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Hamilton fires back at ‘wrong, wrong, wrong’ Norwalk CFO statements

Norwalk Public Schools Chief Financial Officer Thomas Hamilton speaks to the Board of Education Finance Committee, Wednesday in City Hall.

NORWALK, Conn. — Normally calm and professional Norwalk Public Schools Chief Financial Officer Thomas Hamilton was animated and emotional Wednesday evening, in defending NPS from “wrong” comments made this week by Norwalk Chief Financial Officer Henry Dachowitz.

“I am very troubled and disturbed by the divisive, needlessly adversarial, and blatantly inaccurate tone and tenor and substance of the comments of the City Finance Director. I believe that he has taken an approach that is essentially devolved into a personal attack on me and on my integrity, and on the members of the Board (of Education) and on the entire Norwalk Public Schools community,” Hamilton said.

Dachowitz, in two separate presentations in public meetings, called the budget request from Hamilton “misleading and confusing.” On Monday, he called it “sneaky and deceptive,” and listed issues ranging from gift cards for teachers to unsafe scaffolding for the Norwalk High School Marching Band.

Hamilton spent 1.5 hours Wednesday evening offering Board of Education Finance Committee members a detailed rebuttal to Dachowitz’ comments, as reported on NancyOnNorwalk, and to Dachowitz’ PowerPoint presentation.

“I understand that the city and the City Finance Director are frequently put in a difficult situation having to try to balance multiple needs and priorities and do so in a way that results in a tax rate that’s acceptable to the Mayor and to the Board of Estimate and Taxation and the Common Council,” said Hamilton, former Norwalk Finance Director. “I understand those are all difficult things. What I take great exception to is the vitriol and personal attacks and the tone and tenor of these comments these last few days.”

BOE Finance Presentation 02122020 (1)

Dachowitz recommended operating budget PowerPoint 20-0210

 

‘The city outperformed its budget’

Norwalk’s fund balance grew more than $12 million in 2018-19, Hamilton said, describing Norwalk’s “very healthy” financial status.

Dachowitz and Mayor Harry Rilling recommend drawing down $8 million for the 2020-21 budget. Rilling noted Monday that the City’s revenues included building permits from SoNo Collection stores; property taxes from the mall have been estimated at $2.5 million for the first seven years but that has yet to be confirmed.

It’s a “reasonable assumption” that the 2018-19 success is reproducible because the grand list has gone up and projections for things like car taxes are often conservative, Hamilton said Wednesday.

The City has a debt service fund that didn’t exist when he left the City to work for NPS in 2015, Hamilton said.

“And the beginning of last year, there was actually almost $11 million in that fund. At the end of last year, there was $3.8 million in that fund,” he explained. “…That is an additional source of budgetary flexibility to the city.”

It was created when the City did a bond refunding and “received what’s referred to as a bond premium,” an upfront cash payment representing the savings achieved through the refunding, he continued.

“I don’t think that that’s information that has been discussed that I’ve heard of, and I’m not sure that many folks on either the Council or the Board of Estimate are aware of that existence of that fund,” Hamilton charged.

 

 

Per pupil expenditures

Dachowitz “perhaps has deliberately misrepresented the Board of Education budget in order to create a narrative that that per-pupil spending is … higher than it really is. And that the Board of Education share of the entire budget is higher than it really is,” Hamilton said.

Dachowitz made a detailed argument that the per pupil spending is really up at $22,000 per pupil, and that Norwalk Public Schools comprises 71 percent of the total operating budget.

“The public schools get grants from the state of Connecticut,” Dachowitz told Board of Estimate and Taxation members Monday. “Now, I know that (Norwalk Superintendent of Schools Steven Adamowski and Hamilton) will say they are mandated in how they calculate the cost to educate each pupil, which is very relevant when you’re comparing our costs to other cities in Connecticut. But if my question is how much is the city of Norwalk spending on its students? It’s fair to add that these dollars because they’re spending them on the students.”

Hamilton on Wednesday said Dachowitz had derived his per pupil expenditure figures “by manipulating numbers in a patently false and inaccurate and completely inappropriate way.”

