Derby and other speakers urge earlier state oversight for small, distressed towns (HB 7005)

Lawmakers heard testimony advocating that small, economically distressed municipalities automatically receive earlier state review when referred to the Municipal Financial Advisory Commission (MFAC), while municipal representatives urged care to avoid undoing prior statutory fixes.

Representative Kara Rochelle of Derby asked the committee to modify HB 7005 so that a town referred to MFAC that meets existing “economically distressed municipality” criteria would be placed in tier 1 review to ensure earlier oversight. “If a town exhibits the fiscal management behaviors that would qualify for review by MPAC, and if the town is economically distressed, the residents really can't afford the pain that will be caused by that mismanagement,” Rochelle said, urging a targeted approach for small towns.

City officials from Derby described their experience with state review. Brian Hall, finance director for Derby, told the committee MFAC requirements “were very helpful” and provided reporting and transparency that assisted the city in restoring trust and fiscal controls after it entered tier‑1 oversight. “Without some of that reporting that was generated with MFAC ... I'm not sure that the right decisions would have been made,” Hall testified.

George Kurdica, newly elected board president in Derby, and Joseph DiMartino, mayor of Derby, described long‑running financial problems and sharp tax increases tied to their prior management and audits. DiMartino said that when he took office in December 2024, Derby had been under MFAC tier‑1 reporting for more than a year and the city “had no choice but to raise taxes by 12%.” Representative Rochelle and other witnesses also cited an earlier 11% tax increase in Derby during the municipality’s fiscal crisis.

Proponents argued the boroughs most vulnerable to sudden tax increases need earlier attention. Rochelle said the DECD “economically distressed” rubric focuses on residents’ financial capacity (poverty levels, median income, per‑capita income changes and unemployment rates) and that requiring tier‑1 review for small distressed towns would “get more oversight earlier before it turns into a serious crisis.” Jalen Daniels of Ansonia testified in support of HB 7005, urging that towns under 25,000 residents referred to MFAC “must be designated as a tier 1 municipality” to secure earlier fiscal planning and support.

Municipal and state associations acknowledged the problem but urged caution on automatic referral language. Randy Collins of the Connecticut Conference of Municipalities (CCM) said MFAC already has significant discretion and objected to automatic tier‑1 referral language as drafted; he recommended collaborative drafting to avoid unintended consequences. CCM, and OPM representatives who testified on related bills, also flagged drafting errors in statutory language and urged clarifying edits.

Martin Heft, undersecretary at the Office of Policy and Management, testified earlier in the hearing on related OPM bills and noted drafting corrections needed elsewhere in the proposal; he also described OPM’s work on reporting and statutory compliance but did not endorse automatic tiering language.

The hearing produced no committee vote. Members collected testimony and indicated they would review the language and likely work with OPM, municipal officials and CCM to refine the bill so it protects residents in distressed towns while preserving deliberate statutory design and municipal collaboration.

Votes at a glance: Public hearing only; no committee vote recorded.