New Haven Register (New Haven, CT)
City moved to highest level of state oversight
“As detailed in the MARB report, there is an obvious lack of fiscal controls in West Haven and it is necessary for the state to step in and provide the oversight and accountability that the residents of the town and the state deserve.”
Gov. Ned Lamont
WEST HAVEN — Gov. Ned Lamont approved a recommendation to place West Haven under the highest level of fiscal oversight under the state Municipal Accountability Review Board on Tuesday, in an effort to put an end to “fiscal mismanagement” that has “gone on for too long.”
The city has been subject to oversight from the MARB since 2017, following a deficit bonding decision that automatically triggered the action under state statute. At the time, West Haven had an $18 million deficit, but since has turned around its finances through a combination of state aid, favorable changes in state funding formulas and better local budgeting practices.
However, state officials continuously have raised concerns about the financial culture of West Haven, pressing city officials on missed deadlines to make key hires, hold essential trainings and draft policies to address gaps in oversight. Since now-former Democratic state Rep. Michael
DiMassa was arrested in October 2021 and charged with wire fraud following an alleged scheme to move funds from a federal grant into a shell company’s bank account, West Haven has been unable to shake itself of a reputation for financial mismanagement and corruption.
City Council officials learned from an emailed memo that the city had
one credit card with its information shared between department heads, leading the state to order the card canceled.
An audit ordered by state officials concluded that $900,000 of a $1.15 million federal state grant was mismanaged.
The city's finances then became a statewide campaign issue, with Bob Stefanowski, the endorsed Republican candidate for governor, calling for Mayor Nancy Rossi's resignation and criticizing Lamont's administration for not preemptively implementing more oversight into how the state's municipalities managed federal pandemic relief grants.
Republican leadership in the state Senate issued a statement Tuesday saying the city's Tier IV designation came too late.
“Increasing MARB oversight appears to be a step forward, but it is far too late to reverse the alleged misspending that occurred while MARB was already providing oversight.” Senate Republican Leader Kevin Kelly, R-Stratford, and Senate Republican Leader Pro Tempore Paul Formica, R-East Lyme, said in a statement. “If this could happen in one town, how do we know it isn't happening in others?”
Lamont on Tuesday said in a statement that he expects the MARB will provide the oversight West Haven needs.
“As detailed in the MARB report, there is an obvious lack of fiscal controls in West Haven and it is necessary for the state to step in and provide the oversight and accountability that the residents of the town and the state deserve,” he said. “Taxpayers deserve to have confidence that their money is well spent, and the stringent oversight that a Tier IV designation provides will allow the state to provide the tools necessary to address this situation.”
Office of Policy and Management Secretary Jeff Beckham said he believes the city and state officials are “at the beginning of what I expect will be a lengthy process,” adding that he hopes it will be “effective and productive at all times.”
Lamont told members of the press at an unrelated bill signing event Tuesday that he will not call for Rossi to resign because she is independently elected, but he believes West Haven residents deserve “a fresh start.” He said he believes the Tier IV designation is “a big piece of that.”
Rossi could not immediately be reached for comment Tuesday, but said in a May 11 letter to Lamont that the MARB had the city's “full cooperation.” However, she also defended the city and her administration, saying that she entered office when “everything was broken in West Haven,” and in 41⁄2 years the city's budget and its economic development potential have improved.
Before Lamont made his decision, the state statute allowed for a 30-day public comment period. Following Tuesday's MARB meeting, the state shared roughly 40 pages of written testimony from residents.
Overwhelmingly, the message sent by residents was that they welcome whatever assistance the state can provide to help the city get its financial processes in order, but they pleaded for it not to mean an increase in their tax bills if the city were made to repay money that was allegedly stolen or mismanaged. Some questioned how escalating West Haven to Tier IV would benefit residents since the MARB had been providing regular oversight since 2017.
“I recommend Tier IV with some trepidation,” wrote resident Patricia Bollettieri. “Many West Haven residents do not have the financial resources to support a massive tax increase. And, as we have seen, Tier III oversight did not do anything to lift West Haven up.”
Another resident, Dabar Ratupenu, wrote that “The taxpayers of West Haven may have heard a speculation of a supplemental tax bill that'd come or a significant increase in a mill rate if the designation of Tier IV were to be approved by the governor in order to pay off the misused and stolen CRF fund, but please I beg MARB and OPM to hold those individuals named in the audit accountable so WE the taxpayers do not have to suffer the consequences of their wrongdoing.”
Two members of the City Council also submitted testimony. Councilwoman Meli Garthwait, R-2, said that because the council took a unanimous noconfidence vote in Rossi, she believes there should be more oversight into the city's management of its funds.
“Given West Haven's history of theft, mismanagement and corruption, increased oversight is not only necessary, but welcomed,” she wrote.
Councilman Victor Borras,
D-8, said he hopes and prays that members of the MARB will do what is best, but “the people have been hurt enough” and a tax increase would be detrimental to residents.