Dachowitz “has made the determination that on the city-side of the budget, he’s going to calculate a net expenditure. But he doesn’t apply the same treatment to the Board of Education…. If you’re looking at expenditures, it’s not appropriate to look at net expenditures to begin with,” Hamilton charged.

Dachowitz deducted the largest state grant, the more than $10 million Education Cost Sharing revenue, from the City-side of the budget, Hamilton said, asking why it wasn’t deducted from the Board of Education-side.

“That makes no sense. And that’s a deliberate attempt to misrepresent these numbers,” Hamilton asserted.

And Dachowitz added education grants to his NPS equation, including a $6 million School Readiness grant, which “goes to outside preschool providers, it has nothing whatever to do with K-to-eight or K-to-12 education.”

“His calculations of per pupil expenditures are utterly wrong. They are inaccurate, they cannot be relied on,” Hamilton said.

Finance Committee Chairwoman Barbara Meyer-Mitchell asked if Dachowitz had reached out to Hamilton for information as he made the presentation.

“Absolutely not,” Hamilton replied.

She had shared the state per-pupil formula with BET Chairman Ed Camacho, she said.

“I’m very disappointed that they chose not to cooperate with us to determine how this presentation is presented, and that they chose not to use the information that we provided,” she said.

Dachowitz said Monday that he could not use the same calculations to see how much other cities spend per pupil because he was factoring in in-kind services. The point was how much Norwalk spends.

BET member Ed Abrams said it was “basically apples and oranges.”

“Fair enough,” Dachowitz replied, and Mayor Harry Rilling said the debt service being incurred by the City as it works to build schools is also a factor.

“It’s never going to be apples and apples. We’re never going to know what the other cities are doing,” Camacho said.

The point is, the claim that’s been made for the last few years is “spurious,” Dachowitz replied.

NPS has a chart displayed on the third floor of City Hall, comparing Norwalk’s per pupil expenditures with surrounding towns. The comparison has been called unfair and misleading.

 

 

 

About that debt service

Norwalk’s debt service has been “very constant, relatively flat,” Hamilton said. There should be three categories, City budget, Board of Education budget and debt service budget because “these school buildings are owned by the city, they are city assets.”

It was “interesting” that Dachowitz only reviewed five years of capital budget expenditures, Meyer-Mitchell said.

“If you go back further, you’ll see that we deferred school projects in favor of the new police station,” she asserted. “… We deferred, in effect, Cranbury School, which is one of the projects that we’re putting forward.”

“Absolutely,” Hamilton replied. “I think it’s readily apparent to anyone who walks into City Hall or walks into the fire headquarters on Connecticut Avenue or walks into the police station and then walks into any of our school buildings and looks at the disparity in the conditions of those public buildings, that the Board of Education has been shortchanged for years and years and years.”

“To put the debt service in the Board of Education budget really flies in the face of the fact that the debt service is a city decision about the size of the capital budget and how it’s going to be financed,” Hamilton opined.

Plus, there’s the debt service fund. If  the debt service were in the BoE budget and “the city realizes $10 million of bond premium from a refunding, do we get our share of that $10 million? I don’t think that’s what the city has proposed,” he said.

 

 

In-kind services

There’s “some legitimacy” in factoring in in-kind services but the City already does a good job of calculating those and they’re factored into the state formula, Hamilton said.

“When he makes a claim that the Board of Education totally ignores in kind services, he’s wrong. He’s incorrect. He doesn’t know what he’s talking about,” Hamilton continued.

Norwalk reports $16 million of in-kind services and Stamford reports $6 million, so maybe Norwalk does a better job of reporting, Hamilton said. But even if you add them in to the calculation Dachowitz made, the numbers only shift a little and “the 71 percent number reported by Mr. Dachowitz…is simply false.”

Board of Education spending is about 70 percent of the budget in suburbs, while cities are around 60 percent, Adamowski said.

 

 

City has no control?

Hamilton moved onto what he called Dachowitz’ “smorgasbord of complaints. Many are most of which are untrue.”

