Is it inevitable; could Hartford, Connecticut’s capital city, declare bankruptcy?
The city’s mayor is now telling the governor and lawmakers that without a state budget, and without a real plan for Hartford, Chapter Nine could be filed in a matter of weeks.
But there could be another option.
Waterbury took some drastic steps to keep the city from going under, leaving some to wonder if those same steps could potentially help Hartford.
“Hartford is where Waterbury was 16 years ago. The city’s bond rating had fallen below investment grade, the city was within weeks of not paying and meeting its payroll,” said former Waterbury Mayor Michael Jarjura.
He became Waterbury’s mayor just as the city was climbing out of a disaster, but perhaps his biggest challenge came long before that, when he was chosen to be on a special oversight board.
“The oversight board legislation allowed the city of Waterbury to go into every aspect of the business and financial operations of the city,” Jarjura said.
The seven-member board had a great deal of power. It authorized the city to borrow $100 million. The governor at the time, John Rowland, agreed to back the city’s bonds and in exchange, the board was given complete control.
The first thing it did was raise taxes. The city’s mill rate went to 99 for one year. The board also modernized every aspect of city hall by automating records and then, the hard part, re-negotiating union contracts, which saved the city $20 million.
In order to avoid collapse, the oversight board knew they couldn’t do it without the unions and they needed unions to come to the table. The board got the control it needed but it wasn’t easy.
“There was tremendous push back on that and that existed for the entire 10 years. It was always there in the backdrop, sort of a feeling of betrayal of the part of organized labor,” Jarjura said.
Health benefits for retirees were changed, not affecting those currently retired but all those going forward.
“I walked in not having any enemies, when I walked out I had a lot of them,” said Ralph Carpinella, an oversight board member, who added that there are still bad feelings. “There are still people who hate me.”
Carpinella says it wasn’t just labor.
“We found layers of management, layers of people, so we looked at cutting out layers, combining workforces, addressing overtime,” Carpinella said, who is a Waterbury native and a businessman.
He said he spent many days and nights on the board trying to fix the city, and said despite hard feelings, it was worth it.
“We saved lots of jobs, we saved all of Waterbury, it was on the brink of just going broke and it was broke,” Carpinella said.
Hartford has been struggling to get union givebacks, however, only firefighters have made concessions. Six other unions have not.
Even if Hartford got all the unions on board, it would only be a fraction of what’s needed.
One of the big challenges for the capital city is tax-exempt property. More than half do not pay any taxes.
The city’s mayor says they’ve made drastic cuts already, laying off staff and operating on a bare-bones budget.
In the governor’s budget, there is help for Hartford. It would create a review board, similar to Waterbury.
The state would have the ultimate authority to approve financial decisions and labor contracts. State aid would be based on how much progress the city makes.
Few, if any, want bankruptcy.
“That would be terrible. The capital city failing, it would be terrible, a travesty. We want it to succeed, everyone should,” Carpinella said.
Whatever path Hartford takes, the city can’t afford to wait any longer.
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