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Rilling predicts Rainy Day drawdown, no new tax bills

Mayor Harry Rilling listens to Finance Director Bob Barron at a recent Board of Estimate and Taxation meeting in City Hall.

Updated, 2 p.m.: Information from Bob Barron.

NORWALK, Conn. – There’s $47 million in Norwalk’s “Rainy Day Fund,” but that’s likely to take a hit Monday when the tax board deals with the state budget results, Mayor Harry Rilling said Saturday.

The hiring freeze is likely to be lifted and a significant amount of money drawn down from the Rainy Day Fund to cover a shortage in state funding, he said.

The total of the money in the Rainy Day Fund is no secret, he said, after being asked about criticisms levied by Board of Education Finance Director Bryan Meek.

Meek, in a Friday email to NancyOnNorwalk, said, “At this point we don’t even know what the rainy day fund balance is right now after June 30th 2016.  With 18 months of full experience since that date we have not heard one update from the city as to how much it exactly is.  I am told that these numbers are actually discussed in BET {Board of Estimate and Taxation} meetings but for some reason the dollar amounts never seem to make the meeting minutes as if it’s irrelevant.”

“It’s public information,” Rilling said Saturday, asserting that there’s no secret and that the figures are regularly discussed by Finance Director Bob Barron.

The Rainy Day Fund has about $47 million in it, up from $42 million last year, he said.

Last year, for the 2016-17 operating budget, city leaders included a $3 million draw down from the general surplus, or Rainy Day Fund.

“Sometimes when we (plan to) draw down on the Rainy Day fund, at the end of the year when reconcile our entire budget we don’t have to take it out,” Rilling said Saturday.

This year, city leaders formulated an operating budget without having any certainty as to what to expect in state funding.

State legislators approved a budget in late October, well past the June 30 deadline. Gov. Dannel Malloy signed it Tuesday.

Barron said Wednesday that he didn’t know yet what Norwalk’s funding would be, that he had preliminary numbers but needed to find out the impact of Malloy’s line item veto of the hospital tax.

“It keeps us about where we expected we would be. We’re still analyzing it. We’re going to lose some funding,” Rilling said Saturday.

At Monday’s BET meeting, “We are going to be looking at the impact on Norwalk,” Rilling said Saturday. “By that time, we should have the full picture. Then we can determine how we are going to move forward, what we need to do to help the school board, which we are going to do, and what we need to do to help the city.”

The hiring freeze will likely be lifted and, “As it stands we are in pretty good shape,” he said, pointing out that the city’s policy is to maintain a Rainy Day Fund that is no less than 10 percent of its annual budget.

The 2017-18 operating budget is $343,164,976; 10 percent of that is $34.3 million.

Barron, in a Monday email, compared last year’s state budget document to this year’s Senate Bill 01502, which was signed by Malloy on Tuesday.

Unlike other cities in Connecticut, Norwalk will not have to issue a supplemental tax bill, Rilling said.

“This will provide you with specific grant information for five grants impacting Norwalk, but unfortunately, there are several others not named that make up the bulk of our funding, specifically: ECS, LoCIP, Town Aid Road, and a small Adult Education grant.  The bills also give you information on Priority School and Excess Cost grants, but only at the state level,” Barron wrote.

SB 1502

SB 501 2016

Barron wrote:

“One of the difficulties of this type of analysis for any named grant, is that this year’s funding may indeed represent an increase over what a city actually received last year, but not an increase over what the state had budgeted to give that city last year, for example:

 

  • “A city may have been budgeted to receive $1,000,000 in the adopted FYE 2017 state budget, but
  • “actually received only $800,0000 so when the state publishes a grant funding amount of
  • “$900,000 for FYE 2018 it is indeed an increase over what the city actually received, but
  • “not an increase over the adopted budget.”

 

“I will share the preliminary estimates for all of the major grants tonight that I’ve received from CCM. “

 

“I have always believed that the money in the Rainy Day Fund is not mine,” Rilling said. “It belongs to the people of the city of Norwalk and if we can help lower taxes in any way that we can, that’s what we should do.”

On Sunday, Meek emailed Barron an FOI request, saying that he, as BoE Finance Chairman, could not find out how much is in the Rainy Day Fund.