“It’s true: the Board of Education budget is not subject to line item control by the Common Council or the Board of Estimate. But the Board of Education budget is subject to complete control by you, the elected members of the Board of Education, the people who are directly accountable to the voters of the city of Norwalk,” Hamilton said.

The BET has line item control on the City-side but is appointed, and therefore less accountable, he charged.

“If I were CEO, it would be very troubling to have 60 percent of my budget controlled by a department head who did not have that direct accountability line,” Meyer-Mitchell offered. “So I understand the wish for control in this situation. But as you say, we have the checks and balances in our government in place intentionally. So that the people who are engrossing themselves in hours and hours of meetings to understand what our staff is trying to achieve in our buildings can be accountable for the decisions that are made.”

For every budget goal, she has spent hundreds of hours meeting with stakeholders and teachers, she said.

BoE member Colin Hosten jumped in with, “As they are demonstrating right now, the ability to set the cap is a huge amount of control because of what they think about our priorities, they can eliminate all the priorities by setting a low cap.”

“Mr. Dachowitz seems to assume that if he has not personally conducted a line-by-line analysis of the Board of Education, it must mean that such an analysis is never taken place,” Hamilton said. “He has that wrong. The Norwalk Public Schools regularly scrutinizes our budget throughout the budget process and throughout the year looking for savings and efficiencies and looking to eliminate onetime costs and looking to use our resources as effectively as we can.”

 

The ‘sneaky and disingenuous’ budget estimate

NPS doesn’t disagree that its budget request is $18 million more than its original 2019-20 budget, but it’s “equally important to recognize that the budget that we’re working with in the current year is not the $198.5 million, it’s the $202.2 million,” Hamilton said. “…That is what we’re authorized to spend this year. And if we want to look at what’s new for next year, it’s appropriate to look at the comparison to the revised budget.”

“I’ve been really pondering this, because the city approved the special appropriation (for English Language Learners) based on our presentation of our need. They saw the need. …I’m confused as to why they would think we no longer have that need going forward,” Meyer-Mitchell said.

 

 

Scaffolding and air quality

Hamilton expressed indignation about the suggestion that NPS did not take unsafe scaffolding seriously and that he “cooked up” a $600,000 expense for air quality measures at Brien McMahon High School.

It’s “just a complete misrepresentation of the discussion that he and I had” about BMHS, “a perplexing and difficult issue because there had not neither OSHA nor the outside consultants nor UCONN, who had come in, had identified sort of the smoking gun that was going to be the one thing we needed to do to fix the problem,” he said.

“It’s in fact been a project that has been funded for several for at least a couple of years now, I believe, and we I think we are making good progress. And I’d suggest given the really catastrophic indoor air quality situations that have occurred very nearby – Westport and Stamford have both had to close entire schools for extended periods of time and are spending 10s of millions of dollars on remediation – that I think a $200,000 request is a small price to pay,” he said.

A retired teacher had issues that her physician linked to the Brien McMahon and teachers have complained about “watery eyes, itchy skin, other symptoms that they believe could be related to the building,” he said.

“We’ve been working on this for two years to try and get to the bottom of what’s causing it,” Meyer-Mitchell said.

Dachowitz charged that unsafe scaffolding was only addressed when the City stepped in and paid $45,000 for a rental under the understanding that NPS would have new scaffolding built via the next capital budget.

“The real cost of the rental was @.$5,500.00 the fence surrounding the scaffold was also rented but I do not know what that cost was or if it was ever charged to the city,” MBI (Marching Bears, Inc.) President Stan Remson said Wednesday in an email to NancyOnNorwalk.

Adamowski removed the scaffolding from the City budget because he thought it should be in the operating budget, according to Hamilton.

“There is a long lead time on this particular scaffolding. So if we wait until July won’t be available before marching band season,” Hamilton said, explaining that he’d suggested a lease purchase agreement over five years to make it affordable for the school.

Any expense under $100,000 is suitable for the operating budget, Adamowski offered.  But with the possibility of a new Norwalk High School being built, it makes no sense to put in a permanent installation until the details are worked out.

