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Finance Committee recommends authorizing $70.2 million in new bonds; tax appeals reduce ‘grand list’ revenues

A local meeting
The Finance and Claims Committee on Monday, June 17.

The Finance and Claims Committee of the Common Council has unanimously recommended allowing the City to authorize up to $70.2 million in bonds to support the capital projects the Common Council approved for the upcoming year. The full council will vote on the matter next Tuesday, June 25. 

Jared Schmitt, the city’s new chief financial officer, noted that of the $70,217,280 million, $23,350,000 million are bonds that are being authorized by the Water Pollution Control Authority, and an additional $1.5 million are bonds from the Parking Authority.

“What that means is that for the City and the Board of Education, the total amount would be $45,367,280,” he said. 

While the authorization would set a ceiling on new bond debt, Norwalk might not need to issue the full amount, Schmitt noted. Before bonds are issued, he said, his team will “reach out to all department heads again and get a better sense of what they think they’re going to need in cash for any of these projects that are in the FY25 capital plan or some previously authorized projects.” 

Council member Greg Burnett, who chairs the committee, said he was glad they were reaching  out again to department heads before issuing the bonds, in case the amount needed is lower. 

“The one question that constantly comes up each year as we look at bonding for capital projects is that whole idea of reaching or approaching that threshold that could potentially impact our AAA bond rating,” Burnett said, adding that he wanted to know the impact on the bond rating this approval might have.

Schmitt said that while the “stock answer is nobody knows,” he pointed to analysis from the municipal financial advisor that examined what the potential debt limit for the City might be. 

“What he has determined is that the limit of our debt is about $650 million,” he said. “With this amount, we would still be pretty well below that. We are still looking at years past, where I think we’re going to need to revisit all of those [previous] authorizations that are in the five-year capital plan, as we do every year, and either reallocate those to years further out into the future, maybe see if there are elements of the capital plan that could be removed. If there are other things that have been authorized in the past that could be removed, that are old, aren’t going to happen. So there are ways that we can mitigate the impact of it.” 

Council member Johan Lopez asked if the advisor could provide any suggestions on how to “manage the overall increase in the debt,” but Schmitt noted that the advisor’s role is to give opinions on what the limits are.

“In the end, it’s up to us to determine what our needs are, what needs to get done, when they need to get done, and try to manage it that way,” he said. “It’s our job to figure those things out.”

Appeals reduce valuations, and tax revenue, of “grand list” properties

For the 2024-2025 fiscal year, the City projected the total value of Norwalk’s “grand list” of properties at just shy of $18 billion. That represented an increase of $3 billion from the previous year, due primarily to a City-wide revaluation of all properties. The revaluation showed a shift from commercial properties to residential, with more than 70% of the grand list made up of residential property values.

After the revaluation was done, residents and business owners had a chance to appeal their new property values to the Board of Assessment Appeals. Schmitt said 747 appeals were submitted. Of those, 99 were denied, but those owners do have the potential to go forward and appeal further in court. 

Schmitt said the impact of the rest of the appeals is a decrease in the overall grand list of “about $34.5 million in assessed value.” 

“That equates to somewhere between $800,000, $850,000 in tax value,” he said. 

Burnett questioned what the “impact of that dollar amount is” on the City’s budget for this year. 

“Ultimately, it will not have a negative impact on the budget, because we did anticipate that and we always do anticipate that there’s going to be some drop-off related to appeals, so that’s accounted for in the budget,” he said.

Comments

4 responses to “Finance Committee recommends authorizing $70.2 million in new bonds; tax appeals reduce ‘grand list’ revenues”

  1. Bryan Meek

    We were told the ceiling was 500 million just last year. What happened that it increased 30% in one year?

    1. Ana Tabachneck

      Here’s the BET meeting where this was explained: https://youtu.be/FAQup_6Rwys?si=UOmqm-3VbRbfr3sS

  2. John O’Neill

    Three Things:
    1) I miss Henry Dachowitz — I trusted him. Not sure I trust someone who let spenders know the debt can magically go from $ 500 to $ 650 Million overnight.
    Something doesn’t add up and needs to be addressed before spenders do their thing
    2) If Grand Listers want to find additional cash they should look towards homes that were Undervalued by the City. If you’d like to PM me, I’ll gladly provide them
    with a list of at least 50 homes in wealthy enclaves that would help the cause. ALL Undervalued by large amounts. 20%-50% !!!
    3) The stock answer of “nobody knows”? So….I guess we’ll find out when we go over the debt cliff? Not sure I feel comfortable with that advice.
    Readers: Do You?

  3. Thomas Belmont

    Lucky those who succeeded in lessening the burden of overtaxation of their homes. 99 un savvy losers bereft of the legal phrases. Winners and losers at the hand of incompetence, ignorance, and plain stupidity. Stupidity got us here; lost business tax revenue, lost manufacturing, insane government projects, misdirected government investments, and general lack of doing things in the interests of the TAXPAYER. The Sovereign now a Subject. You PAY no SAY. Taxation with fake self aggrandizement representation.

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