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Norwalk BoE purring like kitten over Common Council’s $500K slash

Norwalk Common Councilwoman Faye Bowman (D-District B), left, speaks her mind about a potential South Norwalk school, during Tuesday's Council meeting in City Hall. At right is Councilman Travis Simms (D-District B).

Norwalk Common Councilwoman Faye Bowman (D-District B), left, speaks her mind about a potential South Norwalk school, during Tuesday’s Council meeting in City Hall. At right is Councilman Travis Simms (D-District B).

NORWALK, Conn. — The Norwalk Board of Education is getting $500,000 less than it requested to begin work on new schools and school renovations, but no one is squawking.

The Common Council on Tuesday unanimously approved the 2016-17 capital budget that was recommended last week by its Planning Committee, which gives the BoE $2.5 million for its beginning steps in implementing recommendations from its facilities feasibility study, as opposed to the $3 million requested. The Board is instead getting a surprise $300,000 for asbestos abatement and $200,000 for paving.

This will allow Cranbury and Columbus Elementary schools to get paving work done this year, and the BoE is on board, Council members said.

BoE Chairman Mike Lyons confirmed the Board’s support.

“With $2.5 million still in the budget for facilities implementation, I believe this should be enough to do what we realistically can accomplish in the next fiscal year,” Lyons said in a late-night email. “Since at the present time we don’t know what specific projects we will actually be requesting the Common Council to authorize (i.e. – new school at Nathaniel Ely, K-8 at Naramake, etc.), it looks like the date when we would be submitting the SCG-049 {grant application to the state} is June 2017.  We certainly need some money to get us to the point where we are ready to submit the required forms to the State by June 2017, but we don’t need all of the money necessary to complete detailed design and construction/bid documents now.”

The Council will be sensitive to the BoE’s needs for funding, whether later in this cycle or in the next year’s capital budget, Council President Bruce Kimmel (D-At Large) said, calling this a “have your cake and eat it too” situation.

The resistance in South Norwalk to the idea of a new school also entered the short conversation.

“We want to make sure it is heard that we don’t want anything to be done as far as a school in South Norwalk for the next two or three months because we are definitely still in the phase of listening to our constituents to make sure we know what they want and that that is the best thing for our community,” said Faye Bowman (D-District B). “So … if I understand from an email and different conversations, that will not be happening in the next two to three months with this funding.”

Doug Hempstead (R-At Large) gave Bowman a “shout out” for bringing the asbestos concerns to everyone’s attention.

No one is concerned about airborne asbestos, Bowman said.

Planning Committee Chairman John Kydes (D-District C) said the issue is asbestos tiles under carpeting. This was mentioned last week: the tiles are not a problem unless the carpet is pulled up.

“We are compliant with current asbestos procedure,” Kydes said Tuesday.

Lyons explained all in his email:

“Our original request for $3.0 million for the Facilities Plan, which was submitted prior to the receipt of the Silver Petrucelli study in order to meet the Charter-imposed capital budget deadline, was based on a placeholder figure that estimated that we would be requesting at least $100 million in capital funding for the next five years, and this was to cover the 6% fee for architectural services ($6.0 million total) (to be funded in the first two years of the capital budget, with $3.0 million in FY 2016-17 and $3.0 million in FY 2017-18).  The 6% is fairly standard for these kind of projects, and that was the basis for the request (see this pdf).  At this stage, I would say that our actual cash outlay next year may be less than $3.0 million.  However, the magnitude of the capital needs are larger than even the $100 million we had estimated earlier, so in order to undertake a capital program of the magnitude recommended by Silver Petrucelli, we will clearly eventually need substantially more than $6.0 million for design services.  So while we can make do with $2.5 million next year, the eventual total cost of the design work for the program will be larger.

“… All this is to say that I think that $2.5 million should be sufficient to cover the work we will need to accomplish over the next 12 months, and will provide funds necessary to begin design work after we submit our SCG-049’s in June 2017.

“The Council members had two issues that they wanted to shift funds to – paving and asbestos abatement.

