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No progress made on BoE’s hoped for $1.5 million

From left, Norwalk Board of Education members Erik Anderson, Mike Barbis and Mike Lyons, Norwalk Superintendent of Schools Steven Adamowski on March 8 appeal to Board of Estimate and Taxation members Troy Jellerette and Artie Kassimis for more funding.

NORWALK, Conn. – No one’s revealing the Norwalk Board of Education’s intentions regarding its desire for another $1.5 million in funding for 2018-19.

“I don’t know what they’re doing,” Norwalk Public Schools Chief Financial Officer Thomas Hamilton said Thursday evening in City Hall, when asked about the situation.

Tuesday would be the last opportunity for the Common Council to authorize additional BoE funding by raising its budget cap, Finance Director Bob Barron said in a Thursday email. The Board of Estimate and Taxation (BET) would have had to make a request for that to happen, but on Monday declined to go in that direction given that the Board of Education has refused an offer made by Mayor Harry Rilling.

Rilling had gotten the BET’s approval to make an offer to the Norwalk Superintendent of Schools Steven Adamowski: use the Board of Education’s $550,000 health insurance reserve and the city would drawdown $950,000 from the fund balance, or Rainy Day Fund, to come up with the $1.5 million the Adamowski is seeking. This would fund elements of the Board’s strategic operating plan.

Adamowski has recommended that the BoE cut kindergarten aides and vacant middle school guidance counselor positions to fund the planned improvements, given that the Council’s $5.5 million increase in the Board’s budget is less than the $9 million requested by the Board. The additional $1.5 million would negate some of the recommended cuts.

BET members said Monday that the door was still open for the “deal” but the BoE would have to ask for a special meeting and agree to use the $550,000.

Asked Thursday via email if the BoE was planning to pursue the offer, or if there would be budget cuts to include cutting kindergarten aides, BoE Finance Committee Chairman Bryan Meek said he’d already answered the question.

A follow up email asking for the answer drew no response.

Meek’s only answer came in a Monday email:

“We’re not asking for the city to micromanage our fund balances however tiny they are. What we are asking for is a reasonable allocation of the $51000000 that the mayor is hoarding, of which half should already be allocated for Education without us having to beg for it to cover population increases and the contractual increases that are protected by collective bargaining laws.”

Rilling on Tuesday said that Barbis had spoken to BET Chairman Ed Camacho about arranging the required special meeting. This was before Barbis blasted Finance Director Bob Barron in an email to NancyOnNorwalk, a comment that included the sentence, “He clearly does not know what he is talking about when it comes to education.”

Adamowski on Tuesday evening said he understood Barbis and Camacho had had discussions, but, “I am not sure of the details of them.”

Board Chairman Mike Barbis has not answered emails on the topic.

Two Common Council members on Wednesday offered opinions.

“I think Adamowski was very foolish not accepting more money,” Doug Hempstead (R-District D) said. “That’s me.”

“At the present moment, the offer the mayor made with the superintendent includes them contributing $550,000,” Greg Burnett (D-At Large) said. “That’s the present offer, which we would like them to strongly consider. Nothing to my knowledge has changed from that point.”

Norwalk’s charter says the Council could vote on April 17 to raise the budget cap; Barron called that “technically the last day” but “from a practical standpoint, since an increase to the cap requires affirmative votes from 2/3rds of the Common Council members, it’s commonly thought that an approval requiring a super-majority can only be achieved at a regular meeting and the only remaining regular meeting before the deadline is April 10, 2018.”

Camacho has already “signed the letter” for the recommended 2018-19 operating budget, Burnett said, suggesting that the only route left for the BoE is a special appropriation.

Barron said a special appropriation would also require a two-thirds Council vote and referred NancyOnNorwalk to a charter passage, which mentioned “the first Monday in May” as the deadline for such a move.

22 comments

Just another Norwalk Voter April 6, 2018 at 6:11 am

So if I understand correctly, the BOE has unspent money in this year’s health insurance account that isn’t needed. However the BOE is unwilling to reallocate this unused money from the health insurance and use it to help fund the $1.5 million shortfall in the 2018 budget. Gee, seems like a no brained to take the deal offered by the city to get $950,000.
What’s the issue?

