New Haven Register (New Haven, CT)
MARB rejects city’s budget
Plans to fund police contract questioned
WEST HAVEN — The state Municipal Accountability Review Board rejected the city’s $168.3 million budget, citing a lack of a clear narrative from the city as to how it will balance its budget in the longer term.
According to an actuarial report reviewed by the MARB, a renegotiated police contract — intended to improve both recruitment and retention efforts in
the city by increasing officer pay by $10,000 as well as offering a wage increase — would increase city expenditures by at least $2 million through the 2032 fiscal year.
Mayor Nancy Rossi said in March when the renegotiated contract passed the
City Council it initially would be paid for with about $2.4 million in federal pandemic recovery funding, and would be sustained by additional funding provided to the city through the state's revised Payment in Lieu of Taxes formula. Payment in Lieu of Taxes, or PILOT, is funding a municipality receives to make up for lost revenue from taxexempt properties.
However, the contract gave members of the MARB pause.
“You have a massive, uncovered liability in the operating budget,” said Thomas Hamilton, chief financial officer of Norwalk Public Schools. “I can't vote for a $2.3 million hole in an operating budget.”
However the city plans on paying for the increase, MARB members said they lacked written justification because the city had not provided a five-year plan, as is required.
“It's very difficult to approve a budget until we have a full explanation of some of the outstanding questions that exist,” said Mark Waxenberg, former executive director of the Connecticut Education Association.
Bankruptcy attorney Bob White said he felt there was “a deliberate hiding of the ball” to not show how the city plans on paying for the raises in the police contract. White said he was “very upset” that the MARB did not receive a five-year plan with only six weeks until the deadline for the city to send out tax bills.
Rossi said the city did not provide the document because it had to make so many last-minute changes to the budget, including a vote to revise the spending plan the night before Tuesday's MARB meeting to fix balancing errors so that the city's tax rate of 34 mills would not increase.
White rejected the mayor's explanation, saying it is not how a five-year plan is prepared — even if a city has to make late revisions to its budget for the upcoming fiscal year. He said that year one of a five-year plan can be revised, but it has no bearing on subsequent years.
He also argued that he did not see any line items or planning from the city reflecting that it may be on the hook to repay money to the U.S. Treasury following the arrest of now-former state Rep. Michael DiMassa's arrest on a wire fraud charge last October after it was alleged he used fraudulent invoices to reroute federal grant funds issued to the city to a shell company.
OPM Secretary and MARB Chairman Jeff Beckham said that, with the MARB's vote to reject the budget, the city has until June 15 to have a budget approved by the board. Tuesday was West Haven's first meeting with the MARB as a Tier IV municipality, which affords the highest level of oversight available to the MARB. Since 2017, the city had been under Tier III.
Rossi did not respond to a request for comment Tuesday.
City Councilwoman Colleen O'Connor, R-At Large, who was voted by her colleagues as one of two exofficio council members to serve on the MARB under Tier IV, expressed disappointment with the vote.
“I thought we had a good budget. As a council we have a few more hard decisions to make,” she said.