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Rilling stands by Norwalk’s ‘caution’ regarding Rainy Day Fund

Norwalk Mayor Harry Rilling. (File photo)

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.”

15 comments

Bruce Kimmel March 28, 2018 at 9:02 am

The dilemma we face as a city when it comes to budgeting in general, and funding our schools in particular, is a direct result of the gross inequities of the state’s Education Cost Sharing formula, which severely shortchanges Norwalk. Each year we are backed into a corner and not able to provide our schools enough money to make up for the shortfall. Over time, our schools and our students have not received the education they truly deserve. We are now in the process of rectifying the situation with local funds.

The world of education is moving at a rapid pace. It is becoming increasingly expensive to fund various federal and state education mandates. But we really have no choice.

The Mayor raises good points regarding the rainy day fund; we indeed need to be careful and plan long term — if only to ensure the fund remains at acceptable levels. But perhaps there are other parts of the budget that can be examined and modified.The BET has performed a number of budgetary miracles over the years when it comes to funding; it’s come up with a variety of creative ways to find money, especially for our schools. Perhaps that will happen once again. My fingers are crossed.

Piberman March 28, 2018 at 9:50 am

The larger issue is why Mayor Rilling doesn’t implement cost savings in the operation of City Hall providing city services. That’s the essence of good management – offering better services at lower cost. Sadly we see City administrators spending more each year for the same services with everyone concerned getting higher salaries. The end result is higher taxes and lower property values. In CT’s stagnant economy there’s no shortage of top talent available. Why not seek it out for our City. That would be a real positive Legacy for our City.

Bryan Meek March 28, 2018 at 11:05 am

The independent reporter still fails to mention that just last fall the Mayor’s team said it would be OK to draw down $5.7 million to pay for proposed grant cuts by the Governor. Today, he can only spare a fraction of that for education that he campaigned on supporting. What happened?

The draw down doesn’t have to happen all at once, but can be done measured over a period of years so that Norwalk’s school funding can catch up with surrounding communities, all while still maintaining AAA rating. Maybe the Mayor doesn’t know that because he is being led around by people with a vendetta against the school system.

I’ll bet my MBA and CPA license and 20 years experience working on corporate financial reporting and budgeting systems on these facts. The Mayor is playing politics with words and with our city’s and children’s futures. Pretty twisted.

Rick March 28, 2018 at 12:06 pm

Thank Mr Mayor for letting us know whats going on with the rainy day fund.

Some of us are now more concerned about the mall, where you ” expect no change to The SoNo Collection” another issues has come up since your latest comments.

The 700 employees that work in Chicago for GGP somewhat more in sync with the pending sale are giving somewhat of another picture.

http://www.chicagotribune.com/business/ct-biz-brookfield-buying-ggp-20180327-story.html

Please keep us informed here on NON , we are here to support you and the city on very serious development .

Thank you in advance for sharing your concern but most of our news comes from this site on many issues within the city , the mall should not be an exclusive in print where in other medias GGP has paid to distort the facts in the past. Some GGP sponsored ads have shown this.

Bob Welsh March 28, 2018 at 3:53 pm

Bryan, your view that the RDF was used to “bail out the governor” is known to me only because Nancy has already devoted ample “ink” to it.

Drewt March 28, 2018 at 5:59 pm

{…} We have more then enough money on the fund! Plenty to the tunes of Millions! Why do our children in Norwalk deserve to be shortchanged?! Why do have to have any cuts at all? We have worked so hard to make NPS so much better then it was! So why stop the fantastic progress we have made?! Bryan is right !! If it was OK to bail out Hartford when Malloy threatened with cuts, is more then OK to use a few
More dollars to FULLY FUND OUR SCHOOLS NOW!!
Edited to remove references to violence, felt by the editorial staff to be inappropriate and perplexing given national events. The comments policy states that offensive or inappropriate may be deleted or subjected to distempering. https://www.nancyonnorwalk.com/comment-guidelines/

Another Opinion March 28, 2018 at 7:51 pm

While noble in cause (to fully fund the school budget), I believe the mayor has no choice here and is making a prudent decision. A one time draw down in the RDF is a short-term fix to a structural problem and would only set the baseline higher for subsequent years school budgets. This would likely entail depleting the RDF further or materially increasing mill rates in future years – spend what taxpayers can afford and focus on growing the grandlist first. . . somewhat frustrating with all the new developments, revenue are not higher/taxes lower.

Tysen Canevari March 28, 2018 at 11:20 pm

Perhaps the city should take a look at the overpaid people that make up the school system in Norwalk. The number one guy in Norwalk is the superintendent himself at $254000 a year. The mayor runs a whole city and only makes $115000. A majority of the top 50 wage earners who are well over $150000 a year are teachers or administrators in the Norwalk school system. Athletic directors making $173000 a year! Dr. Moore at West Rocks make $180000 a year. She runs West Rocks but the Mayor runs the city and makes considerably less. Instead of begging the city to tap the rainy day fund ask them to re evaluate the pay structure for the highly overpaid personnel. Bust up the joke of a union they have and make some business savvy decisions.

U.S. Blues March 28, 2018 at 11:36 pm

@mitch adis… I was thinking the same thing. “What, we don’t have property insurance on our buildings?”
Now I’m thinking what kinda of crap is rilling spewing from his mouth? Is it to just say something to justify his denial of this request?
Or was he caught off guard and said the first nonsensical gibberish to sound like he knew what he was talking about.

SALT-y tears March 29, 2018 at 7:56 pm

I wouldn’t bet my tax refund on the mayor outsmarting Meek in a game of checkers, let alone “how much is in the mayor’s secret slush fund, and how much taxpayer $$$ will he cough up for the schools?” Meek is a CPA with an MBA. The mayor was a beat cop who now picks land use commissioners out of a hat—unless he owes someone a favor—cronyism economics. My money is on Meek—whatever I have left that isn’t sitting in Harry’s secret stash, that is.

Niz Gjuraj March 31, 2018 at 1:18 am

lots of indirect/ direct insults in these comments…. no no no people, look sea level is rising and we e a coast line city with a river that runs through it. tragedy happens, so lets underestimate the ‘rain day fund’ yes i see all the figures and counters and in all honesty it is beyond me, cause my SPED kids cant get a $300 MATH curriculum he needs to learn math… and I still respect the that monies reserves for this is for this NOT that. Im about to do a go fund me for the math curriculum since NPS and NHS won’t do it.

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