Bryan Meek April 6, 2018 at 6:40 am

$5 million for POKO. $9 million for roadwork for the new Glover Ave apartments. $7 million road work for the $130 million Washington Village rebuild. $2 million for a Mosque. $5 million for 30 parking spaces. $2 million for a theater that can’t even book events. Millions more coming for Firetree and Lord knows how much to accommodate the mall.

$51 million and growing, largest ever fund balance in the history of the state. Over $10 million higher than any other town in the state…..and the Mayor’s team started out with a ZERO percent increase for the schools and now wants us to believe he needs to raise taxes 3.7% because of the schools. Is anyone buying this bull crap anymore?

No, let’s not discuss any of this, let’s talk about less than a half of a percent of this amount that’s sitting in an account for emergencies.

Because the city needs $50 plus million and a 3.7% tax increase in case of emergencies, but the Mayor’s team thinks the single largest department (education at 53%) should have ZERO.

Mike Lyons April 6, 2018 at 7:51 am

The city has demanded that the Board use its entire insurance reserve ($1.1 million), not half of it ($550,000), for regular budget expenses.

Ed Camacho April 6, 2018 at 8:50 am

Both the City and BOE had medical reserves (which are no longer needed, now that everyone is on premium based health insurance plans) The City spent its down over two years – the BOE wants to spend its down over 3 years. BOEs are not allowed to squirrel away money – they are required by State law to return unspent funds at the end of the fiscal year.

Lisa Brinton Thomson April 6, 2018 at 9:47 am

Ed, Surely you know about multi-year budget planning? I’d hardly call $500K squirreled away money, when contrasted against the city’s $50M in the rainy day fund – $10 million more than Stamford? If my math serves me correctly, the BOE is holding .01% of the rainy day fund. With their multi-year planning – the BOE knows next year is going to be a whopper! I think nearly $7M in contractual salary raises before we even turn the lights on. As a man wearing many hats, both as member of the BET and chairman of the political party with a mayor and 14-1 common council majority, focus on growing the grand list, assessing commercial properties accurately and assessing the losses from illegal apartments. While at it, get an Economic Director or Economic Board or anybody who feels responsible for generating revenue in this town. Thanks!

Edward April 6, 2018 at 10:35 am

@Lisa,
Why is the BOE able to hold the city hostage over their budget. They are being asked to use a portion of their surplus money to fund their own programs.
The City has used their surplus, why isn’t accept to have the BOE use theirs. As far as the contractual obligations, keep in mind the Unions across the board all switched saving the BOE millions. Now the BOE cries the can’t afford NEW programs they want to start.
Something smells here.

Drewt April 6, 2018 at 11:03 am

So the BOE is trying to be frugal with their funding g especially what’s coming next year to the tune of $7 Million but the City wants to PUNISH them and the students by NOT FULLY Funding them..Norwalk Political BS at its best! DISGUSTING….But wait MORE APARTMENTS we don’t need!!! AWSOME! NOT!

Donna Smirniotopoulos April 6, 2018 at 11:37 am

I wonder if the BOE could hide that money in another pile under a different name and hope no one notices….just a thought.

To Lisa’s point, while I know Norwalk is a smallish city, it’s surely not so small that the mayor has to go digging at the same well to fill all the necessary appointments. Rilling has complained in the past about the lack of volunteers. Yet he’s seemingly willing to pass over intereted volunteers in order to surround himself with loyalists. I’m troubled by all the double dipping, especially now that the democratic majority on the CC is 14 to 1.

Also, @Nancy, do you know if the CIty has Conflict of Interest disclosure requirements for mayoral appointmentees and other who wear many 🎩🎩🎩? These are pretty standard for even small non-profits.

Bruce Kimmel April 6, 2018 at 12:00 pm

Some points:

1. Several weeks ago, the full BOE, not the superintendent, agreed not to accept the Mayor’s proposed “deal,” because we sincerely believed there was still sufficient time to work with the Mayor and the BET to secure additional funds for the Board — from either the rainy day fund or by making adjustments in the overall budget. We did not know the Mayor’s offer was a take it or leave it last offer. We wanted to continue working together.

