MDC Passes Cost Shift Plan, But Still Seeks Alternatives
NEWINGTON - The extra sewer costs on 7 Metropolitan District Commission member towns would be half of the amounts projected last month if Hartford cannot make two of its quarterly payments, but an MDC proposal to shift the difference on to its other municipalities-voted on and passed yesterday afternoon-has raised concern from Newington residents and local officials alike.

       So an MDC contingent that included MDC Chair Bill DiBella and CEO Scott Jellison came to a packed Town Council meeting last night to outline the cost ramifications for the town in the event that revenue under the Commission’s ad valorem sewer tax structure does not come from financially struggling Hartford, as well as potential alternatives, which include a reopening of its charter before the General Assembly next year.

       Hartford-appearing now to be headed for a 2020 $100 million budget shortfall-pays 26.7 percent of the $41 million in sewer tax revenue anticipated by the MDC, according to DiBella.

       â€"We know where Hartford is going and the question became how do we operate if Hartford cannot pay its ad valorem?” DiBella told the Council. â€"If we were selling water and you don’t pay us, we can shut off your water. How do we shut your sewer off? Even if you could, it creates a public health problem.”

       The good news is that the city looks to be able to make a couple of its quarterly payments-a development that halved the extra costs to Newington from a Hartford Courant-reported $1.4 million in October to the current $718,000 projection, MDC personnel said.

       But Councilors remained cautious.

       â€"I do have some serious concerns about their ability to meet the July and October payment when they’re anticipating a $100 million shortfall,” said Councilor Maureen Klett. â€"I’m sure you can understand the frustration of the thought of having to pay more taxes at all, especially to bail out another city.”

       The MDC hopes to avoid that outcome as well, DiBella said.

       If Hartford does not find a way to commit to the remaining two quarterly payments for the MDC’s 2017 Fiscal Year, the Commission will look to the General Assembly legislative session next year for a look at its charter-which prohibits it from issuing short-term bonds for the purpose of operating expenses.

       â€"Obviously not a fair situation, but unfortunately we never had this happen, and MDC in its charter did not have the ability to borrow for operating costs,” DiBella said.

       A change there, as well as the institution of a â€"super lien” that would prevent Hartford from integrating sewer tax revenue from its residents with its operating budget, could avert a financial blowback on the towns, DiBella said.

       Klett asked why the MDC-which will likely hold similar presentations in a slew of member towns that include Wethersfield and Rocky Hill-voted on the proposal before coming to Newington.

       DiBella said that the Commission needed a â€"reserve” plan in place in order to restore the faith of bond rating agencies. The uncertainty of Hartford’s financial future has pegged the MDC as a risk, and it depends on borrowing for the funding of large infrastructure projects that make services more efficient for all Commission member towns, DiBella said.

       â€"Bankruptcy does not create confidence in the public markets,” he said. â€"We’re an infrastructure organization, and we borrow money constantly to make sure we have infrastructure and repair it.”

       DiBella said that if the other member towns are charged more to cover Hartford’s share of the tax, they would be reimbursed once the Commission is able to collect the delinquent revenue from the city.

      
STORY BY MARK DIPAOLA   |  Nov 23 2016  |  COMMENTS?