The issue “has been totally misrepresented in terms of our thinking and decision-making process. And we always make these decisions thoughtfully,” Adamowski opined.

 

‘Uncivil’

“I am more than disappointed,” Hamilton concluded. “I’m really personally offended at the dishonest and deceitful and disrespectful tone and tenor coming from Mr. Dachowitz. I think he has chosen to pursue what is really a scorched earth strategy. And I think it’s out of line. I think it’s inappropriate. And I think it grossly mischaracterizes the Norwalk Public School System.”

Hosten said he also regrets the “uncivil” tone. “I don’t want to speculate about his motives, you know, I don’t know if it’s deliberate or trying to deceive. I don’t know him that well to know that he just simply may not know enough about how the process works.”

He continued, “What I don’t get is this weird us-versus-them approach to budgeting that we do in the City. … You cannot talk about Norwalk increasing in property values and so on without talking about” NPS successes.

“I’m hoping that next year that this doesn’t have to play out in the media, and that conversations will be had before the budget is actually released,” BoE member Sherelle Harris said.

“Maybe we need an education committee,” Meyer-Mitchell offered, reminding everyone that Rilling created a committee on equity and justice for education funding two years ago, but, “That committee met twice and then disbanded.”

“When we argue over something that happened last year that’s been resolved we are distracting from what we need to plan for, for the 406 new students arriving in the … fall,” she said.

Hamilton had said he hated doing this in public but felt a need to respond to Dachowitz’ comments.

“You know, I’m in my 23rd year of service, I believe now, with the serving the citizens of Norwalk,” Hamilton had said. “And I take my integrity and my responsibility very seriously. When the Mayor called last year, the city Finance Director had suddenly left. It was a critical time for the city in terms of budget development. I met with the Mayor and I stepped forward and I took on additional responsibility, attended a whole slew of additional meetings in order to try to help the city through that difficult transition and difficult situation.”

He continued, “I didn’t ask for and didn’t receive any additional compensation for those services. I’ve really committed what is really the majority of my professional life to Norwalk and Norwalk citizens, and I would hope that we can move to a better place going forward, a more respectful place, and a place where we respect each other’s professional opinions and, and work with each other in a collaborative way.”

14 comments

Stuart Wells February 13, 2020 at 7:05 am

When I served on the Board of Estimate and Taxation (12 years ago) members of the public would sometimes argue that the budget of Department X was going up faster than the budget for Department Y, or was a higher percentage of the total city budget than in other towns or cities. This was supposed to prove that the budget for Department X was too high; but this is a logical fallacy, because the same facts equally support the argument that the budget for Department Y is too low.
Such a comparison of rates of change or overall share of the city’s budget can only be the beginning of analysis, not the end. The real question is “Why?” and both sides of the “equation” need to be included in the analysis.

Susan Wallerstein February 13, 2020 at 8:02 am

I was a member of the BET many years ago when Tom Hamilton was originally hired by the city. Following his long and successful career in Norwalk, Stamford and then back to Norwalk, I’ve always found him to be smart, ethical and civil. IMHO based on years of experience as a school administrator and elected official, some aspects of the current situation often happen when a new hire is not familiar with how things work in Connecticut. The rest seems, due unfortunately one person’s professional style and disposition which seems lacking in civility, respect, communication skills, etc. Ugh, sorry Norwalk.

Bobby Lamb February 13, 2020 at 8:34 am

The emperor has no clothes. Hamilton and Adamowski can deny it all day but they have finally been called out. Norwalk hired Adamowski despite his well known reputation of leaving cities in financial crisis because of his outrageous spending. It’s true the schools were underfunded for years and we needed a reset. The investment over the past five years has been huge and worth it but enough is enough. I do not blame the members of the BOE – this lies in the hands of the staff. Thank you Henry for standing up to them.

