One Rating Away from
State Takeover:
How Bloomfield CT's
Financial Crisis
Puts the Town on the Brink
READ THIS FIRST: What's Happening in Simple Terms
The Problem: Bloomfield has not finished its required 2024 financial audit. It is now one year late.
Why It Matters: Without audits, no one knows if the town has enough money to pay its bills. Credit rating agencies cannot rate a town without audits.
What Just Happened: S&P (a rating agency) lowered Bloomfield's grade from AA+ to AA. S&P warned it might stop rating Bloomfield entirely in 90 days.
What Happens If S&P Stops Rating: Connecticut state law says towns with no ratings can be taken over by the state. The state would control Bloomfield's budget.
What the Town Says: The town says it is working to finish the audit by February 2026. This is the fourth deadline the town has promised.
By Peter C. Frank | The Bloomfield Community Dispatch
KEY TERMS EXPLAINED
Credit Rating: A grade (like AA or AA+) that tells investors how likely a municipality is to repay borrowed money. Higher grades mean lower interest rates when borrowing.
CreditWatch Negative: A formal warning from S&P that a rating may be lowered or withdrawn soon. It typically lasts 90 days.
Rating Withdrawal: When a rating agency stops rating a municipality entirely, usually due to insufficient financial information.
Audit: An independent examination of financial records by a certified public accounting firm to verify accuracy and compliance with accounting standards.
MARB (Municipal Accountability Review Board): A Connecticut state board that oversees municipalities in financial distress. Has three tiers of increasing intervention.
OPEB (Other Post-Employment Benefits): The unfunded cost of providing health insurance to retirees. This is like a debt that grows each year.
Material Weakness: A serious deficiency in internal controls that auditors must report, indicating a high risk that financial statements could contain significant errors.
THE CRISIS TIMELINE
June 30, 2024: Town's fiscal year 2024 ends. Audit due December 31, 2024 per Connecticut law.
January 2, 2025: S&P Global issues report affirming Bloomfield's AA+ rating—even though FY2024 audit is already overdue.
January 3, 2025: Town publicly celebrates S&P "affirmation" on Facebook and website.
June 27, 2025: Moody's places the Town on review citing insufficient information.
June 30, 2025: The Town exhausts the last of its six one-month extensions, failing to file the FY2024 audit in violation of C.G.S. Sec 7-393 et seq.
July 18, 2025: Connecticut Office of Policy and Management sends Bloomfield a Municipal Finance Advisory Commission (MFAC) eligibility letter—the first tier of state financial oversight. Town does not publicly disclose this.
August 4, 2025: Town Finance Director sends letter to state OPM listing 13 reasons for audit delay, promises completion by September 20, 2025.
September 19, 2025: Moody's Investors Service withdraws its credit rating for Bloomfield, citing insufficient information.
September 20, 2025: Promised audit deadline passes—audit still not completed.
December 1, 2025: Third promised deadline passes—audit still not completed.
December 18, 2025: Town removes January 3, 2025 webpage celebrating AA+ rating. Page now returns 404 error.
December 30, 2025: S&P Global downgrades Bloomfield from AA+ to AA and places rating on CreditWatch Negative with "at least a one-in-two likelihood" of complete withdrawal within 90 days. Town issues public statement emphasizing the AA rating remains "strong" but does not mention CreditWatch status or withdrawal warning.
February 2026: Town's fourth promised deadline for FY2024 audit completion.
The State Takeover Threat
Bloomfield is now one credit rating withdrawal away from a potential state takeover of its finances.
On December 30, 2025, S&P Global Ratings downgraded the town from AA+ to AA. S&P also placed Bloomfield on CreditWatch with negative implications. S&P warned there is a 50% chance—or higher—that it will pull the rating entirely within 90 days if the town cannot finish its overdue 2024 audit.
This follows Moody's Investors Service withdrawing its rating entirely in September 2025, leaving S&P as Bloomfield's sole remaining credit rating agency.
Under Connecticut General Statutes Section 7-576c, municipalities with no bond rating are subject to Municipal Accountability Review Board (MARB) Tier III designation—the most severe level of state financial oversight. Under Tier III, the state can assume control of the municipal budget, reject collective bargaining agreements, and impose binding arbitration.
UNDERSTANDING THE STAKES
According to the Connecticut Office of Policy and Management, as of December 1, 2025, only 11 of Connecticut's 169 municipalities had not completed their FY2024 audits. Bloomfield ranks fifth in both population and budget size among these 11 towns.
However, Bloomfield is the only municipality on that list to have lost one credit rating (Moody's) and face imminent withdrawal of another (S&P), and the only one known to have received both a MFAC eligibility letter and a material weakness finding from its independent auditors.
