Harp talks budget, finances

As the cash-strapped Elm City approaches budget discussions for the next fiscal year, Mayor Toni Harp’s administration is hoping to clarify New Haven’s financial status and future, beginning with presentations to neighborhood leaders.

Recently, the mayor’s office has been criticized for incidents related to discretionary spending, tense political appointment battles and property-tax rate increases for residents as City Hall tries to raise additional revenue. Over the summer, the Harp administration signed onto debt restructuring while it attempted to address the long-standing contributors to New Haven’s deteriorating financial health. Now, with budget discussions beginning for the next fiscal year, which begins in July 2019, Harp and her administration plan to present to each of the city’s 12 community management teams on the city’s fiscal standing.

“[Mayor Harp] has been making the rounds and attending these management team meetings in conjunction with the start of the city’s annual budget preparation process,” mayoral spokesman Laurence Grotheer told the News. “[The purpose is] to explain more about the process and how each annual budget is really six months in the making.”

Each fiscal year runs from July 1 to June 30. By charter mandate, the mayor’s team drafts the proposed budget and submits it to the Board of Alders by March 1. The Board of Alders is then responsible for ensuring that the final budget is balanced and passes a budget by the first Monday in June in time for the beginning of the next fiscal year just weeks later.

In budget discussions for the current fiscal year last spring, New Haven struggled with lack of revenue and an increase in expenditures. In an effort to free up cash for expenses while also avoiding bankruptcy, the city opted for its largest ever debt restructuring. In the refinance, payments plus further interest on $160 million worth of debt were extended into future decades. The city also took out additional new loans. While the measures ensured that New Haven’s general fund remained afloat, it did result in some austere measures — such as layoffs in the school system — and pushed the Elm City’s debt burden onto future generations of residents.

The Elm City has also historically struggled to stay within its determined budgets. A particularly costly point is overtime from the fire and police departments, which exceeded their allotted amount last fiscal year and is on track to do so again five months into this year.

Harp’s top aides have often pointed out that the city’s financial squeeze is a symptom of financial disarray at the state level. Last year, Hartford legislators chose to bail out the state’s capital from bankruptcy. The increased financial demands of the bailout slightly diminished state contributions to budgets in other municipalities, including New Haven. While the state has other mechanisms for addressing fiscally distressed cities, including oversight or interference by the Municipal Accountability Review Board, lack of funds across the state make them impractical.

The state sent a representative to the most recent meeting of City Hall’s independent Financial Review and Advisory Committee to explain the details of MARB. But City Controller Daryl Jones dismissed the possibility of New Haven working with the Board, telling attendees that the state would not have adequate funding to back up the Elm City.

Jones objected to state involvement, citing that “the state does not have the resources to have another city” in the oversight program.

In the visits, the mayor, Jones and Budget Director Michael Gormany gave presentations to community management teams. Harp’s most recent visit came on Tuesday night at the Newhallville community management team meeting.

The administration is also presently working on a five-year plan to address, beyond the year-to-year scope of budget decisions, longer-term concerns with financial sustainability. The five-year plan, according to the presentations, aims to, “address decades of financial pressures, engaging technology improvements and innovation to improve city finances.”

Harp has visited four community management teams thus far.

Angela Xiao | angela.xiao@yale.edu

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