Despite relief for Hartford in the recently approved state budget, city leaders will continue to negotiate with bondholders and employee unions, Mayor Luke Bronin said Monday, hinting that he'll pursue concessions from both groups.
The budget deal greenlighted by the General Assembly Thursday calls for the capital city to receive at least $40 million in additional revenue — half from an account set aside for distressed municipalities, and half through state-subsidized debt payments.
State officials say Connecticut will pick up $20 million or more of Hartford's annual debt contributions.
As part of the agreement, the city would look to refinance its debt — reducing upfront costs by pushing payments farther into the future, while increasing the amount of interest — and it would be placed under an oversight board.
But Bronin said Monday that more work is needed to create a long-term solution.
"Bondholders will need to recognize that in this current fiscal climate — I don't think anybody should expect that there's going to be an ever-increasing stream of revenue from the state," he said at a forum on municipal debt in Stamford. "And so if you want to build a model that is sustainable … then I think they will recognize that something has to be done in partnership."
He did not offer specifics. Through a spokesman, Bronin later declined to say whether he'd seek concessions.
Moody's Investors Service has noted that Hartford faces operating deficits of up to $80 million per year through 2036, and predicted a "likely" default on debt as early as November without significant givebacks from bondholders and employee unions, along with additional state aid.
The mayor said Monday that he hasn't ruled out refinancing some of the city's $600 million in outstanding debt, but it would be one part of a comprehensive overhaul.
Hartford's annual debt service, estimated at $30 million this year, is expected to rise to more than $60 million by 2021, a figure Bronin has called "unmanageable."
City bond insurers Assured Guaranty and Build America Mutual declined to comment on the mayor's remarks at the panel discussion. In recent talks with city leaders, both companies have suggested that Hartford refinance its debt to reduce the escalating payments and avoid default.
Bronin said Monday that he is willing to consider it as part of a broader effort, but he would stay away from any plan that "kicks the can" down the road.
The mayor also said he would continue negotiating with Hartford's unions. He is counting on at least $4 million in concessions this year to balance the city budget.
"We can't view success as getting to the next budget cycle," he said. "We've got to be focused on actually fixing the problem, not faking it.
"If we don't deal with that mountain of debt … and if bondholders aren't a part of that solution, we'll be facing this same crisis a year and a half down the road, or two years down the road, or three years down the road."
Bronin warned in September that he would file for bankruptcy if Hartford didn't get the extra state aid it needed soon.
He backed away from that threat last week after the state budget cleared the House and Senate by wide margins. The plan still needs approval from Gov. Dannel P. Malloy.