Why is Bloomfield's situation different? The Dispatch contacted the Connecticut Conference of Municipalities to understand why other towns with overdue audits have not faced rating actions. According to CCM records, the 10 other municipalities with incomplete FY2024 audits either: (1) maintained timely submission of prior years' audits, (2) have smaller budgets and less complexity, or (3) have not yet undergone scheduled rating agency reviews. Bloomfield is unique in having a pattern of delays spanning five consecutive fiscal years combined with large OPEB liabilities that require annual monitoring.
What the Town Told You vs. What S&P Actually Said
In response to the December 30 downgrade, the Town Administration issued a public statement and created a new section on its "Truth & Transparency" webpage. The message emphasized that Bloomfield's rating "remains a strong investment grade rating" and attributed delays to "turnover" and technical factors.
A detailed review of both the town's public communications and the complete S&P Global Ratings report reveals significant discrepancies in what information was shared with residents and what independent financial analysts determined.
POINT 1: The CreditWatch Omission
The town's December 30 statement notes the change in rating from AA+ to AA. But it stressed that the the AA rating "remains a strong investment grade." It did not mention being placed on CreditWatch. It did not mention the warning that S&P might pull the rating entirely.
[Editor's Note: Following inquiries by The Dispatch regarding this omission, the Administration updated its statement on December 31st to include a link to the S&P Global report. However, the update still contains no mention of the withdrawal threat or CreditWatch status.]
S&P's report states: "The CreditWatch placement reflects that there is at least a one-in-two likelihood we could withdraw the rating within the next 90 days, depending on the town's ability to provide us with its fiscal 2024 audit."
WHAT THIS MEANS:
CreditWatch with negative implications is not a routine part of credit rating downgrades. It represents an additional and more urgent warning. According to S&P's methodology, CreditWatch typically lasts 90 days and results in one of three outcomes: rating withdrawal, further downgrade, or removal from watch status if the underlying issues are resolved. The town's public statement informed residents of the downgrade but did not disclose that S&P has formally warned of a 50% or greater probability that Bloomfield could lose its credit rating entirely within three months.
What the Experts Say:
Mary M. Fay, MBA, a former Fortune 50 senior finance executive and four-term West Hartford town council member who sat on its finance committee and ran for State Comptroller, strongly cautioned the "very serious" nature of these two actions:
"It’s one thing to be on a watch list for a future potential downgrade. This would indicate that the financial outlook is unstable, with potential for a subsequent downgrade. A 'suspension' is troublesome, as it indicates that the financial situation is in such a state that S&P cannot reliably assign a rating to data that is unverified; thus they are suspending the rating. I believe this is a very rare occurrence."
POINT 2: "Technical Delays" vs. "Weakened Management"
The town attributes audit delays to "turnover in key positions" and states it is "strengthening internal controls" and "modernizing our financial systems." The framing suggests procedural or technological challenges rather than fundamental management problems.
S&P states: "This adjustment weakens our overall view of the town's financial management practices... The lower rating reflects our downward revision of the management assessment." The report explicitly ties the downgrade to management quality, not technology.
WHAT THIS MEANS:
S&P's assessment framework includes a specific "management" category that evaluates financial policies, reporting practices, and operational stability. The downgrade was explicitly attributed to S&P's determination that management practices have "weakened"—not that the town faces technical obstacles. This distinction is significant: technology and staff transitions are temporary challenges, while weakened management assessment suggests S&P has reduced confidence in the town's ability to maintain sound financial operations.
POINT 3: "Transparency" vs. "Elevated Governance Risk"
The town has launched a "Truth & Transparency" webpage and states it is committed to keeping residents informed about financial matters.
S&P applies Environmental, Social, and Governance (ESG) risk factors to all municipal ratings. The report states: "Given the delays in financial reporting, we view the town's governance risk as elevated."
WHAT THIS MEANS:
In S&P's ESG framework, "governance risk" refers to institutional practices related to transparency, reporting, and adherence to legal requirements. An "elevated" governance risk designation means S&P has identified concerns about the municipality's ability to follow established rules and maintain reliable communication with stakeholders. This is separate from—and in addition to—the "weakened management" assessment. While the town characterizes itself as transparent, S&P's independent analysis has flagged governance as a specific risk factor contributing to creditworthiness concerns.
Note: S&P's "elevated governance risk" designation is a technical credit rating assessment focused on financial reporting timeliness and regulatory compliance—not a determination about individual conduct or motives.
POINT 4: Leadership Instability
The town frames recent staff changes as bringing "fresh perspectives" and "new leadership" to address challenges.
