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8 Hartford Business Journal • October 23, 2017 • www.HartfordBusiness.com By Matt Pilon mpilon@HartfordBusiness.com I n Durham, a longtime selectman is urging officials and residents to consider taking an exceedingly rare step in Connecticut: merge with a neighboring town. Even for Durham and Middlefield — sis- ter Middlesex County communities whose finances are closely linked through a shared school district and transfer station — there are myriad hurdles (mostly political, some legal) to a merger, but the goal would be to find savings by eliminating duplicative staff and tightening oversight of the education budget, according to 11-year Durham Select- man John Szewczyk. A municipal merger could also be in the works in the tiny Windham County com- munity of Scotland, where matters are more urgent. Local officials, who recently warned that the town of approximately 1,700 is fac- ing insolvency, have asked the legislature about the possibility of being absorbed by a neighboring community, if one will allow it. It could also file for Chapter 9 bankruptcy — the same option being explored by the city of Hartford. Municipal mergers have rarely been considered throughout Connecticut's his- tory, and while a consolidation wave isn't expected, or even practical in many cases, the state's prolonged budget crisis — and the potential for reduced municipal aid this year and in the future — is spurring cities and towns to take a more pressing look at their limited options. The stress brought on by the state budget was further amplified last week when Moody's Investors Service assigned nega- tive outlooks to the credit ratings of 25 Con- necticut municipalities and placed another 26 under review for possible downgrades. Municipal aid is a major piece of the state's cash-strapped budget. Including formula- based education grants, capital programs and state payments for local retiree benefits, it amounts to approximately $5 billion a year — or a quarter of the entire state budget. For communities worried about how the legislature might close the deficit this year and in the future, merger discussions could be a reality, experts say. But most others might discuss greater levels of shared servic- es or "regionalization" strategies, which have had mixed success so far in Connecticut. "We're going to see tough fiscal years for the next decade," predicted Betsy Gara, presi- dent of the Connecticut Council of Small Towns (COST) and a Durham resident. "Most are looking at how they can consolidate ser- vices with neighboring communities." "Towns are exploring all kinds of options to look for ways to save property taxpayers any additional burden," she added. Kevin Maloney, communications director of the Con- necticut Conference of Municipalities (CCM), said nearly half of the towns the local government lobbying organiza- tion surveyed re- cently imposed some kind of spending freeze due to funding uncertainty. "The stress faced by towns this far into the new fiscal year is widespread because they have to see how they can best cope with the lack of state support three or four months into the new fiscal year," Maloney said. "It's been an unprecedented year." A tale of two municipalities Szewczyk has a unique lens on two very different communities. By day, he's a Hartford Police sergeant, who's been on the force since 2003 and was recently elected to a three-year term as the police union's president. Hartford has threatened to file for bank- ruptcy if the state doesn't provide it tens of millions of dollars in additional funding. Lawmakers last week said they had a ten- tative bipartisan deal that would help the city avoid insolvency, but the details weren't available at press time. Hartford has a $557 million annual bud- get, nearly half of which is underwritten by the state. It started the current fiscal year with a $50 million deficit. Mayor Luke Bronin, a Democrat, has been trying to squeeze significant savings from unions, but has largely failed to hit previously stated targets, including with Szewczyk's union, the largest in Hartford, which has been working without a contract for over a year. Szewczyk's members are hoping the state comes through with additional aid for the city. A Durham native, Szewczyk has been a selectman in town since 2007. It's a small community of 7,400 people with higher-than- average household income, an annual budget of approximately $31 million (much of it edu- cation-related), a volunteer fire department, no local police force and no bonded debt. A Durham-Middlefield merger might be cleaner because of the two towns' relatively small union workforces. Szewczyk said he wouldn't even propose cutting any union personnel. While Durham is feeling a pinch from a nearly $4 million cut in education funding under Gov. Dannel P. Malloy's executive order that's acting in the place of a budget for now, the town is in relatively good fiscal shape, Szewczyk said. However, Durham recently had to raise its mill rate from 35.3 mills to 39.5, which he thinks is too high. Szewczyk, a Republican who describes himself as a fiscal conservative, has floated the municipal merger idea for years. He said Durham and Middlefield are already connected in many ways and estimates a merger would trim $2 million in person- nel costs and add a layer of oversight over the education budget, which is roughly 80 percent of Durham's spending. With the state's budget future looking bleak, he thinks more people in town might take his idea seriously. Several municipal mergers have been con- sidered over the years, but few, if any, have ac- tually occurred, according to a recent report by the state Office of Legislative Research (OLR). There were merger talks between New London Municipal Mergers Amid long-term fiscal uncertainty, cities and towns weigh all cost-saving options Rep. Jonathan Steinberg (D-Westport) is a regionalism proponent. John Szewczyk is the president of the Hartford police union and a longtime selectman of Durham. In his latter role, he has called for a municipal merger with neighboring Middlefield — an idea that might take on more weight as towns feel the pinch from the state's budget crisis. PHOTO | CONTRIBUTED HBJ PHOTO | MATT PILON