Norwalk Council refuses to raise budget cap

From left, Common Council member Doug Hempstead (R-At Large), Mayor Harry Rilling and Corporation Counsel Mario Coppola chat Tuesday during a brief recess of the Council meeting in City Hall.

NORWALK, Conn. – The sausage making was in full public view Tuesday in City Hall, inspired by state budget uncertainty, described as “bizarre.”

The Common Council voted 8-5-2 to increase its 2017-18 budget cap, thereby denying a request from the Board of Estimate and Taxation as a two-thirds majority was needed. The Council then voted to reconsider. After 80 minutes of additional discussion, the Council voted again to not increase the cap, this time 8-6-1.

The BET requested an additional $8.7 million to cover the possibility of the state demanding the city pay one-third of the city’s teacher pension obligations, as proposed by Gov. Dannel Malloy. This proposal also includes requiring Norwalk Hospital to pay property tax, which would offset the cost of the pensions, but nothing will be decided until well after the BET must make its final budget.

The problem was partially that the city’s charter requires the Council to vote on raising the cap this week. Finance Director Bob Barron said he’s heard that the state may not have its budget in place at the traditional end of the legislative session, but may go into July and even August.

Mayor Harry Rilling, BET Chairman Greg Burnett and Barron said several times that the BET would not spend the $8.7 million if the state does not require the city to contribute to the pension expense but skepticism prevailed, with multiple hypothetical scenarios postulated:

  • What if the state makes the state pay the pensions, but doesn’t offset it with a revenue enhancing move?
  • What if the state allows the property tax but doesn’t require the city to pay the pension?
  • What if the city had an emergency six months from now and needed $9 million?

Finance Committee Chairman Bruce Kimmel (D-At Large) kicked off the 40 minute-round one by saying the city has been assured that the state will not require a teachers’ pension contribution without additional revenue to offset it, that the mill rate will stay at the 1.8 percent increase that has been talked about.

“Our fingers are crossed but this is what we have been told. It’s as close as you can get to a guarantee,” he said.

Council member Faye Bowman (D-District B) asked Barron how much the mill rate would go up if the pension requirement were made without additional revenue, with the answer being an additional 3 percent.

“I am not as worried about this upcoming year,” Barron said. “…Maybe their intention in long term is to have us pay the entire freight on the contribution on the TRS (Teachers Retirement System). I am not sure. But I think for this upcoming year, 17-18, I am confident that it will be a tax neutral impact. … The taxes will stay what they were at the BET’s public hearing.”

Council member Doug Hempstead (R-At Large) talked of adding an amendment that would ensure that the additional money in the cap could only be used if the governor’s budget required it.

“The BET is working in partnership with the Council,” Burnett said. “We are not trying to create some major slush fund or some piece of money that we could use unilaterally. Our intent is to work in concert with the Council, understand your wishes. I hear everything that is being said tonight. Our intent is to manage what is coming down from Hartford.”

“I am just not comfortable raising the cap in anticipation of something that didn’t happened yet,” Council member Rich Bonenfant (R-At Large) said.

Hempstead asked if the Council could rescind its decision to raise the cap.

Corporation Counsel Mario Coppola said no.

“Tonight is just creating room in the cap that allows the appropriating body to put in the budget that allows the payment,” Barron said. “But the actual payment could be negotiated and fought with the state for months into the fiscal year before we decide whether we are going to make the payment. The appropriation allows us to make the payment should we ultimately be required.”

“It’s not clear what’s going to happen down the road,” Kimmel said. “We could probably create a dozen or half a dozen hypothetical situations and get nowhere, because we don’t know… there has to be some trust but not trust in a void but trust based on experience.”

It’s an election year and Mayor Harry Rilling doesn’t want to be seen as imprudent with the city’s tax rate, Kimmel said.

A vote was held: Michael Corsello (D-At Large); Travis Simms (D-District B), Shannon O’Toole Giandurco (R-District D), Bonefant and Bowman voted no; voting yes were Nick Sacchinelli (D-At Large), Eloisa Melendez (D-District A), John Kydes (D-District C), Tom Livingston (D-District E), John Igneri (D-District E), Mike DePalma (D-District D), Michelle Maggio (R-District C) and Kimmel; abstaining were Steve Serasis (D-District A) and Hempstead.

Hempstead tried to make a motion right away, but Rilling had called a recess.  On his way out the door, Rilling, stopped to chide Hempstead for abstaining.

“Take a stand,” Rilling said.

When the meeting resumed, Hempstead made a motion to reconsider the vote.

That vote was 12 in favor.

This time, Hempstead made a motion for an amendment to the cap raising that would make it contingent on approval of the governor’s budget, specifying the pension issue.

“The governor’s budget at the very earliest will be approved the first week in June,” Barron said. “This cap authorization is for an appropriation vote on May 1st.  I have already heard may be delayed even beyond the start of our fiscal year. So, making the cap contingent on the approval of the governor’s budget is going to do us no good for the final budget that Norwalk adopts May 1st.”

The governor’s budget proposal is “such a departure from anything that I have seen in seven years, and some guys who have been doing this a lot longer than me,” Barron said.

If the pension payment is approved, “It doesn’t mean that we have to make the payment. Those discussions could go on for months,” Barron said. “(Increasing the cap) just creates the room to make the payment.”

O’Toole Giandurco proposed an amendment with different wording. Barron said the Council has no jurisdiction over the BET.

Simms dropped the capital budget into the discussion, firing off his objections to “taking a park from an urban community” to build a new school and to approving the funding for the school before passing a hurdle from the Connecticut Department of Energy and Environmental Protection (DEEP).

Simms and Bowman argued this was relevant because the capital budget has an impact on the operating budget.

“I don’t believe this cap discussion has any impact on that at all,” Barron said.

“Our backs are up against the wall with the word ‘if’ … some of us feel like we are spinning a roulette wheel with what the state is going to do,” Serasis said.

Kimmel said he’d vote against any amendments.

“There was a lot of thought a lot of discussion that went into this approach,” Kimmel said. “… It seems to be reasonable given the very difficult, crazy situation we are in. We are not going to make it less crazy. We are not going to dot every i and cross every t that is possible, we have to work this out together and the only way to do that is to have a little trust.”

The budget may have been discussed at length but the additional $8.7 million has not; it might be put on the taxpayers and deserves a full vetting, O’Toole Giandurco said.

Barron said he had mentioned the cap raising as a possibility back in February, quoting himself as saying, “Since it’s so bizarre let’s just wait.”

Sacchinelli asked if the BET could just make a special appropriation as needed.

“I think that is an alternative,” Barron said. “But remember, the special appropriation only addresses the expense side. … We are going to have to address the revenue side at future date.”

The attempted amendment failed, with eight no votes.

Bonenfant, Hempstead, O’Toole Giandurco, Serasis, Bowman, Simms and Maggio voted yes.

On the second vote to increase the cap, without an amendment, Hempstead’s was the only vote that changed, from abstain to no.

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