S&P's report notes: "Bloomfield has experienced regular turnover in the town manager and the director of finance positions over the past several years." The report directly links this turnover to audit delays and management assessment concerns.
WHAT THIS MEANS:
S&P's assessment treats leadership continuity as a key factor in evaluating management quality. The report does not characterize turnover as beneficial or as bringing fresh perspectives—rather, it identifies "regular turnover" as a contributing factor to the rating action. Credit rating agencies generally view frequent changes in top financial leadership as a source of instability that can compromise financial reporting reliability and policy consistency.
POINT 5: The Unfunded Liability Question
The town's statement emphasizes that its "financial position is strong" and that it maintains "healthy reserve levels."
S&P warns: "The town's other postemployment benefit (OPEB) liability is considerable, and we believe it remains a credit weakness." As of June 30, 2023, net OPEB liability was $75.8 million. The Police Retirement Plan is 59.2% funded.
WHAT THIS MEANS:
OPEB represents the town's obligation to provide health insurance to retirees—an unfunded liability of $75.8 million as of the last available audit. S&P explicitly identifies this as a "credit weakness." Critically, these figures are from June 30, 2023—now 2.5 years old. Because the FY2024 and FY2025 audits have not been completed, residents and investors have no current information about whether this liability has grown or how it compares to the town's current financial position. The town is now preparing its FY2027 budget using financial data that will be four years out of date.
POINT 6: The Pattern of Communication
S&P cited "elevated governance risk" as a primary factor in the downgrade. The pattern of public communication surrounding the rating provides context for this assessment.
On January 3, 2025, the town posted on Facebook and its website celebrating that "S&P Affirms AA+ Credit Rating for Bloomfield," stating the town's creditworthiness is characterized by a "stable financial operating environment." At that time, the FY2024 audit was already overdue, having been due December 31, 2024.
Following the December 30, 2025 downgrade, the webpage containing the January 3 announcement was removed from the town's website and now returns a 404 error. Connecticut's Freedom of Information Act generally requires government agencies to maintain public records, though municipalities have discretion in website organization and archiving practices. The town has not publicly explained the reason for the page removal.
On July 18, 2025, the town received a Municipal Finance Advisory Commission (MFAC) eligibility letter from the state—the first tier of state financial oversight. The Dispatch could find no public announcement of this letter. Town Council meeting minutes do not reflect discussion of the MFAC designation.
When Moody's withdrew its rating on September 19, 2025, the town issued a brief statement indicating the town remained rated AA+ by S&P and characterizing the situation as manageable. The town did not explain that Moody's withdrawal was due to "information quality" concerns—specifically, Moody's determination that available information was "insufficient or otherwise inadequate for the purposes of maintaining a credit rating."
Following the S&P downgrade announcement, former Town Council member Rickford Kirton asked on the town's public Facebook page whether S&P had warned the town earlier in 2025 that failure to complete the audit would result in a downgrade—a question relevant to understanding whether officials knew about consequences when celebrating the January "affirmation." Town Manager Alvin Schwapp responded: "I don't understand your question."
The Dispatch reviewed the January 2, 2025 S&P report referenced in the town's celebration. That report notes Bloomfield's fiscal 2023 audit was completed in June 2024 (six months late) but makes no mention of the fiscal 2024 audit timeline or any conditional warnings. However, S&P's December 30 report indicates the agency was clearly monitoring audit timing. What S&P communicated to town officials between January and December 2025 remains unclear.
WHAT THIS MEANS:
When S&P identifies "elevated governance risk," it refers to institutional practices related to transparency and accountability. The pattern documented above—celebrating ratings while audits are overdue, removing unfavorable information from public websites, declining to disclose state oversight letters, and difficulty answering direct questions about communications with rating agencies—provides context for S&P's governance assessment. These are facts about public communication, not judgments about individual character.
Note: S&P's "elevated governance risk" designation is a technical credit rating assessment focused on financial reporting timeliness and regulatory compliance—not a determination about individual conduct or motives.
The Underlying Crisis: What the Audits Reveal
The audit delays that triggered both rating actions are not merely procedural. Independent auditors have identified serious internal control deficiencies that raise questions about the reliability of the town's financial records.
The Material Weakness Finding (2023)
In the town's fiscal year 2023 audit—the most recent available—auditor CliftonLarsonAllen identified a "material weakness" in internal controls over financial reporting. This finding was labeled 2023-001: Financial Statement Close and was designated as a repeat finding from the prior year.
According to the audit report, a material weakness means "there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented or detected and corrected on a timely basis."
The auditors specifically noted:
- "The Other Employment Benefit Trust Fund had significant back and forth between us and the Town, resulting in adjustments to the fund and a revised actuarial report."
