A state oversight board on Tuesday approved Hartford Mayor Luke Bronin’s request to lift certain restrictions on city finances imposed after it nearly went bankrupt several years ago.
When Bronin took office in 2016, the city was on the brink of insolvency and faced a budget deficit greater than $50 million, as its population shrank and pension debt mounted.
Rather than file for bankruptcy, the city requested a period of state oversight in exchange for hundreds of millions of dollars in aid.
Since then, Bronin said the city’s financial condition has substantially improved.
Last week, Bronin formally asked State Treasurer Erick Russell and the Office of Policy & Management to remove Hartford’s designation as a “Tier III municipality,” a sign of significant financial risk.
Under Tier III status, the city was required to submit monthly financial reports to the Municipal Accountability Review Board (MARB). Also, the city’s annual budget, collective bargaining agreements and many non-labor contracts were subject to MARB approval.
The MARB approved Bronin’s request during a meeting Tuesday morning, according to his office. The city will now fall under Tier II status.
“Due to substantial improvement in the city’s financial condition in the years since our close brush with bankruptcy, I believe the city of Hartford no longer meets the legal criteria for a Tier III municipality,” Bronin wrote in a message to city officials announcing his decision. “This is a major accomplishment for our city, and a credit to our collective commitment to prudent and disciplined fiscal stewardship over the last several years.”
In the message, Bronin said the city’s relationship with the MARB should continue, but at a lower tier requiring less oversight.
Earlier this year, Moody’s increased Hartford’s investment grade from Baa3 from Ba2, and upgraded the city’s outlook from stable to positive. In doing so, it noted the city’s relationship with the MARB as a factor.
As a Tier II municipality, the city will continue to provide the MARB with monthly financial reports, and the MARB will approve its annual budget.
“I believe that these are minimal burdens for the city to bear in light of the considerable benefits, both financial and reputational, that Tier II status can bring us,” Bronin said.