2. The deal, as Mike Lyons indicated above, was always: the city would provide the BOE an additional $950,000 from the rainy day fund, the Board would use half of its insurance reserve, $550,000, to fund the 18/19 budget. Greg Burnett’s comments in the story reflect those terms.

3. Early this week, the Board agreed to the Mayor’s initial proposal — $950,000 from the city, and $550,000 from the insurance account. The Board was promptly told that the terms of the deal had changed. The Board was now asked to draw down its entire insurance acccount, a total of $1.1 million.

4. First the Board was told that the deal had not really changed because we had already applied half of the reserve to the budget. We presented the BET with copies of the original BOE budget document, which apparently had not been read carefully by the BET, and which clearly indicated we had not already applied half of the reserves. Next, the Board was told an entirely different story; the one that Ed Camacho repeated above: that the Board is not allowed to “squirrel” money away. What he means by that is the Board cannot keep surpluses.

5. For the record: Insurance reserves have always been considered by the BET to be separate accounts and surpluses were not transferred back to the city’s general fund. Plus, surpluses are determined at the end of the fiscal year, not the beginning of April. The Board may still have to consider some outstanding claims; the Board also must still worry about dental claims, which are not covered by the state insurance program.

Mike Lyons April 6, 2018 at 1:21 pm

The funding we are discussing is an insurance reserve; it is NOT general reserves (like the City’s). We are NOT required to return it to the City at the end of a fiscal year (if we were, why has the City (including Ed) approved retention of it each year for years?).

Look, the City can set whatever budget it likes. All this to-do about offers and deals is {..} getting city’s officials off the hook for failing to keep their campaign promises to support the schools WHILE building up an almost obscene reserve account taken from our taxpayers for no apparent reason. The ‘we need it to protect our AAA’ narrative is nonsense; we had a AAA rating a few years back with a reserve account less than HALF the size of the current reserve (I served six years on the BET and I know all about this). A curious {…} news media might dig into that question – ‘why the biggest reserve by far in the State – what’s it REALLY being built up for?’, but Norwalk’s news media apparently lacks curiosity. At least about the big things.
Edited to remove an instance of ascribing motives without proof, a violation of the comments policy. https://www.nancyonnorwalk.com/comment-guidelines/

Bruce Kimmel April 6, 2018 at 3:27 pm

The school budget aside, I believe another question needs to be asked: How can anyone justify a 3.7% tax increase, when the fund balance is over $50,000,000 — by far the largest in the state????

Bruce Kimmel April 6, 2018 at 3:34 pm

One last point, which I’ve always wondered about: The city always allocates money in the budget, called an unallocated contingency, for surprise emergencies. This year it stands at $1.4 million. Even though education is more than 50% of the overall budget, I do not believe that contingency fund has ever been used for a BOE emergency or shortfall.

Joanne April 6, 2018 at 4:54 pm

After reading all these comments from BOE members, it seems that they are incapable of having a professional adult conversation with anyone. This can’t help them in the budget process.

Mike Lyons April 6, 2018 at 5:26 pm

Correct, Bruce, it has never been so used. Some parts of the budget, it appears, are ‘more equal than others.’

Susan Wallerstein April 6, 2018 at 5:30 pm

Thank you Bruce and Michael for the clearest explanations about the limits on Boards of Education to carryover funding in restricted accounts from one year to the next for a few very specific purposes such as medical insurance reserve. This is governed by state law since Boards of Education are agencies of the state, not the municipalities. Would have included another commenter but for the unfortunate need to use “squirrel” in a pejorative way. Helpful as well to understand that there are still some limited demands on the insurance reserve for things like dental claims. This is not a contingency or a rainy day fund. Any suggestion that the school system might “hide money in a pile under a different name” is not only offensive to highly competent educational leaders, it would most likely prompt state intervention.

Susan Wallerstein April 6, 2018 at 5:46 pm

Humorous history lesson: 30+ years ago when Mike Lyons served on the Common Council, he led the group that opposed my appointment to the BET by then Mayor Bill Collins. Suspect Mike would agree that I ended up being a good BET member & chair and that mutual respect prevails today. Civility and bi-partisanship are possible folks.

Norwalk native April 6, 2018 at 8:43 pm

No more tax increases to teach illegals how to speak English. Enforce the zoning laws that prohibit illegal apartments. Test scores and property values go up. Addition by subtraction.