“Doug Hempstead was apparently concerned about previous paving appropriations not being spent yet.  I explained to him that we did receive money for paving in the FY 2014-15 and 2015-16 capital budgets.  When {Norwalk Public Schools Chief Financial Officer Thomas} Hamilton noticed that these funds had not yet been expended in January, he instructed {NPS Director of Facilities} Bill Hodel to work with the DPW to get these projects lined up, which he has done.  DPW has been helpful in assisting the Board Facilities Department to undertake these projects and has included Board paving work in its upcoming paving program for this Spring/Summer.  Most of the BOE’s paving funds are currently encumbered to FBG Construction.  I know that they plan to repave the Marvin school parking lot and driveway this year, and one other school.   This additional money should let us do another school or some smaller projects.

“On asbestos, I was asked by John Kydes and Tom Livingston {D-District E} if we would be able to implement the asbestos removal plan now with this funding. I noted that we wouldn’t do all asbestos work this year.  This is a several-years-long project, particularly given our expansion of the summer school program to all elementary schools this summer as part of our effort to institute true Tier II and Tier III interventions to help disadvantaged students and close the achievement gap.  Here are the details on the asbestos plan as explained to me today by Tom Hamilton and Bill Hodel:

“‘It is not a present safety issue.  We are in compliance with the law with an asbestos management plan currently in place, and we are not required to abate non-friable asbestos.  However, its presence raises issues and periodic problems (when we try to undertake other work that cannot be undertaken until asbestos abatement is undertaken).  For instance, at Cranbury we have two kindergarten classes that require carpet replacement.  We can’t replace the carpet without first abating the asbestos.  In other cases, tiles have started to come loose, in which case we need to address it as a safety matter at that point.’

“Bill Hodel intended this to be a long term, proactive program that would eventually lead to the removal of all asbestos in the district.  The $500,000 is not the entire cost of the program District-wide; it’s just a start. Bill had projected to spend $500,000 per year in each of the next five years.  Note that to the extent we proceed with the Facilities Plan build-out, some of these abatements could be done along with the new construction projects (e.g., conversion of Ponus to K-8 could include any needed abatements at the existing school).  We will factor that into our overall capital improvement plan for future years.

“As noted before, the asbestos removal only becomes necessary (other than when new construction starts) when the carpeting is replaced.  Asbestos removal would not be possible this summer as it would shut down the new school-based K-3 summer school and parents have already been notified of the times and locations. With proper planning, we would be able to perform the removal during the Winter break, April break and June of 2017. With advance notice we will plan to change the schedule of school-based summer school as needed at the affected elementary school next summer and in subsequent summers.

“Bill Hodel tells us that the original request for $500,000 was based on asbestos abatement at Fox Run (B-Wing) plus office, Cranbury B-Wing plus library and office, and Wolfpit boiler room and library.  Those estimates assumed the schools were completely empty, so they do not include the premium that would be required if a school is partially occupied.  With $300,000 we should be able to do one of the schools (we would recommend Cranbury), if we are able to close one wing off and segregate it from the rest of the school.   Other schools would then be addressed on an on-going basis and as part of the long-term Facilities plan.”

Kimmel also took time for what he called an annual event: explaining why the Council doesn’t just add more money to the capital budget.

“There is only a certain level of debt that the rating agencies will allow and keep us at a triple A rating. We have always been within those thresholds. That is one of the reasons we have been able to maintain the triple a rating and borrow the money that we are spending at such a low interest rate,” Kimmel said.

Capital budgets are usually in the $46 million ballpark, he said.

“This year, and I credit the mayor for this, it’s a little higher, our capital expenses, because we are aware that we have really got to begin to move on certain things in the city,” Kimmel said. “We are making a lot of progress and now is not the time to slow down.”

 

4 comments

Bryan Meek April 13, 2016 at 9:09 am

The school system is currently levered only 7% of what we can legally borrow, down from 17% a decade ago.

The city side is at 27%, up from 17% a decade ago.

This is according to the city’s latest annual report. See page 157.

http://norwalkct.org/ArchiveCenter/ViewFile/Item/10146

Overall, the city’s debt is 17% legal limit. Down from 20% 10 years ago when we still had Aaa rating. To get to 20% today, the city would have to borrow an additional $67 million.

