NEW HAVEN, CT — On Monday, Nov. 9, New Haven's Board of Alders Finance Committee voted unanimously to advance a $17.5 million bond proposal for the city's $16.5 million settlement with Adam Carmon. Carmon spent 28 years in prison before a court overturned his murder conviction, the New Haven Independent reported. His conviction stemmed from a 1994 shooting in which a baby girl, 7 months old, was killed and her grandmother was left paralyzed. The full Board of Alders will take up the proposal for a final vote.
Why the City Is Borrowing Instead of Using Cash
The Elicker administration wants to issue general obligation bonds to cover the Carmon payout, the same approach used for recent wrongful-conviction settlements with Vernon Horn and Marquis Jackson. In early October, alders approved $27 million in bonds for the city's share of the $30.5 million owed to those two men. The ordinance asks for an amount not to exceed $17.5 million. City Controller Michael Gormany said the extra room covers possible issuance costs if the city sells the bonds directly to a bank rather than through a public offering. Those costs could reach up to $1 million, according to the presentation to the committee.
Over 20 years, the Debt Service Impact Statement estimates $8.75 million in interest and a total long-term cost of $26.25 million. The deal itself cleared the city's Litigation Settlement Committee on Oct. 28, on the condition that alders sign off on the borrowing, the New Haven Independent reported.
Alders Question Debt Load and Credit Ratings
Westville Alder Adam Marchand, chair of the Finance Committee, challenged the administration to explain what alternatives it had considered, including the city's fund balance or a special levy paid up front by taxpayers. Acting Budget Director Ron Gizzi said he did not know how well a special levy would go over with taxpayers, and added that borrowing raises the budget and taxes either way. Gormany said the budget process would be the simplest point to add a special levy. Paying the settlement out of the fund balance, he said, would "certainly hinder the city from a cash flow perspective."
Marchand also warned that the city's capital borrowing for the coming budget year, FY28, could be squeezed. Gizzi said delaying school-facility and other infrastructure work would be difficult. East Rock Alder Anna Festa asked how the borrowing could affect the city's credit ratings, which drive interest rates. Gizzi said heavy borrowing would eventually hurt those ratings, though agencies might view settlements differently from irresponsible spending.