HARTFORD — The borough of Naugatuck is among the top distressed municipalities in Connecticut, according to official state rankings.
Using a set of demographic and economic indicators, the Department of Economic and Community Development ranks the state’s 169 towns and cities each year to identify the 25 most distressed municipalities in need of state help.
The city of Hartford had led the rankings for years until Waterbury moved to the top of the 2013 list. The state’s capital city dropped to No. 2. The current list includes a mix of some of the state’s largest cities, mid-sized communities and a couple of smaller towns.
After Waterbury and Hartford, the cities of New Britain and Bridgeport come next in the rankings, and the borough of Naugatuck rounds out the top five on the list.
The Naugatuck Valley cities of Ansonia and Derby rank No. 7 and No. 10 respectively.
The DECD scores towns and cities using a weighted formula based on income, poverty, employment, population changes, housing stock, education levels and property values.
The latter is a big reason why Naugatuck’s ranking has dropped to the fifth most distressed municipality, Mayor Robert Mezzo said.
“We had a massive amount of residential development in the 1990s and 2000s, and our grand list was heavily reliant on residential property values,” he said. “Then, after the downturn of the economy and our revaluation, we saw our property values drop 26 percent. That is a distressing event on any municipality.”
He said Naugatuck and Waterbury took a major hit in property value declines following the recession.
For each component, every town is ranked from 1 to 169, with the best town scoring 1 and worst 169. The top 25 towns with highest total scores are designated distressed municipalities.
For the 2013 rankings, the DECD gave Lyme — the town that topped the list of least distressed communities — a score of 182, compared to nearly 1,455 for Waterbury.
After Lyme, the four next lowest scoring towns were Warren, Oxford, Ridgefield and Granby. The towns of Bethany and Middlebury ranked 15th and 16th.
The 25 most and least distressed communities are spread out across the state. The least distressed towns have significantly smaller populations than the 25 most distressed communities.
State statutes provide distressed municipalities dozens of considerations and opportunities for state assistance.
Funding is available for acquiring open spaces, cleaning up and redeveloping polluted properties, supporting social services and financing economic development, transit, recreation, solid waste, housing and historic preservation projects
The Office of Policy and Management oversees a program that reimburses distressed municipalities for property tax exemptions for manufacturers.
The state will offset up to 50 percent of the revenue lost due to the tax exemptions. Reimbursements are prorated, if necessary, to the amount that has been appropriated for the payments-in-lieu-of-taxes.
Ron Pugliese, CEO of the Naugatuck Economic Development Corporation, said the designation of being the fifth most distressed community in Connecticut “means absolutely nothing” when it comes to attracting businesses.
“Taxes certainly play a role, but I think the most important thing for a company is finding the correct location,” he said. “They look for the proper building, a community they feel comfortable in and a good industrial park, which we have.”
Paul Singley contributed to this article.