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Norwalk Council approves budget cap, after two object to $6 million drawdown

Norwalk Mayor Harry Rilling opines on Rainy Day Fund usage, Tuesday in City Hall.

Updated, 8:23 a.m.: Copy edits, revised headline

NORWALK, Conn. — Norwalk Common Council members on Tuesday set a budget cap of $367.6 million, sending their plan to draw down $6 million in “Rainy Day Funds” Norwalk’s tax Board.

One Council member voted against the budget, while others defended the use of the fund balance. One citizen took the time to voice opposition – unaffiliated Mayoral candidate Lisa Brinton questioned the motives of using Rainy Day money in this, an election year, and Mayor Harry Rilling in response pointed out that no Rainy Day Funds were used ahead of the last municipal election.

Rilling presented historical information, showing that a fund balance draw down has been factored into Norwalk’s budget for seven of the last eight years. Brinton also presented data, including the meteoric rise of the percentage of Norwalk Public Schools’ students who are eligible for free or reduced lunch prices.

The $367,624,642 budget cap represents $351,020,744 in expenditures from local tax dollars and $16,603,968 from estimated intergovernmental grants. The $6 million fund balance drawdown is planned to fund $2.3 million of Board of Education one-time expenses and $3.7 million of City-side expenditures. This represents a 4.2 percent increase in the Norwalk Public Schools budget.

Brinton said she was inspired to attend by NancyOnNorwalk’s Tuesday story, reporting on poor attendance at a operating budget public hearing and quoting Majority Leader John Kydes (D-District C) as saying it was “a fiscal director’s dream: $6 million in the Rainy Day Fund and nobody here.”

“Less and less of our income tax dollars are getting returned to our city each year from Hartford and that trend is set to continue. If teacher pensions come back to the municipalities, I fear we’re going to be seeing even more for sale signs in town,” Brinton said, commenting that she was “waiving the yellow caution flag” over “fuzzy math.”

“We have a 3.3 percent increase in the city budget but somehow we’re drawing down $6 million or 10 percent of the Rainy Day fund? How is that if, when recently Mr. Mayor you stated that the grand list grew by 16 percent? It just doesn’t add up,” she said.

“I know it is an election year, so perhaps that’s why we are choosing to use the Rainy Day fund,” Brinton said, offering this look of Rilling’s time in office:

  • The student population has grown by 500 children
  • The free and reduced lunch rate has grown from 47 percent to 57 percent

In 2004-05 the free and reduced lunch rate was 23 percent, she said.

“With these trends and a questionable property revaluation, the need to use the Rainy Day fund for operating expenses, and the potential policies that are coming down the pike out of Hartford, I ask you, ‘Are these budget and land use policy practices sustainable? Are they integrated?’ Think about it,” she concluded.

 

Council discussion

The goal is to keep tax rates as low as possible while still maintaining services, Finance Committee Chairman Greg Burnett (D-At Large) said, observing that most Norwalkers will see lower tax bills under the proposed budget.

“I have realized that the majority of the public basically doesn’t understand the budget process,” Kydes said, explaining that with the state’s minimum budget requirement, the City cannot cut the total funding for the Board of Education.

“Undoubtedly, (Norwalk has had) the largest Board of Education increase in the state for the third year in a row. which I am proud to be a part of,” Kydes said.  He went on to issue what he called a “personal” message to the Board: “This may not be an option next year so please spend the money that you are getting this year wisely.”

The BoE has “made great progress and I am proud to be able to support them in their efforts going forward. I am also hopeful that this agreement is a model of cooperation going forward,” Council President Tom Livingston (D-District E) said.

The Common Council will attend the annual BoE retreat this summer, for the first time, to discuss the 2020-21 operating budget, Livingston said.

“Sometimes we just disagree about approaches about fund balance,” Council member Doug Hempstead (R-District D) said, explaining that he’s advocated using the fund balance before but that was during the height of the 2008 recession, “the right time to use an emergency fund.”

