current fiscal mess. It is my absolute hope that we can avoid raising taxes in the plan by keeping the momentum on revived economic development projects, continued budget cuts and operational efficiencies, and the reorganization of city government to be more efficient and cost effective.

I believe that that City of West Haven is on the right path and want to thank our residents for their support through these trying and difficult times.

Filed Under: 112918 Tagged With: MARB

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