State MARB oversight board seriously considering ‘Tier IV’ if necessary for West Haven
West Haven could well become the first Connecticut municipality to find itself staring down the barrel of the dreaded “Tier IV” level of fiscal oversight if city officials don’t get their act together and start delivering progress that state officials seek.
That was the clear message delivered by members of the state Municipal Accountability Review Board in a meeting Tuesday, July 17, at which Mayor Nancy Rossi delivered the latest draft of the city’s five-year plan for fiscal recovery.
The MARB, which also is working to help Hartford recover from its fiscal problems, has made approval of such a plan a prerequisite for West Haven to collect millions of dollars in special state funding to help it dig out of the fiscal hole it’s in.
Several MARB members, including Chairman Ben Barnes, secretary of the state Office of Policy and Management, said they would rather not push West Haven into Tier 4, which would involve giving up more control of city finances to the MARB — including the ability to implement a city budget.
But they also increasingly discussed it as a real option.
“Right now I think we’re back to square one,” without an approved five-year recovery plan “five months after it was first discussed,” said MARB member Patrick J. Egan at the meeting in the State Board of Regents boardroom on Woodland Avenue. Egan is former assistant chief/executive officer of the New Haven Fire Department and former president of the New Haven firefighters union.
“I’m not sure at this point Tier 4 is even enough of a solution for West Haven,” Egan said. “I just don’t have a confidence that at the end of the five years the city isn’t going to be where it is now. ... I await more information from Mayor Rossi ... but I just don’t see that happening.”
City Council Chairman Ron Quagliani, D-At Large, said afterward that it’s important that the city present the information the MARB is seeking in a timely manner. He expressed frustration that “the City Council has been kept out of the process” and said it received the latest five-year plan draft at the same time the MARB did.
“I still don’t think that losing local control is the way to go,” Quagliani said. That said, “I think we’re all recognizing that what we’re doing right now is not working. So we’ve got to make changes.”
Throughout the meeting, particularly as they discussed the City of West Haven Fire Department — Allingtown’s growing unfunded pension and “other post-employment benefit,” or OPEB, plan obligations, MARB members appeared increasingly frustrated with Rossi’s inability until now to deliver a finished five-year plan.
Several MARB members, including Barnes and member Bart C. Shuldman, strongly suggested that West Haven hire a full-time, permanent finance director and several additional Finance Department staffers to help respond to MARB requirements and demands.
Shuldman said he was particularly concerned by the fact that the Allingtown Fire Department pension fund, according to the audit, was funded at just 22 percent of where it should be.
He pointed out that according to the audit, the city’s total OPEB liability is $164.26 million and the Allingtown Fire Department’s total OPEB liability was $25.52 million as of June 30, 2017.
“I don’t see how this board can approve any kind of plan when you’re sitting with this kind of liabilities, without understanding how the liabilities are going to get dealt with,” Shuldman said. “I don’t see how you’re going to get out of this.
“I think it’s important for the taxpayers of West Haven to understand what they’re facing,” Shuldman said later. “Until the facts come out, how can anybody really understand what’s going on?”
State labor Commissioner Scott D. Jackson, former mayor of Hamden, said the last thing he wants to see is the city go to Tier 4 and lose more local control.
Rossi, meanwhile, expressed frustration of her own at what she described as the repeatedly changing rules of the MARB — with Rossi and Barnes at one point exchanging sharply worded opinions.
“The rules have changed as you’ve gone along,” Rossi said at one point, detailing how the amount of money West Haven was told it would get from the MARB for the current fiscal year went from $9 million to $6 million.
“We’re really trying here,” she said, pointing out that Tuesday was the first time the Allingtown pension and post-employment benefit plan deficits had been brought up. “But the rules have changed three times.”
That brought an immediate, aggressive response from Barnes.
“I can’t let that stand — the rules have not changed. That’s ... absurd!” Barnes said. “The notion that your five-year plan would not consider addressing a major fund liability ... is ludicrous. That is what a five-year plan does. It addresses short- and long-term liabilities. ... That is the nature of a plan.
“I’m sorry if you didn’t understand it, that we were expecting a five-year plan that dealt with all of the finances of the city of West Haven,” Barnes said. “But that is what we are expecting today — a comprehensive, five-year plan that will lead to the recovery of the city of West Haven and to the resolution of its major, and even hopefully some of the minor, financial challenges.”
MARB members said they would support additional expenditures to hire financial support staff — and Barnes even said at one point that if the city is having trouble finding a permanent finance director, it should consider offering significantly more money to the right prospect.
Barnes was responding to a suggestion by acting Finance Director Linda Savitsky, a former OPM municipal finance official, that West Haven is hampered by the fact that there are other communities seeking finance directors right now and the job, tied to a particular chief executive, does not offer a lot of job security.
Barnes repeatedly suggested that West Haven needs to come up with a “viable” five-year plan.
“I don’t want to make you go to Tier 4. I think Tier 3 can work,” he said, adding, “The best way to get me to vote no on Tier 4 is to put together a viable plan.”
Said Shuldman, “The last thing that I want to do is force you to go into Tier 4.” But, “if there’s not the political will within the community to make those decisions, then we have to make those decisions for you.”