Updated, 6 p.m. Feb. 22: John Kydes’ comment removed. Updated, 5:24 p.m.: Information from Mike Barbis.
NORWALK, Conn. – The Norwalk Board of Education’s budget request is not – at this point – drawing comments of support from Common Council members.
Rather, the mood at Thursday’s Finance Committee meeting, as pressure already mounts from the Board of Education, was skeptical.
“It seems to me to be an unrealistic ask,” Council President John Kydes (D-District C) said.
The 5.5 percent mill rate increase it would hypothetically take to fully fund the $11 million increase requested by the Board would be “totally out of line with what we have been doing the last three years,” Finance Committee Chairman Greg Burnett said, attempting to confirm an explanation from Finance Director Bob Barron.
“It’s totally out of line but like I said on Tuesday, I don’t want to presume any one – the chief of police brings forth a plan, and I tell you, these department heads really develop their budgets and asks every year,” Barron replied. “But once it’s turned over, in the aggregate, we need to make recommendations. And say, ‘this is the level that we can afford.’”
The public-side of the operating budget process has just begun, with the Council beginning to consider Barron’s unusual recommended budget – unusual in that Barron factored in a “zero” increase for the Board of Education – on the way to setting a budget cap by Feb. 27.
The Board of Estimate and Taxation will then work on the actual budget, returning to the Council to ask for a higher cap if it feels necessary, by April 2.
“The Board of Education’s recommended FY 2018-19 budget is a base recommendation equal to the current year appropriation. I recommend that the Common Council fund as much of the Board of Education’s request as it feels the taxpayers of the city can afford by increasing its cap over the recommended base budget,” Barron wrote to the Council, explaining his “zero” recommendation for education funding.
Barron’s recommendation carries a hypothetical 1.9 percent mill rate increase. That’s “rock bottom” on the city-side of the budget, Barron said Thursday, then explaining that “city-side” actually includes about $24 million worth of BoE expenses: the debt service on new-school construction costs as well as liability insurance for the Board and worker’s compensation for Norwalk Public Schools employees.
“I would encourage you to begin with that (budget) base and not assume anymore is coming out of the city-side. I personally don’t find any more room,” Barron said.
“We gave up everything to get to my recommendation,” Barron said, explaining that he’d cut $1.4 million from city department requests, included $2 million from the Rainy Day Fund, $2.6 million from the pension fund and $3 million from the insurance fund in his budget request.
That $3 million will wipe out the insurance fund surplus, Barron said, pointing out that it’s not a well that Norwalk can draw from again.
Barron’s letter to the Council explains the pension fund money:
“Pension Contribution decrease of $2,619,976 or -19.2% which includes Police, Fire, and City pension plans along with 401A matches for newer employees not enrolled in the defined benefit pension plan and small administrative costs.
“The city engaged its actuary to complete an experience study on its pensions which pointed to changes that notably lowered the liabilities and related ADEC calculation. Specifically, the pension funds’ investment returns were significantly higher than the assumed rate and there were two years of changes in the mortality improvement scales that both moved in the direction of lowering liabilities. In addition, the plan experienced gains relative to the current salary scale and retirement rate assumptions.”
Barron also touched upon the comments made by some that the city should use its Rainy Day Fund to help fund the BoE budget.
“What do we do the next year when we don’t have the excess?” Barron asked, commenting that he is “really afraid” of the “stair step.”
The state has a minimum budget requirement; whatever the Board of Education gets this year for funding the city is obligated to pay the following year, as a base-line budget.
“At some point when you have exhausted all the one-time revenues, you have to pay for them. So I think that’s another argument for making next year as light as you can,” Barron said.
The Board of Education’s funding over the last decade averages out to a $4 million increase a year, Barron said.
The 2017-18 budget increase was double that at $7.9 million, and, “I think with that $7.9 million they are able to accomplish a great deal and I am sure with the additional 11 they’ll be able to accomplish a great deal more,” Barron said. “But the charge for the Council is, ‘Hey, I’ve got to set a cap for the taxpayers to what I think the taxpayers can afford.’”
That increase included 57 new staff positions, he said.
