A state oversight board announced on Thursday that it could recommend a full state takeover of West Haven to fix longstanding problems in the city’s finance department, which allowed a former lawmaker and city employee to steal more than $1.2 million in recent years.
Members of the Municipal Accountability Review Board, which has overseen aspects of West Haven’s finances since early 2018, asked the Attorney General’s office to draft potential legislation that would enable the state to control nearly every aspect of the city government.
And they warned city officials that the MARB may recommend that legislation to state lawmakers this year.
The MARB asked for the Attorney General’s assistance in the matter after several board members continued to voice concerns about the city’s willingness to implement new financial controls, which are meant to protect against waste, fraud and abuse of taxpayer money.
“At some point in time, there has to be recognition that West Haven may not have the willingness, and/or infrastructure capabilities, to right their ship. And that is what this body has to deal with in the very near future,” said Mark Waxenberg, one of the MARB members.
This isn’t the first time the MARB members have voiced similar frustrations with the elected leaders, appointed officials and public employees who run city hall. The tensions between the MARB and the city have been building for more than a year and a half.
The MARB voted in April 2022 to increase its level of oversight within West Haven following the arrest of former state Democratic lawmaker Michael DiMassa and three other people, who were charged and convicted for stealing a combined $1.2 million from the city.
That vote gave MARB the ability to approve or reject the city’s annual budget. It gave the oversight board more power to review city contracts and spending. And it enabled MARB to review collective bargaining agreements with the city’s public employee unions.
But many of the MARB members said Thursday that those powers may not be enough to fix the problems in West Haven, and they continued to complain that the culture in city hall was thwarting necessary change.
“At some point, I think the state is going to have to analyze West Haven for what it really is, which is a problem child that needs to be dealt with differently,” Stephen Falcigno, another MARB member, said.
The legislation that MARB asked the Attorney General’s office to draft is expected to be based off another bill from 2001 that appointed a state board to control the city of Waterbury.
That legislation, which was signed into law by former Gov. John G. Rowland, gave that special board immense powers over the city and its finances.
That board could decide whether the city borrowed money through bonds. It could eliminate individual expenses in the city’s budget. It could order city employees to implement the board’s decisions. And it could appoint its own manager to run “the financial and administrative affairs of the city.”
Back in 2001, the state legislature approved the takeover in Waterbury because the city was financially broke and barely able to meet its payroll.
That’s not the case in West Haven at the moment. The city’s current finance director, Scott Jackson, told MARB members that the city is projecting a surplus at the end of this fiscal year.
Waxenberg, and other MARB members, have repeatedly emphasized that part of the reason the city is posting surpluses now is because of the additional financial support that was provided by the state in recent years.
The MARB gave West Haven $16 million in state assistance since 2018 to help the city get its finances in order. That money was cut off following the arrest of DiMassa, however.
The problem, according to MARB members, is not how much money the city has in its coffers. It’s about the lack of financial controls the city has in place, and the alleged apathy of city officials.
The MARB members specifically called out compensation time payouts that were awarded to politically appointed officials in West Haven as evidence of that problem. Two audit reports have raised questions about those expenditures, which were initially paid using federal CARES Act funding.
Yet the city has not asked the recipients of those funds to return the money, as the MARB would like.
“Six years to right a ship, to have cultural change, and you end up with conflicts of interest on the city council. You end up with hand-in-glove operations. You have self-reporting of monies and bonuses,” Waxenberg said. “It gets to the point where its a little bit more than frustrating.”
West Haven Mayor Nancy Rossi’s absence from the meeting on Thursday did not improve the perceptions of the city and its leadership.
“I would hope that the mayor would be able to come to the committee and would do what she needed to do to accommodate it,” Robert White, a MARB member, said. “I’m getting a very distinct sense that the relationship with MARB is at the bottom of the priority list.”
When the CT Mirror contacted Rossi on Thursday, she initially declined to comment on MARB’s threat to push the city into a full state takeover. And she said she was not at the board meeting because she was attending the West Haven Black Heritage Celebration.
She later said via text message that she was not in support of a full state takeover.
“I would not support legislation like the bill that authorized a state takeover of Waterbury in 2001,” she said.
The MARB’s actions on Thursday shocked other elected leaders in West Haven.
“Off the cuff, this is a little bit of a surprise,” said Bridgette Hoskie, who is a member of the West Haven city council.
Hoskie, who chair’s the city’s finance committee, said it was “unfortunate” that the MARB believes a full state takeover might be necessary. And she said it is frustrating for her as someone who was born and raised in West Haven.
But Hoskie said she understood that the MARB members were only trying to do their job.
“I understand why they feel the way they do,” Hoskie said. “We’re not where they want us to be.”
Hoskie said she can relate with MARB members who have complained about not getting the information they request from the city. She said she has encountered similar problems as a city council member when she requested information from Rossi and her administration.
“The MARB has more than enough reason to struggle with the lack of progress we’ve made,” she added. “They’ve been given a job, and they are doing their due diligence and ensuring we are accountable for things they want us to do.”
Rep. Dorinda Borer, a Democrat who represents West Haven in the General Assembly, was taking part in a legislative hearing on Thursday during the MARB meeting. But she said she knew something serious happened when her phone was inundated with text messages.
Borer said she wanted to listen to the MARB meeting in order to understand what pushed the oversight board to this point.
A full state takeover, Borer argued, should be “the absolute last resort” to solving West Haven’s problems. But she recognized that it was the actions of West Haven officials that caused the relationship between the city and the MARB to deteriorate.
“There’s no excuse for us to be at this point,” Borer said.
The MARB could ultimately decide not to recommend a full takeover to state lawmakers this year. But Waxenberg said he wanted the attorney general’s office to put the legislation together so it would be available to the MARB, if necessary.
Waxenberg said the MARB would keep that legislation in its “back pocket” and decide if they needed it “down the road.”