Ansonia mayor urges support for June referendum to avert larger tax hikes after fuel‑cell contract fallout

Ansonia’s mayor told residents on Friday night that the city inherited a deep fiscal problem and urged voters to approve a June 1 referendum to raise the mill rate, saying that rejecting the measure would mean larger tax increases or steep service cuts in future years.

"I am determined to set our city back on the right course once and for all," the mayor said, describing hires of a full‑time controller and an outside consultant to review the city’s finances. He said the administration found widespread "budgetary negligence" and that the city is on the hook for a previously unreported fuel‑cell project and other unbudgeted costs.

Michael Iodise, the city controller introduced to the public at the meeting, presented audited trends showing revenues declining while expenses have risen and the city’s net position deteriorating from a positive $3.7 million to a loss of $11.4 million over three years. Iodise said the administration identified a roughly $10.4 million fiscal gap composed of proceeds from a past WPCA sale used for operating expenses, fund‑balance draws, $1.6 million of assumed fuel‑cell revenue that has not materialized, and more than $3 million in unbudgeted debt service tied to the fuel‑cell financing.

"What the trend is is you see that revenues are declining while expenses are increasing," Iodise said, summarizing the fiscal picture and explaining that a 26% tax increase would close the gap in a single year but called that scenario "impossible." Instead, the administration is proposing a more modest mill‑rate increase—roughly 6.3% to 30.35 mills for the coming year—paired with $200,000 in identified cuts and other efficiencies.

Consultant Tom Hamilton described a package of state aid the city will receive that materially improves the short‑term outlook, including $939,494 in supplemental education aid, $261,000 in one‑time casino‑related funding, and a one‑time $3,250,000 rescue appropriation secured by the city’s legislative delegation. Hamilton said the rescue funding is "truly extraordinary" but emphasized it is one‑time money and recommended a multi‑year budgeting approach to avoid another fiscal cliff.

Hamilton said staff projections show the proposed mill‑rate increase would cost the median single‑family homeowner about $336 a year (roughly $28 a month). Over two years, staff projected a two‑year cumulative effect in which the referendum‑approved path would result in a lower total tax burden than repeatedly using fund balance to hold taxes down.

Residents asked what would happen if the referendum fails. Iodise and Hamilton said the city could use fund balance to blunt this year’s increase but that doing so would exhaust reserves and produce larger increases in subsequent years or require cutting services such as the nature center, library, senior center, economic development programs and possibly reductions to public‑works services.

The fuel‑cell project—described repeatedly at the meeting—was a central driver of the shortfall. Officials said the city faces payment obligations tied to a roughly $37 million project and that the financing produced immediate debt‑service payments without accompanying project revenues. The mayor and staff described conflicting procurement steps involving two companies (Hyaxium and JCI) and said the city sent a letter to the state utilities regulator that complicated the contracting picture. The administration said it is negotiating with state agencies, utilities and other parties and will seek resolution; in the near term, staff proposed issuing temporary notes to cover debt service while negotiations proceed.

"We spent at least a couple hundred hours on this at [Department of Energy], PURA, clean‑energy bank, the governor’s office, the state house—25 people in a room—and we talked about how we’re going to get out of this mess," the mayor said.

Officials also raised other local issues during the meeting, including investigation of apparent utility overcharges on the city’s electric bills, the status of two vacant supermarket sites that have prospective developers, and reuse ideas for an older middle school building if a new school proceeds.

The mayor and staff urged residents to view the posted slide deck and other materials, to call city officials or legislators with questions, and to spread the facts to neighbors ahead of the June 1 referendum. "If you get five friends, family members—anyone—to vote in the referendum, that goes a long way," the mayor said.

Next steps: the administration will post updated slides and meeting files online, finalize the referendum ballot language, and continue outreach. The referendum date announced at the meeting is June 1; staff said the measure requires a simple majority to pass (50% plus one vote).