While most residents were worrying about holiday shopping and getting to the next Christmas-related party, the city came under a new state review board as a result of decisions made by the O’Brien administration in the waning hours of its tenure.
In a column to the Voice this week, Mayor Nancy R. Rossi explained the city’s finances have come under the microscope of the Municipal Accountability Review Board (MARB), a new structure established last year by the General Assembly.
The board was empaneled by the legislature to aid the mounting number of distressed municipalities that are struggling to keep their budgets in balance. West Haven came under the purview the MARB the day after Rossi took the oath of office in a meeting in Hartford. Summoning her was Office of Policy and Management Secretary Benjamin Barnes, who told her West Haven had come under the panel’s oversight.
“The trigger for the MARB oversight was the deficit bonding that was approved and executed by former mayor Ed O’Brien and the previous City Council. The deficit financing in the amount of $17 million was completed five days before I took office on Nov. 29,” she wrote this week.
Rossi is counting the review board as a positive, saying the panel will understand the “tough decisions” the new administration will have to make as the budget-making process wends its way toward March.
In a letter from Barnes following the meeting, he reiterated the reasons he put the city under review.
“Based on the city’s recent issuance of a deficit obligation, I am writing to notify you that I am referring the City of West Haven to the Municipal Accountability Review Board (MARB). The MARB is in the process of having its members appointed and organizing its operations. As the chairperson of the MARB and as the head of OPM, which is to provide administrative support to the MARB, my office looks forward to working with you and answering any questions you may have in this regard,” Barnes wrote.
This is the second time the city has come under the umbrella of a state review board, the first being 1991-1994, when the administration of then-Mayor H. Richard Borer, Jr. sought relief when it was found the city was more than $17 million in arrears.
According to Rossi, the terms of the MARB powers are in many ways similar to those of the review board more than two decades ago.
“The MARB generally will have the same authority as our City Council. They will approve collective bargaining labor contracts, all contracts with a value of $100,000 or more for the city and Board of Education, and will review the budget and approve the mill rate. So as you can see they will have significant influence in how West Haven will operate,” wrote Rossi.
Unlike the board in the 1990s, it does not have the ability to reopen all union contracts and personnel agreements, but it seems to have virtual veto power over decisions made by elected and appointed boards and commissions regarding funds.
If the city elects, it can apply for state funds of $8 million in both 2018 and 2019, according to Rossi. These funds were discussed prior to the termination of the O’Brien administration, and would have prompted the review board.
However, most city residents and some elected officials were unaware the MARB oversight was ordered when the previous City Council approved the deficit-reduction bond issue last year. Interest was piqued when it was discovered a recently approved contract was under review.
That contract, given to the union representing workers at the Water Pollution Control Plant calls for no raise this year, but raises of 2 percent in the final two years of the three-year pact.
Rossi, meanwhile, said the city is faced with the problem of finding $8 million in new cuts to the budget because of the state’s own budgetary crisis in 2017, which left the city with a gap.
“The bottom line is that we will need to cut $8 million from the city budget over the next two years, which is a necessary task but obviously won’t be a pleasant one,” she wrote. “City Treasurer Michael Last and I asked the previous mayor and city council not to include that $8 million of wishful revenue at budget hearings and City Council meetings; however, our pleas fell on deaf ears.”
To make matters worse, the audit for the budget from Fiscal Year 2018, which ended June 30, 2017, has not been finalized, but more red ink is expected.
“Fiscal year 2017 is under audit and we recently learned that the estimated deficit for 2017 is between $1million and $1.5 million. Although this news was disappointing it was not a surprise,” she wrote.
The mayor is looking at the state’s review as a way to ratify the tough decisions she and her administration will have to make while finalizing the budget for Fiscal Year 2019. The decisions, including the mill rate, are things that will affect not only the way the city does its day-to-day business, but what taxpayers will have to pay in the coming years.