Debt ratings are important, but how much indebtedness one incurs is only one side of it. It also takes into consideration an entities ability to repay the debt and the return on investment potential. Don’t take my word for it this is what the regulators and agencies have to say about it.

http://www.sec.gov/investor/alerts/municipalbondsbulletin.pdf

https://www.moodys.com/sites/products/AboutMoodysRatingsAttachments/MoodysRatingSymbolsandDefinitions.pdf

Looked at another way, if we don’t fix up our buildings etc… it could hurt the city’s ability to collect taxes, which would have a far more devastating effect on the debt rating than our credit limit.

Consumers of real estate have given us their view. Norwalk’s property values are 80% of pre-recession levels, while all surrounding towns have recovered 100%. Some more. This represents an average loss in valuation of our homes of roughly $100,000 per dwelling. That’s a hidden tax you get to pay if/when you sell your home and possibly a warning to others not to buy a home here.

I appreciate the council being fiscally prudent. $500k is a lot of money and the projects set aside are worthy. But, being penny wise pound foolish is no way to run a city worth $17 billion that could potentially be worth a lot more with proper investment.

Bruce Kimmel April 13, 2016 at 10:44 am

Correction: Capital requests are around $46 million. The final capital budget is roughly $29 million

Bryan Meek April 13, 2016 at 12:54 pm

Page number 117 of the CAFR (page 157 of the pdf) lays it all out.

http://norwalkct.org/ArchiveCenter/ViewFile/Item/10146

Now if you go over to the city’s proposed operating budget on page v (pdf # 12), you can see the amount of debt we plan to pay down of $26.5 million.

http://www.norwalkct.org/DocumentCenter/View/9079

So with the $29 million new debt this year, we will have increased our debt position by a total of $3 million. Ironically and coincidentally, this is the same amount the BOE asked for.

For the city to have as much debt as we did only 3 years ago at 20% we would need to borrow an additional $64 million. Not saying that we should. Only that we could and still maintain Aaa. This is very promising for our prospects of building the school capacity we need.

Rick April 14, 2016 at 6:05 pm

No one is concerned about airborne asbestos, Bowman said.She is right history tells Norwalk taxpayers that.It was airborne in the old police station they cleaned that up after the new station was built but in a window of a year the parks dept used it no one cared about them then as well. History seems to repeat itself in Norwalk.

we have two kindergarten classes that require carpet replacement.Just a mental picture of a child playing on the floor not even an inch away from asbestos where non professional workers from a cleaning company knowing nothing about whats underneath pulls a rug while cleaning is somewhat horrendous if I was a parent.Anyone ever suggest the lungs of a child is more likely to pick up airborne than an adult? Lets be glad these kids don’t play on the floor.

Might as well ask what about radon? It was an issue once but not anymore? Radon cracks along the foundation is seldom covered by carpet. Where is our environmental task force what is there finding on the dangers of asbestos in our schools.Is there any problems from radon remediation that can effect asbestos being introduced into the environment ?

‘It is not a present safety issue — tiles have started to come loose, in which case we need to address it as a safety matter at that point.’ maybe running for state office would be the next step.

You have to wonder how long this has this been a potential problem for the children or the teachers who have been in the ares of concern?

Norwalk has hired environmental professionals in the past some of those companies came under scrutiny after the jobs were done some lost their licenses not from Norwalk jobs but from jobs within the State so relying on someones word that isn’t a professional when it comes safety of our children is throwing the dice.

I would hate to think saving our triple A standing over environmental issues isn’t driving the rest of the council.Its obvious some care more than others.Those moving into the city i bet will care a lot more about the safety of their kids than the octogenarians that don’t.

This clearly shows experts should help our council members in understanding whats going on,not the ones on the payroll but the ones who have dealt with school asbestos projects before in other cities that have closed the schools and done the work.

Im not suggesting anyone has done anything wrong its the trust factor when you read into some of the meetings concerning issues like this. Its hard to talk fiscal when talking health and welfare .More in depth information the boards are using should be shared maybe trust can be earned that way otherwise its questions no one wants to hear.

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