City of Hartford: Creating a Platform for Fiscal Sustainability

National Resource Network Hartford, Connecticut September 14, 2017 Finance + Operation

In late 2016, against the backdrop of potential fiscal insolvency, the City of Hartford sought assistance from the National Resource Network to develop options for financial sustainability. Network analysis concluded that even if the City closed its FY 2018 gap, its cumulative deficit for FY 2019 – FY 2023 would total nearly $80 million.

In light of Hartford’s role in the State economy, and challenges and opportunities identified through its assessment process, the Network partnered with Hartford to develop a two-part direct assistance engagement:

  • Part I: Analysis of Hartford’s role as the region’s economic engine and assessment of impact of further fiscal decline
  • Part II: Development of a set of saving and revenue initiatives designed to achieve fiscal sustainability between FY 2018 and FY 2022

In Part I, the Network found that, despite its fiscal challenges and declining population, Hartford remained a key driver of the Connecticut economy; jobs located in Hartford primarily benefited non-residents; and revenue generated by employment in City limits played a significant role in State income tax revenue.

In Part II, the Network’s goal was to partner with the City to identify savings and revenue options to put the City on a path to long-term fiscal sustainability and to make long-neglected investments to seed greater economic competitiveness.

The Network found that without a broad and shared commitment to fixing Hartford’s fiscal morass and making necessary investments, the City might have few – if any – options other than service insolvency or bankruptcy.

Through its analysis, the Network determined that the City required both new and increased revenues from the state and expenditure reduction measures – largely driven by essential changes in the labor-management relationship to achieve fiscal sustainability and long-term viability.

The Network developed a financial plan for Hartford with recommendations that provided the City the opportunity to strategically meet the challenges ahead:

  • Develop a new partnership with the State that allows for more flexibility under the statutory framework that accompanies State assistance, including funding requirements for schools, the degree to which the City can manage labor costs and the ability to adopt revenue sources.
  • Examine alternative sources of relief beyond the State’s direct aid through increases in revenue from non-profit institutions, fiscal relief related to the Hartford Public Schools, and State purchase of purchase of City assets.
  • Right-size public safety as a proportion of the budget through adjustments in workforce and restructured pension plans.
  • Coordination and efficiency of public services through space consolidation and public works contracts.

The Network’s engagement team in Hartford was led by Network consortium member PFM.

City of Hartford: Creating a Platform for Fiscal Sustainability