Non Partisan February 13, 2020 at 8:53 am

Maybe we should focus on why school expenses are spiraling out of control and the ability of our tax base to pay the bill

Lack of zoning enforcement
Sanctuary city policies

Maybe city halls attack on the BOE is a deflection of the real issues

Bridget P February 13, 2020 at 11:44 am

The gig is up and Mr. Dachowitz is exactly the wake-up call NPS needs. The schools budgets and spending per pupil crying calls are breaking the city and devouring tax dollars at a rapid pace. The new CFO looks like the city’s savior. The BOE every year call for massive budget increases is getting old and contributing to more homeowners selling to escape the tax pressures from school spending. You cannot talk about Norwalk increasing in property values without stable spending and modest school budgets. The board is suffering from massive group think believing their budgets are realistic. Spending the city into oblivion needs to stop.

Bryan Meek February 13, 2020 at 11:59 am

Tom Hamilton’s service to this city over the years is unimpeachable. I hope he can look past the Mayor’s team’s obvious subterfuge here.

Sanctuary Harry’s policies to pack every square inch of this city with cheaply built apartments, ignore the explosion of illegal apartments (clearly evident by the 100s of neighborhood streets that a fire truck can’t even get through any more thanks to all the cars parked everywhere), and his total subservience to the Hartford political machine have damaged this city for years to come.

The perpetuity cost of educating 1000 additional students is over $1 billion with absolutely no relief in site from Bob Duff and the state who created these conditions for us.

Instead of tackling the real issues we face, we are presented with slanderous attacks on the people who are actually trying to do something about it.

$10 gift cards is all they have? Recruiting in Detroit? For Pete’s sake the guy himself is from Michigan. Even I am at a loss for words on how illogical that attack is.

John ONeill February 13, 2020 at 12:50 pm

A couple of thoughts: 1) This public give/take should’ve been handled privately first. Maybe it has been discussed before dirty laundry was made public. 2) Everyone seems to stepping around the true problem. – I’ve said it a hundred times and I’ll say it again. Norwalk has not planned and it still not addressing the ELL student issues on funding. 3) Whoever was responsible for Increased budget narrative of only 7% was misleading taxpayers — Whoever was responsible for that line was being disingenuous.4) Regarding forming a committee to deal with miscommunication — Complete BS, we have more committees than the Russian Politburo. Last I checked City Hall is up to date on phone bills — Pick up the freaking phone and COMMUNICATE. Not complicated. 5) I can understand why Tom’s feelings may have been hurt. However, everyone should now grab a beer and move forward. There’s work to be done. 6) Someone right or wrong shaking the bushes is not a bad thing – I still want my Henry Dachowitz T-Shirt 7) This stuff has happened in just about every business environment I’ve been in — 8) Note to Henry: Keep up the fight, but please take a course in diplomacy. I believe the City will pay for it. 8) Note to Tom: You’ve always been a class act. We hope you keep making it happen. 9)Note Board: Get out of La-La land and recognize our ELL crisis is not being handled well. The “tipping” point is closer than we’ve been led to believe. 10) Note to Wilpon Family: Please sell the Mets as soon as possible. 11) Note to Baseball Commissioner: Please make Wilpons sell Mets.

Bryan Meek February 13, 2020 at 2:00 pm

For those who are so excited about Harry’s new hatchet man’s analysis of scones and lattes that cost the city $10k, can you please come forward with the same fervor for analysis of the city’s $13 million contingency for litigation? What exactly are those pending lawsuits and what is the city’s plan to try to save real money? Or do we only care about the teacher breakfast that isn’t even a rounding error on that?

Patrick Cooper February 13, 2020 at 3:54 pm

This Norwalk Budget season is atypically fraught with pressure. As others have stated – the root cause of these pressures is directly related to the mayors policies. Either side of the balance sheet – pick apart the spending or the revenue – but the fact is, we have too much of one and not enough of the other.

NoN: can you report the Grand List value proclaimed after the 2019 revaluation? The number that showed a miraculous 12% growth. The follow-up: has there been any official Grand List “re-statement” given the reported 400+ lawsuits by largely commercial property owners? My thesis? We don’t have the revenue we say we have.

