BRIDGEPORT, Conn. -- A state oversight board met here yesterday afternoon and declared that, notwithstanding Bridgeport's recent filing for bankruptcy court protection, the city still must devise a balanced budget for the fiscal year beginning July 1.
The Bridgeport Financial Review Board voted 11 to 0 to force the city to adopt by June 28 a 71.2 mill rate property tax, a levy that Mayor Mary C. Moran has deemed too great for the city's ailing economy to handle. The tax would amount to $71.20 for every $1000 in assessed property value.
James Tansley, president of the Bridgeport Common Council, yesterday said he would advise the city's legislative body not to adopt the tax increase prescribed by the Financial Review Board. On Monday, day, the city's common council voted for a rate of 63.3 mills.
Assuming the city does not adopt She proposed tax increase, the state is likely to seek a writ of mandamus compelling it to comply with the review board's declaration.
But Richard D. Zeisler, a bankruptcy attorney for the city, said there was a "good chance" that the city's filing under Chapter 9 of the Federal Bankruptcy Code would shield Bridgeport from any intrusive action by the state. He added that it was unclear where the state would file its request for writ of mandamus.
Before yesterday's meeting, Mr. Zeisler criticized a motion for dismissal filed in bankruptcy court this week by Connecticut Attorney General Richard Blumenthal as "pretty ordinary" and "garden variety."
"It's not presented in any unusual way," he said. "There are no surprises except their claim of bad faith" on the part of the city in claiming insolvency and seeking protection.
Furthermore, the 1998 legislation establishing the Review Board did not impose any specific constraints on the city's ability to file for bankruptcy protection, he said, adding that even if the laws did contain such constraints, they might not be enforceable.
"Otherwise, there would be a constitutional clause saying, 'No bankruptcy anymore.' [You] can't sign away that right."
Mr. Zeisler also said he was enthusiastic about his involvement in the case: "I don't know if it's a bankruptcy lawyer's dream," which he defined as a "terrific case with a rich client."
"We have part of that," he said.
In other developments yesterday, Mr. Zeisler and other attorneys met with representatives of the state and succeeded in freeing up nearly $500,000 of clean water fund aid that State Treasurer Francis L. Borges had threatened to withhold after the bankruptcy filing.
"We have been working cooperatively," Mr. Borges said, to develop an agreement "that protects that city's interests but also protects the state's interests."
Mayor Moran, who arrived at the meeting an hour and 15 minutes late after testifying in Washington, D.C., on the plight of her city, lauded the news of the clean water fund agreement. She also said she had been well received in her visit to Congress yesterday.
Mayor Moran said she had been prompted to file for bankruptcy in the face of a $55 million gap in her nearly $320 million budget for the coming year and a gap of $288 million over the next five years.
She said she had realized that without the relief offered by Chapter 9, "there would be no future for the city of Bridgeport. Board it up. Divide it up. Annex it. Give it away."
