Last week, the City Council approved a five-year plan for putting West Haven on a path to balancing its books. If anyone thought the plan would be easy, they were wrong. The plan calls for tax increases in both the city’s mill rate, the Fire Dept. of West Haven – Allingtown mill rate, and a weaning of the city’s dependency on one-time funds.
The city’s mill rate is expected to rise incrementally over the next five years to 39.99, while other cost-cutting measures are expected to be implemented. Still, the city might be relegated to Tier IV status, which would give the Municipal Accountability Review Board (MARB) virtual control of all city finances and financial decisions, including contracts.
The vote to pass the plan was 11-1, with only Aaron Charney voting against it (see page 9). Other members of the council voted for the plan, but only under duress, knowing the hurt it is going to place on city property owners.
Mayor Nancy Rossi knows the plan has its difficulties, but believes it was the only way the city could get out of its decades-old financial rut.
“The Municipal Accountability Review Board wanted to make sure that the revenue projections were reasonable in the five-year plan and that the plan fully funded the financial obligations of the city. The city is coming off four straight years of budget operating deficits and the mismanagement of the budget process. The five-year plan presented to and passed be the City Council is an honest document, which is conservative on revenue projections and fully funds city government,” she said. “The plan will need to be adjusted each year going forward. The five-year plan is a guide line to keep the city on a responsible path and the City Council will continue to pass a budget each spring as they have in the past. In the current budget we have made many difficult budget cuts and decisions, as well as necessary structural changes and all these actions were needed to make this plan’s approval and implementation possible.
Council Chairman Ron Quagliani, called the plan “prudent.”
“The MARB has worked mostly with the mayor and her team on the five-year plan but I can say that the City Council passing this “forecast” is prudent fiscal policy. Never before, to my knowledge, have we as a municipality developed a multi-year financial framework that is inclusive of all city obligations. The reason we are in the situation we are in is due to past budgets that were out of balance due to over-spending, revenue shortfalls, and failure to expense in the yearly budget employee benefits that are contractually required,” he said.
The dissenting voice came from Charney. He thinks with a new governor and state legislature going to Hartford, the premises on which the plan is based may not come about.
“I am not confident regarding the five year plan since it relies on state money-$6 million in year one and decreasing from there- that has not been budgeted or even promised by the state. I asked if there was a ‘Plan B’ and was told there wasn’t one,” he said. “There will be a new governor.”
Despite the taxation included in the plan, Rossi believes there are some positives for city residents.
“For the first time in a long time, West Haven has a plan that fully funds the current budget and plans for future financial obligations which include Other Post-Employment Benefits (OPEB), pensions, and retiree health care costs. This is a financial situation that has been in existence for decades and it is going to take patience and continued tough and sometime unpopular decisions to correct—the good news is now we have a plan to make it happen,” she said.
Quagliani echoes some of those sentiments.
“The favorable piece is that we are implementing multi-year fiscal planning, something that I don’t believe has ever been done, to allow us to make better decisions. As long as Mayors and City Councils now and in the future follow this framework, the City will pull itself out of this hole and maintain balance budgets going forward. The distasteful piece is being mandated to correct these long-term issues in a short amount of time which results in additional tax burden on our community,” he said.
Charney, too, thought the plan offered more than just “getting by” the next fiscal year.
“I like that the city is finally looking at a planning beyond just tomorrow. The city is being forced to think long term. I like some of the expertise MARB brings to helping our city. I especially like the appointment of former United States Comptroller General David Walker. He worked for ten years trying to make the federal government more fiscally responsible and efficient. Fiscal responsibility and efficiency are two things West Haven desperately needs,” he said.
The looming of Tier IV status is not something anyone wants. Rossi believes the passage of the plan will forestall any decisions along those lines. Quagliani believes elected officials should lead the way without interference in day-to-day operation by the state. Charney believes come budget time the MARB will use this carrot-and-stick approach to make sure the city stays in line.
Rossi and Quagliani both agree adoption of the plan was a necessary first step toward fiscal responsibility. Charney believes the plan will force businesses and local residents to look elsewhere as the costs will be too high.