Rilling was not available late Sunday for comment.

Barron in February mentioned a proposal from the Board of Education for a $17 million draw down.

That was not an official position of the Board of Education, only Meek’s position, Council Finance Committee Chairman Bruce Kimmel said at the time.

“Our rainy day fund under current leadership is designed to help bail out the governor for his irresponsible spending and total lack of control of our state’s finances,” Meek wrote Friday. “It would be really nice to know what the actual rainy day fund balances right now. Under our current government structure citizens are only privy to what was done and reported on the city’s Consolidated annual financial report effective from June 30th 2016 unless they subject the information to a Freedom of Information Act request.”

“We were very, very responsible in holding the line on our Rainy Day fund and we are not going to have to send out a supplemental tax fund, as other communities will,” Rilling said Saturday. “If we had pulled down, wouldn’t have it now.”

9 comments

Sue Haynie November 6, 2017 at 6:18 am

Norwalk is over-taxed and gets $0.06 back for every $1.00 it sends to Hartford.

Most other Connecticut cities eat Norwalk’s lunch. So, it’s little consolation that ‘Unlike other cities in Connecticut, Norwalk will not have to issue a supplemental tax bill, Rilling said.”

Rilling advocated for a veto of a state budget that would have left Norwalk whole. So here we are.

Bryan Meek November 6, 2017 at 6:55 am

I’m calling for a change in city policy and an immediate allocation of 52% of these funds to be put into a rainy day fund specially marked for education. This nonsense of holding onto this information for so long, up until 24 hours before an election is exactly why we need this change. This is not the mayor’s, nor the Finance director’s goody bag.

Nancy, you also left the part out where I asked for these numbers a week or so ago and was denied the information.

Bryan Meek November 6, 2017 at 7:12 am

Here is the exact text of my FOIA request that was delivered over the weekend (and to NON and the HOur as well).

Dear Mr. Barron,

Pursuant to the Freedom of Information Act, I hearby request the most recent unaudited trial balance of the City of Norwalk’s General Fund balance from it’s Munis General Ledger System be provided to me without delay.

It is my understanding that you are reluctant to share the people’s information and have denied the NPS Finance Department’s request (at my request) to provide this data, citing the reason that the external audit has not concluded on the City’s 2016/2017 fiscal year.

This is not acceptable that the City’s largest department (Norwalk Public Schools) should have to guess as to the health of the City’s financial reserves in the midst of creating budget proposals for the FY 2018/2019 year.

The city’s financial health, whether audited or unaudited, should not be a matter of your department’s privilege. The last number that has been made available to the public is reflective of the June 30th, 2016 closing date. Operating on 16 month old data is not just archaic, but does a tremendous disservice to the city’s stakeholders.

Please expedite this request so as to avoid further costs to the city in the form of unnecessary paperwork and counsel intervention. A summary trial balance is sufficient and this request should not bear the burden of producing unnecessary volumes of paper to meet it.

Thank you and regards,

Bryan Meek, CPA
NPS Board Finance Chair

Bryan Meek November 6, 2017 at 8:03 am

It will be interesting to see if the Mayor’s interest in bailing out Malloy is matched by his commitment to Norwalk. Will the BOE be denied it’s ~$460k in surplus funds that have been withheld from their budget. Will the commitment to fund the SPED appropriation for a third year be kept? Or will it take several more months (on top of the several months we’ve been waiting since our requests for surplus funds were denied) to make the BOE’s budget whole, while it only took less than 48 hours for him to suggest we could bail out Malloy to the tune of $5 or 10 million? Parents keep watch.

