Riccio, Rossi express concerns about West Haven finances, possible state bailout

By Mark Zaretsky, New Haven Register

WEST HAVEN — Mayor Ed O'Brien's two opponents in the Nov. 7 election, Democrat nominee Nancy Rossi and Republican nominee David Riccio, both expressed concerns about the city's fiscal condition in light of a New Haven Register report that the city and state are talking about possible additional state fiscal assistance for West Haven.

The state assistance, something O'Brien said Tuesday may or may not be coming, would include up to $8 million over and above what was included in the state budget. In exchange, the city would work with a municipal advisory review board for three years, officials have said.

Rossi, a certified public accountant who formerly served as the City Council's Finance Committee chairwoman, said in a written statement that she warned the mayor about an $8 million hole in his current budget throughout this year's budget process.

"The mayor was warned by me and others back in March that he was making a huge mistake by adding an extra $8 million of state aid into his budget," Rossi said. "Not only did the mayor put the $8 million of uncertain state aid in the budget, he spent every last dime! New positions were created and multi-thousand dollar raises were in the budget.

"No cutting was done by the mayor or the City Council, and in the end, the mayor’s allies didn’t vote for this fiscal disaster, the budget didn’t receive the seven required votes for passage and went in by default!" Rossi said.

"I continually warned the mayor and the City Council at meetings that including additional state revenue in the budget was unrealistic and irresponsible," she said. "As a result of the ignored warnings, we are now faced with yet another multi-million dollar budget deficit requiring a state bailout and a state review board coming into West Haven.

"My understanding is, at this time this is only a proposal and may or may not be passed," Rossi said. But she asked, "is there a contingency plan? The last time a review board came to West Haven our taxes nearly doubled."

Riccio, a longtime member of the City Council who is its only Republican member, said in a Facebook message that "in four years under this administration we have seen ... four straight unbalanced budgets, unrealistic pay raises to selected city employees, projected budget revenues that never came to fruition.

"For example, the sale of three schools, namely, Thompson School which sold for a whopping $10," Riccio said. "This is in addition to a ... deficit bonding package and a much needed high school construction project that was so poorly managed that it resulted in years of delays and a loss of millions of taxpayer dollars.

"This so-called deal, which amounts to basically piggy-backing onto the much-maligned Hartford bailout will, at the end of day, lead to a costly resolution for the residents of West Haven," Riccio said.

"According to the (New Haven Register) article, West Haven is attempting to get on board with the same terms that the state is willing to give to nearly-bankrupt Hartford," he said. "Those terms include the state giving money to, in effect bail out towns like Hartford and West Haven that have been labeled as "distressed" for their years of fiscal mismanagement.

"The article goes on to say that there will be strings attached," Riccio said. "Of course, 'the devil is always in the details.' These strings will come in the form of West Haven consenting to allow an 'advisory review board' to oversee West Haven’s future fiscal operations for three years.

"Let’s not forget, the last time the state intervened in the fiscal management of our city the ultimate solution was doubling each household’s property taxes," Riccio said. "We cannot venture down this road again!"

O'Brien, who is running an independent write-in campaign after losing the Sept. 12 Democratic primary to Rossi, said that both Rossi and Riccio misunderstand what the state assistance would entail.

"They both don't understand it," O'Brien said. "There's not a review board as it was in the early 90s. It's an 'advisory review board,' just like that the Municipal Finance Advisory Commission that we're already working with."

The advisory review board would act strictly in an advisory capacity rather than require the city to do things as the review board that controlled the city in the 1990s did, he has said.

O'Brien said that in West Haven, "the finances have continually gotten better and better during the years that I've been mayor.

Nevertheless, "I can't help it that our police officers get hurt or that we have health care or special ed costs" that are more than expected, he said.

"Putting fear in the eyes" of residents, as he says his opponents are trying to do, isn't the way to go, he said.

O'Brien pointed out that the state assistance and the advisory review board were included in the last Democratic budget proposal but are not in either the Republican budget or Gov. Dannel Malloy's executive order budget.

"At this point, there's no advisory review board coming to West Haven. But if I have a chance to advocate for West Haven and bring more money to West Haven ... why would I not?" he asked. "If there was $8 million in aid out there, why would I not accept that?"

He said, however, with regard to the city's financial condition, that the 2015 audit says that "were it not for the failure" of the City Council to pass a deficit refunding package that Rossi strongly opposed, the city's deficit would have been dealt with. "

Both Riccio and Rossi laid the blame for the deficit at O'Brien's feet.

"We should not be hoping and awaiting the cavalry from Hartford to teach us how to manage our city's finances," Riccio said. "We should be properly appropriating our dollars to the areas of concern in order to bring our city back into fiscal balance.

"State dependency as we have seen throughout the years has produced devastating results to the residents of West Haven," he said. "It is time for us to stand on our own two feet and start doing the right thing."

Said Rossi: "I understand that the mayor needs the state bailout to balance his budget but it is not that simple. "The bottom line is, the money from the state is temporary and does not solve the long-term problem.

"The $8 million bailout from the state will not be permanent," she said. "My understanding is, it’s a one time fix and only gives the city time to balance its budget, live within its means and become fiscally responsible.

"The truth is that West Haven has to start doing business differently and our elected leaders need to take responsibility and become accountable for their actions," she said. "The city cannot continue to spend money it doesn’t have!"

While legislators are working to include West Haven — which had a $16.74 million cumulative General Fund deficit as of the end of the 2015-2016 fiscal year — in legislation being proposed to respond to Hartford's fiscal crisis, participation would be optional and it would be up to city officials to decide, O'Brien and state Rep. Dorinda Borer, D-West Haven, have said.

The city's legislative delegation has been working to ensure that West Haven has the opportunity to participate, should it decide to, with Borer taking the lead, she has said.

The advisory review board would be a seven-member panel that would include state and local leaders, financial analysts, the mayor and a union leader.

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