Despite early reservations, Hartford’s city council on Monday greenlighted a proposal to seek state oversight in exchange for tens of millions of dollars in additional assistance that the city will need to balance its budget.
The council approved a request from Mayor Luke Bronin to apply for state monitoring. If accepted by the state, Hartford will be watched by an 11-member panel and must report its budgets, contracts and other transactions to the group.
Several council members had expressed steadfast opposition to the oversight, saying it undermined the power of local government. Last year, the group rejected a different plan that would have involved some state intervention in city financial dealings.
But in recent months, as Hartford’s outlook worsened and the threat of bankruptcy grew, they have softened on the issue, pointing to oversight as the city’s last hope to avoid insolvency.
“There was a lot of discussion and controversy over bankruptcy. This is a stopgap,” Councilwoman Glendowlyn Thames, a Democrat, said Monday. “This is an opportunity to prevent us from following that path to bankruptcy.
“Hopefully this will give us the tools that we need and create a new partnership with the state so we can get on a path of fiscal sustainability.”
The oversight board will have the power to reject — up to two times — each new labor contract and arbitration award. It also must approve any new debt issued by the city.
The panel ranks municipalities based on the severity of their financial problems. Tier one is the lowest ranking and involves little monitoring. Tier four is the highest and calls for the most scrupulous oversight.
Hartford would begin with a tier three designation. If its financial situation doesn’t improve, it could move to the fourth tier as early as April, though council members say they’re opposed to that. Under a tier four status, the oversight board would control city spending and could select its own arbitrator to preside over union discussions.
“We should do everything that we can to avoid that,” Council President Thomas “TJ” Clarke II said after a meeting in November. “It very much is going to limit the powers of the local elected officials and we will be at the hands of the board.”
When lawmakers adopted a state budget in October, they set aside $28 million in a special account for distressed municipalities. They also launched a program to help struggling cities with debt payments.
To qualify for that funding, cities and towns must agree to be monitored by the oversight board.
Hartford, facing a $65 million deficit, could get as much as $20 million from the special account and another $20 million in state-subsidized debt payments. Bronin has asked for at least $40 million more this year.
The mayor, who has long advocated for stronger ties with the state, said he plans to submit an application for oversight this week.
“I’m confident in the decisions we’ve made and the discipline with which we’ve budgeted, and I welcome the chance to open our books,” he said.
The oversight board held its first meeting last week. Eight people have been appointed to the panel, and more are expected to follow in the coming weeks.
Members are Thomas Hamilton, chief financial officer of Norwalk Public Schools; Patrick J. Egan, former president of the New Haven Firefighters IAFF Local 825; John B. Nolan, a lawyer for Day Pitney; Scott D. Jackson, the state’s labor commissioner and former mayor of Hamden; and Mark Waxenberg, former executive director of the Connecticut Education Association.
The board is co-chaired by state Treasurer Denise Nappier and Ben Barnes, secretary of Connecticut’s Office of Policy and Management.
The city council on Monday also signed off on two new labor contracts.
An agreement between the city and the Hartford Police Union — ratified Friday — is expected to save the city more than $17 million over the life of the six-year deal. It includes increases in employee health-insurance costs and pension premiums. Hartford officers will receive raises only in the last two years of the six-year contract.
The City of Hartford Professional Employees Association also approved a new deal that features wage freezes, an increase in worker pension contributions and a switch to a high-deductible health care plan. That agreement will save the city about $600,000, union officials have said.