Stephen L Horvath November 6, 2017 at 8:04 am

It can be said man or woman makes their own path, It nice to see someone digging in and doing their own work. What you sow, you reap, what your give you get. What you see it other exist in you, Others, too see your ability. Those that do are encourage to make the time and the effort and to “Make Your Vote Matter”. Truly, Lisa Brinton, can make things happen. Your next two years of policy are in your hands, your next tax bill will be in your hands and the Next Mayor, Lisa Brinton who will make a difference in Norwalk is also “In Your Hands”. My mind is open, and voting along party lines no longer applies, rubber stamps are no longer aloud..Research is a must and nothing should be given just for the sake of a party. A weak candidate never stands a chance, that been proven, we need some one who is not afraid to get out in front, regardless of the pressure from their handlers..An Independent conservative minded leader is what we need. Hopefully that what you, the Norwalk Taxpayer, will rally behind on Tuesday. Get out an Vote makes you the Shepard, staying at home and your the Sheep…

Donna Smirniotopoulos November 6, 2017 at 10:11 am

So the City of Norwalk has “about” $47,000,000 in a “rainy day fund”, which the mayor says he doesn’t think of as his money. How nice! “About” isn’t a word often heard in finance and accounting circles. But Finance Director Bob Barron is comfy with “about” when discussing the City’s cushy layaway plan. Since the money belongs to us and not to them, it would be nice to have an exact figure based on a reliable financial report instead of vague quotes in the millions from the mayor, who adds to ease our misgivings, “I have always believed that the money in the Rainy Day Fund is not mine.” Whew! That’s a relief.

Under a Rilling-imposed spending freeze, the CC approved nearly half a million to purchase new police cruisers. And voila—in a surprise move to exactly no one, the police union gave their former chief their endorsement. A few days ago, Rilling suggested updating the City’s “fleet” to more energy effecient vehicles. Instead of a chicken in every pot, it’s six cylinders under every hood.

Unless the voters know exactly how much is in this fund, we cannot make informed decisions at the polls tomorrow. The failure of this administration to release a financial statement, preferably audited, before an election is not an encouraging sign. “About 47 million dollars” in short term aggressive investments could yield serious fruit to the person handling the money given market performance over the past year.

carol November 6, 2017 at 10:35 am

some transparency by Bob Barron would be refreshing. If the mayor asked for these figures he would have them in less than 24 hrs.
thank you Bryan Meek for demanding the answers that we are entitled to.

BoardWatch November 6, 2017 at 11:04 am

A surplus… really Mr. Meek be honest with the city, the tax papers, and teachers and most importantly the students. The surplus is created by design. A budget freeze and the denial of supply orders leads to this so call surplus. Many of you are as transparent as mud.
Someone should investigate this FAKE NEWS talking point.

Donna Smirniotopoulos November 6, 2017 at 12:50 pm

@Carol, I can get my hands on my fund balances in about 30 seconds. I’m sure any of us can. But as citizens we are supposed to be content with “abouts”. The written finance policy under the previous Finance director was a range of 7.5-15% of the operating budget, with falling somewhere in the middle of the range as a goal. The change in policy to have reserves in excess of 10% was a function of changes at the bond rating agencies. But in order to maintain AAA rating, Norwalk does not have to maintain a reserve in excess of 10%. Yet we do, suggesting our property taxes are too high. The current reserve amount of “about” $47,000,000 is nearly 14% of the annual operating budget. Rilling says, “we were very, very responsible in holding the line on our Rainy Day Fund.”

That’s one too many “verys” Mr. Mayor. That extra “very” took money out of my pocket. And I’d like it back now. With 14% held in reserves, not only would you not need to send out a supplemental tax bill, you should be sending out tax credits!

Norwalk is engaged in a Byzantine dance involving rainy day funds, bond ratings and lucrative city infrastructure contracts. While the AAA rating makes floating bonds less costly, it’s important to keep your eye on who gets the contracts to make infrastructure improvements to schools, roads and sewer systems.

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NancyOnNorwwalk.com was conceived as the place to go for Norwalk residents to get the real, unvarnished story about what is going on in and around their city. NancyOnNorwalk does not intend to be a print newspaper online; rather, it exists to pull the curtain back and shine a spotlight on how Norwalk is run and what is happening regarding issues that have an impact on taxpayers’ pocketbooks and safety. As an independent site, NancyOnNorwalk’s first and only allegiance is to the reader.

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Nancy came to Norwalk in September 2010 and, after reporting on Norwalk for two years for another company, resigned to begin Nancy On Norwalk so she engage in journalism the way it was meant to be done. She is married to career journalist Mark Chapman, has a son, Eric (the artist and web designer who built this website), and two cats – a middle-aged lady and a young hottie who are learning how to peacefully co-exist.