- "The Employee Health Insurance Internal Service Fund had significant back and forth between us and the town, resulting in a material reduction in liabilities and expenses."
- "The Wintonbury Hills Golf Course Enterprise Fund required significant entries to correct the balances of capital assets, accumulated depreciation, accrued liabilities and noncurrent liabilities."
- "The Town's Capital Assets required significant work by the Town, and revisions to create a footnote that tied to the Town's underlying records."
The auditors concluded: "The lack of controls in place over financial reporting increases the risk of misstatements, fraud, or errors occurring and not being detected and corrected in a timely manner, and the Town's financial statements would not be materially accurate without the above corrections."
The 13 Reasons Letter
On August 4, 2025, Finance Director Darrell Hill sent a letter to the Connecticut Office of Policy and Management outlining 13 specific reasons for the FY2024 audit delay. The Dispatch obtained this letter through a Freedom of Information Act request to the state. (A parallel FOIA request to the town for the same document remains unfulfilled after six weeks.)
Among the 13 reasons cited in the letter:
- The town's financial software system (MUNIS) was offline for an extended period
- The town did not reconcile transactions for over 15 months
- Financial staff tracked expenses manually on spreadsheets during the system outage
- Multiple staff members had administrative-level access to the financial system
- High turnover in the finance department and payroll office, with "a significant number of key department members leaving" in July 2024
- New management needed to complete "a significant number of reconciliations that had not been included in fiscal 2024 actuals"
The letter also outlined corrective measures undertaken by new leadership, including hiring additional finance staff, implementing new reconciliation protocols, and conducting comprehensive review of legacy financial records. Finance Director Hill indicated these measures were necessary to address systemic issues inherited from previous administration.
Five Years of Non-Compliance
S&P's report notes: "Bloomfield's last on-time audit occurred for fiscal 2020 and it has since not been compliant with state regulations on audit timing."
Connecticut law requires municipalities to complete audits within six months of fiscal year end. Bloomfield has been operating in violation of these timing requirements for five consecutive years.
What Happens Next: The 90-Day Clock
S&P's CreditWatch period typically lasts 90 days, meaning the town faces a deadline of approximately March 30, 2026. At that point, S&P will take one of three actions:
- Remove from CreditWatch: If the FY2024 audit is completed and S&P determines financial management has stabilized, the CreditWatch designation could be removed and the AA rating affirmed.
- Further downgrade: S&P could lower the rating below AA if audit delays continue but some progress is demonstrated.
- Rating withdrawal: S&P could withdraw the rating entirely if the town cannot produce adequate financial information.
The town has promised to complete the FY2024 audit by February 2026. S&P's report states the rating action depends on "the town's ability to provide us with its fiscal 2024 audit."
This is the town's fourth promised deadline:
- First promise: June 30, 2025 (broken)
- Second promise: September 20, 2025 (broken)
- Third promise: December 1, 2025 (broken)
- Fourth promise: February 2026 (pending)
What This Costs Taxpayers
Credit rating downgrades increase borrowing costs. When Bloomfield issues bonds for infrastructure projects, investors demand higher interest rates to compensate for perceived risk. According to Municipal Market Analytics, a one-notch downgrade (AA+ to AA) typically increases borrowing costs by 0.10% to 0.15%. On a $10 million bond, this translates to approximately $100,000 to $150,000 in additional interest payments over 20 years—costs borne by taxpayers.
The State Takeover Mechanism
If S&P withdraws its rating, Bloomfield would become a municipality with no bond rating. According to Connecticut General Statutes Section 7-576c, municipalities with no bond rating are eligible for MARB Tier III designation.
Historical Precedent: Four Connecticut municipalities have been placed under MARB oversight since 2017: West Haven (Tier III), Hartford (Tier IV, later downgraded), Sprague (Tier II), and Jewett City (Tier II). Hartford's Tier IV designation required state approval of all budgets and contracts from 2017 to 2021. West Haven remains under Tier III oversight as of January 2026. No municipality has regained full autonomy after reaching Tier IV.
Under Tier III, the Municipal Accountability Review Board can:
- Review and approve or reject the municipal budget
- Reject collective bargaining agreements
- Require binding arbitration on labor disputes
- Mandate specific financial policies and practices
- Require regular financial reporting to the state
- Exercise other powers deemed necessary to restore fiscal stability
Bloomfield has already received a MFAC eligibility letter—Tier I oversight—which the town did not publicly disclose. Loss of the S&P rating could trigger escalation to Tier III.