Spending? @Brian Meek – agreed, sanctuary Rilling mixed with zero ordinance enforcement (illegal or at minimum non-compliant housing) has created a spending multiplier without corresponding revenue support. Sorry – all that cash-economy activity only helps the state with sales tax (which is exactly why they encourage it). That our mayor thus far utterly refuses to acknowledge this correlation with his policies and our problems is disingenuous at best. But we know one trait every politician share: it’s never their fault. Bodies go under the bus before any politician publicly provides an act of contrition. Let’s just pray he doesn’t double down.

This is Norwalk (and CT) in a nutshell: normal straightforward processes that are eminently transparent are grotesquely warped and distorted by the games of petty politics. This food fight is a great distraction, and probably good for local media. However, as long as the game is deflection versus honest issue / policy conversations, we’ll never deal with the root causes – and thus – not fix the underlying problems. Denial – that’s where we were last fall pre-election: you were told not to believe your eyes and your ears – and you did.

Scorpion & frog story – it’s in his nature. Until this city collectively decides party politics – and specifically – single party rule – are both ineffective and damaging to our city management, then the dysfunction will only continue, and probably – get worse.

Concerned Taxpayer February 13, 2020 at 5:37 pm

I struggle to understand why the new high school is in the capital budget, all indications suggest it was added by the Mayor. This didn’t seem to be part of the BOE facility plan until late last year when Senator Duff introduced the surprise announcement. The State reimbursement is not confirmed. BOE expense control is a great concept to discuss, however forcing a New School in a capital plan on short notice creates skepticism of the city. It’s on the radar, would it make sense to hold off a year when there’s more transparency.

Ron Morris February 13, 2020 at 9:36 pm

I just wish that Dachowitz was around years ago. Maybe if the Republican Lyons, the Republican Meeks and the want to be Republican Barbis had spent a little less time patting themselves on the back, we could have taken control of the mess earlier. However they were very concerned about saying how great Adamowski was, as he was hired behind closed doors without public input. As Bobby Lamb states Adamowski has a well known reputation of leaving cities in financial crisis because of his outrageous spending.

Bryan Meek February 14, 2020 at 6:31 am

Ron Morris caught us. When we were on the board we weren’t actually working for the results that have been achieved here. No, we were secretly working at the State Department who was posting ads in Central America to migrate here. We were in charge of that. Then we coordinated all the caravans to arrive here. Then we forced Bob Duff to create laws that would prevent the federal government from regulating immigration. Then we forced Harry Rilling to declare Norwalk a sanctuary city. This was all so we could educate 1000 more children that we could not afford to, so that we could bust the school system. You caught us. Genius.

If something seems. . .. February 14, 2020 at 9:06 am

With regard to Tom Hamilton: The man is intelligent, decent and honest. If the City’s CFO has legitimate concerns about the information that the board of ed provides, there are professional and mature ways of expressing and debating them. The sarcastic approach and flippant remarks lead me to question the integrity of the City’s CFO, not the integrity of Tom Hamilton, who has had a long and distinguished record of service to both the City and the board of ed.

With regard to the Norwalk High School project that the City is pushing, I remind everyone that if something seems too good to be true, it probably is. No one knows with any degree of certainty just what the costs will be. (1) No one knows if the state will every actually give the reimbursement to Norwalk. It gives reimbursements in installments, as stages of the project are completed — and the state decides then what expenses it considers to be eligible for reimbursement. (2) No one knows exactly what Norwalk will give up in return for the promised reimbursement. What happens if the affluent suburbs opt out of sending students to NHS? Who fills the seats then? People who have moved to Westport, to Wilton, to Darien, to New Canaan and to other affluent towns have often done so because they want their children in those school systems. How many of them do you think will now send them back to Norwalk?

Mike Lyons February 14, 2020 at 9:33 pm

What a hoot to read Ron Morris, shill for Democrats, complaining about high spending. Every penny of that spending prior to this year was approved by our Democratic Mayor, our Democraic-controlled Council, Democratic-controlled BET and – wait for it – 7-2 Democratic-controlled Board of Education. But Republicans Lyons and Meek are to blame? Hilarious!

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