“It is called out a one-time expenditure for the Board of Education but we all know, the way the budget works, the state of Connecticut law works, that that money once given to them becomes their baseline for next year’s ask,” Hempstead said.

Norwalk Public Schools Chief Financial Officer Thomas Hamilton has repeatedly said that the NPS budget will go up $3.2 million next year, regardless.

Fund balance money should be used to pave roads, build sidewalks or deal with new school construction cost overruns, Hempstead said.

“The budget process has been calm for the last few years because we’ve had enough funding to go over that,” Hempstead said. “My problem is at some point the lines intersect, where you’re having falling revenues and falling fund balance, and rising tax rates and rising costs to the City of Norwalk and it won’t be the ability to draw down that fund balance.”

Hempstead voted no. Darlene Young (D-District B) and John Igneri (D-District E) were absent.

 

Rilling fires back

“It’s unfortunate sometimes when people would ascribe evil intentions or ill-intentions to certain things,” Rilling said. “During an election year, in 2017, there was a zero drawdown on our fund balance. That was an election year and the fund balance represented 12.5 percent of our operating budget.”

The Council in February 2017 planned a $3 million drawdown from the fund balance; the Board of Estimate and Taxation nixed that as the state legislature struggled well into the fall to approve a budget.

Rilling on Tuesday offered these statistics:

  • In 2012-13, $1 million was budgeted to be drawn from the fund balance, when the fund balance was 9.5 percent of operating budget
  • In 2013-14, $1.7 million was budgeted to be drawn from the fund balance, when the fund balance was 9.4 percent of operating budget
  • In 2014-15, $1 million was budgeted to be drawn from the fund balance, when the fund balance was 10 percent of operating budget
  • In 2015-16, $1 million was budgeted to be drawn from the fund balance, when the fund balance was 9.3 percent of operating budget
  • In 2016-17, $2 million was budgeted to be drawn from the fund balance, when the fund balance was 10.9 percent of operating budget
  • In 2017-18, nothing was budgeted to be drawn from the fund balance, out of concerns for state funding instability
  • In 2018-19, $2.95 million was budgeted to be drawn from the fund balance, when the fund balance was 11.8 percent of operating budget
  • In 2019-20, $6 million was budgeted to be drawn from the fund balance, when the fund balance was 12.7 percent of operating budget

 

In spite of the planned drawdowns, each year the fund balance grew by the following amounts, he said:

  • 2012-13: $2.8 million
  • 2013-14: $4 million
  • 2014-15: $7.3 million
  • 2015-16: $6.3 million
  • 2016-17: $4.5 million
  • 2017-18: $5.6 million

 

Hamilton has said he expects the fund balance to grow this year, as well.

Norwalk’s department heads are “very judicial in their spending,” Rilling said, adding that he meets monthly with Norwalk Superintendent of Schools Steven Adamowski to discuss issues and the pair are talking about combining some administrative functions to reduce costs, perhaps in IT (Information Technology) and Finance.

“We are doing a lot … and I believe this budget is a fair budget,” Rilling said. “During a reval year, it is very difficult to look at some of the valuations that are coming out and explain to people how in 2013, your property values went down based on the recession, and now in 2018 those property valuations are going up in some cases 20 and 30 percent.”

“I have always said, the fund balance, the money in our fund balance, belongs to the taxpayers,” Rilling said. “When we can, take money out of the fund balance in order to give some tax relief. Over 90 percent of our budget is paid for by the taxpayers so when we can give them some sort of tax relief, I applaud that.”

8 comments

Sue Haynie February 27, 2019 at 6:15 am

Lisa Brinton makes excellent points.

Rilling says: “I have always said, the fund balance, the money in our fund balance, belongs to the taxpayers,” Yes, it does Mayor Rilling. And the reason why the fund balance increased every year in spite of draw downs is because Norwalk overtaxed it taxpayers!

Fortunately–or not depending on how one looks at it–property values in my area of town decreased in the recent reval, in part because neighbors complained in mass.

My lower property values hopefully will mean lower property taxes(?)–that’s the good news.

