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Norwalk councilman has one track mind: budget, budget, budget

Norwalk Councilman Matt Miklave Feb. 22 2013 082

Norwalk Councilman Matt Miklave (D-District A) questions Finance Director Thomas Hamilton last week.

NORWALK, Conn. – A Norwalk mayoral hopeful is using the mayor’s plan to hire three police officers for Norwalk’s schools as an example of budget fallacies. He also points to a recent audit of the school department to illustrate the need for more oversight.

Common Councilman Matt Miklave (D-District A), who has formed an exploratory committee for mayor, said Thursday he is interested in running because the budget process is frustrating.

“I am tired of this nonsense. This is the eighth year I have been through this yearly nonsense and it doesn’t get any better,” he said.

Among other problems, Miklave said the process is flawed because it creates a dichotomy between the Board of Education and the city and lacks performance standards.

But there is no dichotomy, he said, using this year’s operating budget as an example: Mayor Richard Moccia and Finance Director Thomas Hamilton have budgeted for three additional police officers; Moccia says they will provide additional security at the schools.

“That shows me that when there is a need identified by the administration they will find a way to fund that need,” Miklave said. “I think that’s important. I don’t have a problem with that. But it is a false choice to say it is either the Board of Education or everything else in the city of Norwalk.”

The candidate then sent out another press release attacking the budget.

“About a week ago, while studying the city budget, we discovered an entry called ‘GASB Offset’ that no one on the City Council or anyone involved in Norwalk’s city government had ever heard of before,” Miklave said in the release. “It’s strange, because someone involved in our budget process had to have made it up.”

“This entry, which has gone undetected by the Moccia Administration for four years, is one that nobody examining the budget — not the auditor, not the current Board of Education staff, not the BOE members themselves, nor Norwalk’s City Finance staff has ever questioned.  The audit revealed that the city has been paying millions of dollars in health claims that should have been charged to the Board of Education,” he continued. “How is it that a Board of Education misappropriation of $1,000,000 to $2,000,000 per year had gone unnoticed by the Moccia Administration?”

Moccia did not return a request for comment.

BlumShapiro, an auditor hired by the city, attributed the problem to accounting practices currently used by both the city and the Board of Education, his press release said, explaining, “Neither City Hall nor the BOE can detect problems because they cannot track budget items vs. actual expenses.”

The lack of accountability extends to other areas of the budget, the press release continued.

“During this week’s City Council budget meeting, I found performance standards for various city departments also contained made up, arbitrary numbers,” he said in the release. “These assessments of individual department performance were automatically carried over from year to year, which could not have occurred if we were undertaking a regular, rigorous review, as I have been recommending.”

At Thursday night’s Finance Committee meeting, Common Councilman Bruce Kimmel (D-District D) agreed with Miklave that some of the performance standards they had found made no sense.

Miklave expounded at length about his problems with the budget process.

“Every year when this has come up I have said I would like the Common Council to have the authority and the responsibility to vote on line-item budget issues, he said. “I think it’s appropriate – we are directly elected by the people.”

He said the ultimate budget decisions are made by the Board of Estimate, and cited his issues with the false dichotomy and the council’s inability to oversee departments.

“Much of what Matt says is true,” Kimmel responded. “We should never forget, this pertains particularly to Board of Education. We are governed by state law. There is only so much anyone can do regarding the board of ed. We are governed by charter which cannot be changed willy-nilly.”

“I’m not talking about imposing our will on anybody,” Miklave said afterward. “I’m talking about having a common consensus negotiation and discussion about shared priorities, shared vision, shared future. It’s one city. We have to stop this nonsense that says we’re going to pit the Board of Education against everybody else.”

Miklave said he is still exploring his potential candidacy.

“I’m very enthusiastically receiving information,” he said. “We’re going to be making a decision pretty soon about what we’re going to be doing.”

Later, he said on Facebook that he hoped to have his exploratory committee website live by the end of the weekend, with a lot of content devoted to the budget. “If you are looking to the Cliff Notes version, talk to another candidate.”

12 comments

Chrissy February 26, 2013 at 8:03 am

Finally — In Matt Miklave we have a candidate for Mayor who’s willing to be straight with Norwalk voters and focus on the inevitable fiscal crisis. The federal government is cutting funding to CT state government which means the state will continue to cut funding to Norwalk. Matt Miklave is the only candidate who seems to understand that unless we address our budget problems, taxes in Norwalk may skyrocket. Meanwhile, Harry Rilling, Mayor Moccia and the other Dems. pander to voters with promises to expand this, built that and enhance the other thing… all without any explanation about how they’ll pay for their promised programs. I’ll tell you how…by dramatically increasing taxes. Meanwhile, Matt Miklave pushes for budget reform, performance standards and a fiscally responsible approach to solving our budget problems. Thanks Matt. Apparently, you’re the only candidate who knows we can’t solve Norwalks problems until someone (you) has the courage to stand up and speak the truth.

oldtimer February 26, 2013 at 10:05 am

GASP offset ?
Did anybody ever figure out what that meant ?
Was it eliminated from the budget ? Has anything ever been charged to it ?
He is right, the whole budget process is a joke and needs be brought into this century where every penny can be tracked.