Debora Goldstein April 7, 2018 at 12:26 am

I was at a Planning Commission meeting relating to the capital budget, and heard Mr. Barron explain the size of the rainy day fund as a function (percentage) of how much bond debt the city is carrying and as a response to the city’s own policy which requires it to maintain this reserve to put us in the median position with other cities in our category to maintain the AAA rating. If I understood him to be correct, then comparing the absolute size of Norwalk’s rainy day fund to other towns is not a useful metric.

It’s as if you decide to create an emergency reserve fund for your household equivalent to 12 months’ worth of mortgage payments. If your outstanding mortgage is $1,000,000, then your emergency reserve is going to be bigger than that of your neighbor who carries a mortgage of $350,000. Suggesting that the homeowner with the larger home is being irresponsible by putting more away is subjective, but I’d be willing to bet that his/her credit position would be different if applying for another line of credit.

I know from my own training on rating agencies that a muni will not necessarily be downgraded for drawing down a reserve fund, even if it against it’s own reserve policy, if it involves a strategic plan and an investment in improvements. It absolutely will if those drawdowns are for ordinary operating expenses. I believe the BOE strategic plan would be a defensible drawdown from the so-called rainy day fund.

Two last words on the “fully funding” of the BOE. By state law, we cannot reduce the BOE budget from year to year, so it is prudent to ensure that the BOE uses the funds it has, including reserves that were previously dedicated to insurance, but are no longer needed.

I cannot stress enough that this City’s needs, and the current macro economic trends require us to move to a more responsible planning/budgeting process than we have now. The list of expenditures by Mr. Meek in his comments is exhibit A in why this is so. If we moved to outcome based budgeting, the priorities set by a real plan–scoped by what the citizenry wants and what it has agreed to pay for these services–would have prioritized the school’s strategic plan against subsidies for specific projects.

Bryan Meek April 7, 2018 at 6:34 am

@Deb. This is just more hogwash by Barron. If you look at page 124 (pdf page 164) of the Annual Financial Report, you will see our debt is only 15% of the current legal limit, down from 20% a few years back.

http://www.norwalkct.org/ArchiveCenter/ViewFile/Item/12871

This whole charade is political payback for some of the BOE members support for Lisa. And Barron has had an axe to grind against the schools for some time.

Starting off with ZERO for the schools and then only funding half the schools growth needs and trying to fool everyone into thinking that requires a 3.7% tax increase is beyond cynical.

It’s sick and twisted.

Bruce Kimmel April 7, 2018 at 7:58 am

The city’s official policy is that the fund balance should remain between 7.5% and 15% of total revenues. The unofficial policy is to be at the median percentage (of revenues) of other AAA cities in the state. But, and this is a big but: It is common knowledge that AAA ratings are not based on that kind of yardstick. It’s much more complicated. Moreover, consider this: We all agree the city is severely shortchanged each year by the state ECS formula. So why have such a strict fund balance policy — when it is entirely unnecessary?

Sue Haynie April 7, 2018 at 10:48 am

Bruce Kimmel, thank you for stating the obvious….. “The school budget aside, I believe another question needs to be asked: How can anyone justify a 3.7% tax increase, when the fund balance is over $50,000,000 — by far the largest in the state????”

Donna Smirniotopoulos April 7, 2018 at 11:38 am

@Sue Haynie, that’s an excellent question, and one that should begin with the economic drivers of development no matter who’s in charge at City Hall. In a few short years, Norwalk has seen enormous growth. All major developments have passed through many layers of approval, from Planning and Zoning Commissoins to the CC Planning Committee. Those that come in through Redevelopment take a shortcut. But the fundamental question—will this development grow the local economy, grow the Grand List, boost the values of residential real estate and reduce or stabilize property taxes—is never asked. We need to start asking this question. Homeowners need to demand that this question is asked. Some commissioners tell us developments provide economic stimulus. But the real impact, one the tax abatement are calculated, remain elusive. If our taxes are going UP, the reason is the local economy is stagnant in spite of all the developments. And that means our land use bodies, our mayor and our common council, and especially our BET are not asking the right questions BEFORE these applications are approved. Just my two cents.

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