Updated, 1:11 p.m.: Comment from Bryan Meek.
NORWALK, Conn. – Mayor Harry Rilling on Tuesday opposed an additional drawdown from the City’s Rainy Day Fund to increase school funding, as parents were encouraged to press for more education funding at Wednesday’s budget hearing.
“God forbid a city building burned down or something of that magnitude where we would have a problem, and if we don’t have a fund balance that we can rely on, it’s drawn down to an unhealthy level, it’s going to create a problem for us,” Rilling said, explaining that “maintaining a healthy fund balance” is not simply a matter of preserving Norwalk’s Triple A bond rating.
The Board of Estimate and Taxation is working to create a 2018-19 operating budget with an appropriations cap that would allow for a 3.7 percent mill rate increase, with the Common Council intending that Norwalk Public Schools would receive $5.5 million more than in 2017-18.
The Board had requested $9.9 million more, and members of the BoE Finance Committee on Tuesday issued an opinion to NancyOnNorwalk, pressing the city for more money and arguing that its operating budget request could be met without harm to taxpayers.
“The BOE has a commitment from the City to allocate an additional $950K for education from the Rainy Day Fund. However, we are still hopeful that additional funding can be allocated for education. Specifically, the City is currently carrying a reserve of $1.4 million in an unallocated contingency fund. We have requested that the City share a portion of that unallocated contingency fund with the school district,” the letter signed by Board members Mike Lyons, Bruce Kimmel, Bryan Meek and Mike Barbis, Board Chairman.
Board member Barbara Meyer-Mitchell on Tuesday evening issued a call to action on the Facebook page she created for Norwalk parents, which currently has 3,402 members.
“I hope you will take the time to prioritize coming to the Board of Estimate and Taxation hearing regarding the Operating Budget taking place in the Concert Hall at 6:30pm. The BET needs to hear from you regarding your needs and aspirations for Norwalk Public Schools,” she wrote.
Norwalk Superintendent of Schools Steven Adamowski said last week that Rilling had offered that the city would withdraw an additional $950,000 from the general fund balance, also called “The Rainy Day Fund,” if the Board withdraws $550,000 from its health insurance fund.
The city has already planned to withdraw $2 million from the fund balance to “provide tax relief” on the 2018-19 operating budget and $1.2 million to fund the third year of Special Education reform efforts.
“If the city would spend $1.4 million of its contingency fund, the Board would contribute $1.1 million from its health insurance reserve, Adamowski said last week, making sure everyone understood that the city’s contingency fund is not the Rainy Day Fund.
“We have been in discussions trying to find a way that we can get closer to their full request and what we feel we can give and still protect the citizens of Norwalk, rather than risking an unsustainable tax increase,” Rilling said Tuesday. “We also, from our consultants and from the state of Connecticut, we have information that we have to be very, very cautious about drawing down our fund balance. Because that is looked upon as a fund that would be there in the event we have any unanticipated situations that we need to draw down on.”
Meek has repeatedly said that the city could use a large amount of money from the Rainy Day Fund to fund anything Norwalk needs, stating, “We can have it all.”
“We have in our Rainy Day Fund $55 million right now,” Meek said last week. “That’s $15 million higher than Stamford, a city 50 percent larger than us with the same triple A credit rating. It’s unconscionable to sit on this money.”
Rilling on Tuesday said, “Any person who knows finance, who knows budgeting, knows how cities operate, would say that is ridiculous and he still continues to say, ‘We can withdraw $15 million down.’ I don’t know where he gets that from but it just shows that he’s not really in touch.”
“While I never suggested a massive draw down at one time, the Internationally recognized credit ratings agencies at Standard & Poors and Fitch have maintained Stamford AAA rating and their fund balance (one factor) sits at $40 million versus ours at $55 million,” Meek wrote Wednesday in an email. “Since the Mayor’s team has always maintained that drawing down on this would hurt our credit ratings, I would say it is he who is out of touch. Other data supports that Norwalk schools are unfunded on a per pupil basis, but the mayor doesn’t seem interested in maintaining his campaign pledges to support our efforts. Instead he seems intent on packing every last square inch of this city with apartments only to scratch his head later when we ask for more funds to keep up with the growth in the school system. Talk about out of touch.”
If Norwalk has a higher fund balance than Stamford it’s because Norwalk has been more responsible, Rilling said.
“A fund balance is something that cities need to have,” Rilling said. “Yes, we have healthy fund balance but that’s because we have been very responsible in our budgeting. We have been very responsible in putting money away so that we have it if we need it. It’s not a wise decision to draw down on the fund balance for an ongoing expenditure. For a one-time expenditure, that’s one thing. We draw down for ongoing expenditures eventually we hit a cliff where there’s no money yet. We can’t sustain drawing down on the fund balance.”
He said, “You can’t compare us with other cities who maybe haven’t done their due diligence in putting away money in the fund balance, that is something that they can rely on if they need it and that gives them a healthy budget situation.”