Bruce Kimmel February 26, 2013 at 10:59 am

What Miklave said about the GASB Offset is true, up to a point; it is not an acceptable accounting term and it should have been questioned by BOE officials monitoring the insurance accounts. But it’s a little more complicated, and I believe Miklave strayed a bit from what really happened. The offset was, in fact, a deduction in the BOE insurance accounts based on the false belief that the city would be making up the difference. The mistake caused the BOE to under budget these accounts for several years. Why it was not quickly detected was because the BOE, at the time the offset was created, had close to $6 million in reserves in its insurance accounts. It took about four years for those reserves to be drawn down as the result of shortfalls caused by the offset. The BOE and the city only detected the problem when the reserves were essentially depleted and a true deficit appeared.

Bryan Meek February 26, 2013 at 12:07 pm

“Miklave expounded at length”

Long speeches won’t fix the problem.

NPS had an intergovernmental receivable with the City. The City did not have it as a payable. It showed up finally when the consolidated totals were out of balance at some year end point after the horse was already out of the barn. This is a control issue. I look forward to Blum’s recommendations before I draw conclusions. But, if we had a system that tracked actuals to budgeted items on a monthly basis with some automation that sent emails when a variance threshold is reached we might be able to catch these things earlier before they grow.

Steve Colarossi February 26, 2013 at 12:19 pm

The confusion regarding payment for retiree health benefits (referred to as “OPEB” expenses) stemmed from two issues.

First, nowhere in BoE budgets has there ever been an indication of any reserve funds that were held (whether by the BoE or by the City) which were used to offset expenses.

Secondly, the Finance Director’s March 2012 report to the BET regarding the 2012-2013 budget made a specific statement regarding payment of these OBPEB expenses (which can be found on page 3 of that report): “The proposed tentative budget for FY 2012-13 for the Board of Education is $159.5 million, a $4.7 million increase over FY 2011-12’s budget. Direct education funding represents 53.7% of the proposed budget. Additionally, approximately $22.0 million of expenses are contained in the City budget that directly supports the Board of Education. Specifically, debt service for Board of Education capital projects, pension contributions for non-certified Board of Education staff; workers’ compensation, general liability, and property insurance costs; OPEB expenses related to retiree benefit obligations, and City departmental support of Board of Education operations.” http://www.norwalkct.org/DocumentView.aspx?DID=2218 To his credit, Mr. Hamilton (who has been a public school parent and taxpayer) took the time during last year’s budget discussions to explain to the BoE’s Finance Committee the distinctions in the different types of OPEB expenses and clarified the misunderstanding that occurred so that it would not happen again.

Now,fortunately, with a highly-qualified Chief Financial Officer and a well-versed Chief Operating Officer working in the school department, the BoE has the tools to make informed budget decisions that rely upon accurate and up-to-date actual spending histories and more reliable projections.

jlightfield February 26, 2013 at 3:52 pm

Let’s not get caught up in the details of the the BOE situation. There is not a single department in City Hall that can produce a report on demand that as the Blum Shaprio audit states in the above article “Neither City Hall nor the BOE can detect problems because they cannot track budget items vs. actual expenses.”

Tim T February 26, 2013 at 9:55 pm

I like Miklave
At first not so much but the more I hear him talk the more I think he is the answer for Norwalk. I like the way he has the Republicans and fake Democrats scrambling for answers.
We all know Moccia is clearly not the answer
Rilling is just Moccia
Mangiacopra is just a kid
and
Andy who I did support seems to be asleep at the switch as we haven’t heard a thing from him.
I hope Miklave officially joins the race.

PMParkington February 28, 2013 at 6:34 am

“Neither City Hall nor the BOE can detect problems because they cannot track budget items vs. actual expenses.”

It’s 2013 and I can’t believe this City has no way of tracking expenses vs. budget, I’m totally shocked over this. Producing a monthly/Qtrly BCR, (Budget Comparison Report), is standard practice for every major Corporation/NPO since the begining of time. Even the most basic accounting software has this reporting ability….God help us.

EveT March 9, 2013 at 1:36 pm

I too am shocked at the statement “Neither City Hall nor the BOE can detect problems because they cannot track budget items vs. actual expenses.” So, the budget is just a fiction? How can this be?

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