Board of Education Chairman Mike Barbis on Monday said that the increase included 43 new staff position, not 57. His email:
“Nowhere else in Barron’s summary does he address City staffing, so it is unclear why he included this information in an 11 page summary of the entire budget. Moreover, this schedule represents year-over-year increases in BOE staffing on payroll as of 1/22/2018. It does not represent budgeted staffing, but merely represents staffing on-board as of a 1-22-2018 (i.e. – current fiscal year) compared to FY 2016-17. It doesn’t represent proposed staffing changes for FY 2018-19, and indeed has nothing to do with the FY 2018-19 budget. It is rather curious why it would even be included in a summary document for the FY 2018-19 budget. Since this schedule is a capture of staff on payroll as of a point in time, it does not take into account budgeted vacancies that may have existed last year, but which have subsequently been filled. Our analysis from last year indicates that the FY 2017-18 budget included a total FT head count increase of 43 positions, not the 57 positions cited in Mr. Barron’s report.”
The Board’s 2018-19 request includes $2.1 million to eliminate study halls at Norwalk High School and more than $1 million to increase the school day at six elementary schools. The $11 million figure cited by Barron includes a request for $1.2 million to continue the Special Education transition fund for a third year.
Board members cite their strategic operating plan as the foundation of their requested increases.
“We have seen the success though when we are spending the dollars in investing in the strategic operating plan,” Board member Erik Anderson said on Jan. 16.
“I am a conservative Republican but I don’t oppose spending money if I think I am going to get something for it,” Board member Mike Lyons said on Jan. 16. “… We have already seen results in closing the achievement gap from initial steps. I think this budget is going to continue some very significant motion forward for our school system.”
“Last year the Mayor, City Council, Planning Commission and Board of Estimate and Taxation all supported funding most of the Board of Education’s operating and capital budgets, making it the first year in my children’s educational career that we didn’t have painful negotiations about cuts to the schools,” Board member Barbara Meyer Mitchell wrote on Facebook. “I believe the goals laid out in this budget are necessary for Norwalk to catch up to communities around us and to be in integrity regarding how we allocate funds from our Priority grant.”
Barron on Thursday said that a reasonable person could say the Board needs the funding but a different reasonable person could say that Board got 57 new positions last year.
“So maybe we don’t do it all at once,” Barron said. “Maybe we do it over time but maybe not all next year because we simply don’t feel comfortable with passing on a tax hike that high to the taxpayer. I think that’s a reasonable approach, too, but that’s your decision.”
The city has already invested an unprecedented amount of money in committing to build two new schools and renovate two schools, Barron said.
It’s double what has been the capital plan and, “It astonished me,” Barron said. “…In 16-17 our debt service payment was $26 million. At year five it goes to $47 million. That’s $21 million more for a single line item in the budget in just five years. You divide 20 by five, that’s $4 million more a year.”
The Board of Education has “already come to us and said we are coming back next year with a bigger request and going into a reval year,” Kydes said. “I mean, it seems like we are going to dig a hole where we can’t get out.”
“It’s never too late to recognize, to stop digging a hole,” Council member Faye Bowman (D-District B) said, suggesting that maybe the schools don’t get built after all.
The Council has the authority over the capital budget, Barron said.
Bowman and Council member Travis Simms (D-District B) have opposed the construction of a new school at the Nathaniel Ely property in South Norwalk.
It isn’t just building new buildings, it’s paying the staff in the buildings and heating them, Bowman said.
Hempstead pointed out that there are portable classrooms, and the staff members from those would be spread out into the school system.
“I’d rather have them in portables,” Simms said.
Regarding the financial impact, Hempstead said, “I agree but it’s the crap … our representation that we have in Norwalk, for lack of a better word, because upstate, we are still getting about … half million extra (in education funding).”
State reimbursements for new school construction are much lower than what Bridgeport would receive despite Norwalk’s high percentage of students on free or reduced lunch, Hempstead said.
Pleas to fully fund the BoE request are being organized on Facebook, where one parent said it appears that the Council members do not want to fully fund the BoE budget.
Asked after the meeting if Council members are not inclined to fully fund the BoE budget, Hempstead said, “That sounds like a reasonable statement. But I’m only one vote.”
“We are still discussing it. So no one said, ‘We are not,’ but we are discussing it, we are doing our due diligence,” Burnett said. “Members of the Committee are voicing their opinion which is what they are supposed to do, but we are doing our due diligence. That’s where we are at. We just need people to be patient as we work through this process.”