New Haven, Connecticut’s second-largest city, has hired PFM Financial Advisors to perform a comprehensive review of the city’s financial position.
PFM has performed comparable services to other cities in the Northeast.
“It is imperative that we have a deep and honest assessment of our fiscal situation,” said Mayor Justin Elicker, a Democrat who took office last month.
According to Elicker, the goal of the review is to gain an in-depth understanding of the city’s current financials by a neutral third-party entity.
“My administration has been clear with PFM: Tell us where we stand, not what we want to hear,” he said without announcing a timetable for the report.
PFM, said Elicker, will evaluate the city’s short-term budgetary position and identify “potential course corrections” for this fiscal year and next. The firm will also conduct a five-year projection of the city’s baseline budget position with an analysis on key budget drivers, and identify potential actions the city could take.
New Haven created a five-year plan in 2019 under previous mayor Toni Harp that analyzed financial trends. The additional work, Elicker said, will be more in-depth.
Elicker, a former executive director of the New Haven Land Trust and a former city alder, defeated Harp in last year’s Democratic primary and again in November, when Harp ran under the Working Families Party ticket. Harp served three two-year terms.
The initiation of this financial review is based upon recommendations by the city’s Financial Review and Audit Commission in November 2019 and recommendations from Elicker’s 25-member transition team, the new mayor said.
“Our goal is to understand with a high level of accuracy what the City of New Haven’s current and future financial state is, share this information with our partners, jointly evaluate our options and work together to solve the problem,” Elicker said.
S&P Global Ratings and Fitch Ratings in 2018 downgraded New Haven’s general obligation bonds to BBB-plus and BBB, respectively.
Moody’s Investors Service, however, revised its outlook last July for the city’s GOs over the past five months to stable from negative while affirming its Baa1 rating, three notches above junk. Fitch also revised its outlook to stable from negative ahead of a recent $49 million GO refunding.
In a December interview with The Bond Buyer, Elicker said applying for state oversight under the Municipal Accountability Review Board is an option. His administration must weigh any benefits against a loss of municipal control.
Elicker must present his proposed fiscal 2021 budget to the Board of Alders, the city’s legislative body, by March 1. He is scheduled to give his State of the City address at 7 p.m. Monday in the Board of Alders Chambers at City Hall.