Requests for Comment (Updated)
The Bloomfield Community Dispatch submitted written questions to Town Manager Alvin Schwapp, Mayor Anthony Harrington, and Finance Director Darrell Hill on December 30, 2025 at 10:38 PM. Questions included:
- Why was the CreditWatch Negative status not mentioned in the town's December 30 public statement?
- What is the town's assessment of S&P's warning of "at least a one-in-two likelihood" of rating withdrawal?
- What specific corrective actions have been taken to address the material weakness finding identified in the FY2023 audit?
- Did S&P provide any warnings or conditional requirements when it affirmed the AA+ rating in January 2025?
- What is the current status of the FY2024 audit, and what assurance can the town provide that the February 2026 deadline will be met?
- Why was the July 18, 2025 MFAC eligibility letter not publicly disclosed?
- Why was the January 3, 2025 webpage celebrating the AA+ rating removed from the town website?
UPDATE (Jan 3, 2026): At 3:05 PM on Saturday, January 3, Town Manager Alvin Schwapp responded via email to The Dispatch's inquiry regarding these discrepancies. His full response read:
"Hello Mr. Frank,
We have no comment.
Very Respectfully,
Alvin 'Al' D. Schwapp, Jr."
The Administration declined to address the specific questions regarding the probability of rating withdrawal, the OPEB liability, or the removal of the January 3rd webpage.
This article will be updated if town officials provide further responses.
Primary Source Documents
All claims in this article are based on publicly available documents. Readers are encouraged to review these materials independently:
S&P Global Ratings Reports:
- January 2, 2025 - AA+ Rating Affirmation
- December 30, 2025 - Downgrade to AA with CreditWatch Negative
Moody's Investors Service:
Town of Bloomfield Official Statements:
- December 30, 2025 - Town's Response to S&P Downgrade
- Truth & Transparency Webpage
- January 3, 2025 - AA+ Celebration (Screenshot #1: now returns 404 error; Screenshot #2: original webpage celebrating AA+ rating)
Audit Documents:
State Documents:
- Connecticut General Statutes Section 7-576c (MARB Authority)
- OPM Municipal Audit Status Report (December 1, 2025)
- MFAC Correspondence (FOIA Request FOI-25-134)
Additional Analysis:
Transparency Note: This article is part of ongoing coverage of Bloomfield's financial governance. Previous reporting is available at The Bloomfield Dispatch. All source documents have been independently verified and are publicly available through the links provided above.
If this is not an absolute condemnation of Bloomfield's senior management, I don't know what is. Didn't the Council approve a handsome salary increase for Alvin Schwapp not that long ago? Based on what? His stellar performance? He owes that money to the taxpayers of Bloomfield. He deserves termination. And, if part of the problem is staff turnover, who is responsible for that? How many staffers has Alvin Schwapp driven off by intimidation and, as recently revealed, sexual harassment. This Town Council needs to wake up and deal with Mr. Schwapp. He is a liability to the town. We can't afford to keep him around. He serves at your pleasure. How can you possibly be pleased with his performance? If you are, that just signals that you are part of the problem.
ReplyDeleteThank you for another eye opening article. As a resident of Bloomfield all I have ever wanted and expected was transparency from the Town Council, Town Manager, and the Finance Director. These articles are evidence that that never happened. Extremely disappointing!
ReplyDeleteMore than 4 lies about audit completion. At February 18, 2025 Finance Committee meeting both Hill and Schwapp said it would be done by end of March or early April. As a matter of fact Hill bragged that they were approaching 70% complete in anticipation of being ready for auditors to do their part. Yet the list of tasks to be completed (meaning they weren't done yet) Hill told OPM on Aug 4 2925 is probably 70% of BASIC meat and potato audfit prep tasks. So no way what they told public on 2/18/25 was true. They continue to lie to the public and the Town Council allows it witth no repercussions.
ReplyDeleteTaxpayers and bondholders pay for their incompetence and duplicity.
As long as your articles start with ridiculous cartoons you cannot be taken seriously as a journalist or whatever you call yourself. You need lessons on a balanced article and less opinion. Unless you have no intentions of being taken seriously.
ReplyDeleteWe appreciate you sharing your perspective. The Dispatch is committed to transparent, fact-based reporting. While our visual style is modern, our content is strictly based on verified public records. If you believe a specific fact in our reporting is inaccurate or lacks context, we invite you to submit a 'Letter to the Editor' or a formal correction request at our contact page, including your name and location, so that your letter can be published. If your only attack is to use a logical fallacy against our choice of style, then we have no issue with that. Deploying logical fallacies as your only form of argument against an opponent shows you have nothing substantive to offer to the conversation. So if an ad hominem attack is all you can offer, by all means, have at it.
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