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Lawmakers, Derby leaders urge automatic state review for small distressed towns under HB 7005
Summary
Supporters of HB 7005 told the Planning and Development Committee that municipalities with populations under 25,000 that meet existing financial-impact criteria should be designated Tier 1 for review by the Municipality Finance Advisory Commission to trigger earlier oversight and limit steep tax shocks for vulnerable residents.
Representative Kara Rochelle testified in support of HB 7,005, asking the legislature to require that certain municipalities be automatically referred to the Municipality Finance Advisory Commission (MFAC) as Tier 1 when they meet the statute's existing fiscal-impact criteria and have populations of 25,000 or less.
Representative Kara Rochelle said the change would prioritize "small economically distressed municipalities" and protect residents who are most vulnerable to sharp tax increases. She told the committee that Derby and Ansonia are examples of towns whose residents could be disproportionately harmed by late intervention.
Brian Hall, finance director for the city of Derby, said MFAC oversight was “very helpful” when he arrived in Derby and that the reporting and transparency MFAC required were not beyond what municipalities should provide. Hall credited MFAC reporting with helping Derby restore trust with board members and the public and with enabling more disciplined budgeting decisions.
George Kurdica, president of Derby’s board of aldermen, described a history of undisclosed fiscal problems in Derby and said local officials were not always aware of the depth of the city’s issues until after elections and leadership changes. Joseph DeMartino, mayor of Derby, said that when he took office the city had been in MFAC Tier 1 for over a year, and that an apparent $1 million surplus had been revealed as a roughly $2 million deficit; the city has raised taxes to cover shortfalls.
Representatives of the Connecticut Conference of Municipalities cautioned the committee that MFAC already has broad discretion under Public Act 204132 and said the language in HB 7,005 may need refinement so it does not unintentionally undo prior changes or reduce MFAC’s needed flexibility. Randy Collins, CCM associate director of policy, urged collaborative drafting to ensure timely referrals without imposing unnecessary mandates.
Supporters argued the bill would reduce the chance that distressed towns would wait until a crisis to get state review, while opponents and municipal representatives asked for language that preserves MFAC’s role and avoids unintended consequences for municipalities that already receive state assistance.
Votes or formal committee actions were not recorded during this hearing. Testimony and follow-up questions focused on whether automatic Tier 1 designation for small, economically distressed towns would prevent late, painful tax increases and whether the bill’s wording needs technical edits to preserve prior legislative intentions.