The bad news, lower property values also mean that, 10 years after the recession, my house is worth less than it was 4 years ago.

Norwalk’s property taxes are onerous and a dead weight on homeowners.

Lisa Brinton February 27, 2019 at 7:41 am

Sadly, the mayor missed my main point about the fuzzy math, but funny that he came so prepared to defend his Rainy Day draw down 🤭 Supposedly, with the development and revaluation – the grandlist grew 16%, but we’re still drawing on the Rainy Day fund (election year or not)? Why? Our land use revenues are still unable to keep pace with the BOE. The Free and Reduced lunch trend – 10% growth on his watch and not quite tripling since 2004-05, warrants concern. Add if Hartford transfers the teacher pensions to the municipalities,homeowners will start seeing 5% plus tax increases each year. So, just exactly why are we giving those Innovation District tax credits again?

Kevin Kane February 27, 2019 at 9:37 am

Some interesting information and good for Lisa.

John K is 110% correct: “I have realized that the majority of the public basically doesn’t understand the budget process,” Kydes said. It would be wise for anyone at town hall to host a webinar (no, not a physical meeting at 9:30 AM on a Wednesday when the “majority of the public” is working to survive) to describe the process. I was an accounting major and the hardest course was the 1 credit Government Accounting class….people bombed it. It. Made. Zero. Sense. And still makes zero sense.

And this Daisy Cutter of a bomb: “Kydes said, explaining that with the state’s minimum budget requirement, the City cannot cut the total funding for the Board of Education”. Go back and read that again. We are on auto pilot folks. No cuts. Go back and read that. Who knew? The budget can’t be cut. Only on Planet Connecticut….

I think the main theme of this issue is that the town officials continue to live for the moment or next election. Not for the future of 1,2,4 years out. What jumped out at me is that Harry banters about the draw down hovering around an average of $1.25m…goes to zero 1 year…but then it hits $2 million…then BOOM….$2.95m..then BOOM… $6m. Call me crazy but if the trend is 1…then a blip of zero…then triples to $3m…then DOUBLES to $6m, I am raising my hand and asking serious questions. Anything, on a unit basis for a correlating amount of time, whether it goes from beers drank, yoga classes attended, to bowls of Wheaties eaten …goes from 1 to 1 to 1 to 0 then 3 then 6 – something is seriously out of line and needs to be looked at.
Also, call me crazy but the news out of Hartford is NOT good for individuals, towns nor the state. I think that we are in for a serious, serious, rude awakening for a significant rise in expenses, taxes, etc. Norwalk needs start planning beyond the tip of their collective noses. Thanks for the reporting Nancy, Kevin

Non Partisan February 27, 2019 at 10:16 am

1- although the city per claims they use zero based budgeting the fund balance increases every year. This indicated the budgets are overly conservative and the city collects more in taxes than they realistically need.

2- the overal budget marches upward and onward with few checks and balances. The school district cuts sports, enrichment programs and historically over uses study hall instead of teaching. All this is to be able to fund increased ELL programs for our sanctuary city policies.

3- zoning is enforced on a per complaint basis and not pro actively. The added FTE for enforcement has never been fully implemented.

MarjorieM February 27, 2019 at 10:10 pm

Lisa and Sue, there are two ways to count free and reduced lunch percentages. (1), by the forms filled out by parents – iffy at best, since no one checks if they are accurate; (2) State lists kept at the State Department, by city, which are much more accurate. Which one are you using to determine your percentages?

Lisa Brinton February 28, 2019 at 7:16 am

Marjorie, The free lunch data was taken from the state website http://edsight.ct.gov. where all school district data can be accessed. However, 2016 is the last year of data recorded and at the moment FRL stood at 51.5%. The current 57% number comes from central office, but seems consistent with other reports regarding the spike in student enrollment and ELL students over the past couple of years. Hope that helps.

Al Bore March 1, 2019 at 11:03 am

And he will get reelected so who cares other than the home owning taxpayer of Norwalk which are fewer and fewer.

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