NORWALK, Conn. – Norwalk’s finances are in relatively good shape, Norwalk Finance Director Thomas Hamilton said last week.
Hamilton said he is confident the city can maintain it’s Triple A bond rating even if the so-called “Rainy Day Fund” is not as high percentage-wise as other Triple A municipalities. The city is likely not to dip as much into the fund during this fiscal year as planned so that should help, he said.
Hamilton was briefing Common Council members on the proposed 2014-15 operating budget. Council members will vote to set a preliminary cap Tuesday evening. They will revisit the issue in April, two weeks after a public hearing scheduled for March 19 in Concert Hall, but would need a 2/3 majority to change whatever cap they set Tuesday, he said.
The tentative $318,480,145 budget cap would mean a median District 4 mill rate of 25.170, or a net increase of $74.08 on the median home value of $257,600. This is skewed by the revaluation, as a greater burden of property taxes are being shifted to Districts 5 and 6, where home values were not hit as hard by the recession.
The median mill rate in Districts 5 and 6 would be about 21.378. In District 5, that translate into a a $468.28 increase on a median home value of $353,360, and, in District 6, a $1,150.82 increase on a median home value of $677, 331.
The rate in Districts 1, 2 and would be 25.111, meaning median-price home tax decreases of $233.05 (1), $777.05 (2) and $611.33 (3). Those districts lost the most property value in the revaluation.
Council members questioned Hamilton on the Triple A bond rating and on the amount being put into the Other Post Employee Benefits (OPEB) fund, used to fund retiree medical care.
Hamilton said the charter calls for the city’s general fund balance – or Rainy Day Fund – to be between 5 and 10 percent of the overall budget. But it also calls for it to be at the median of other Triple A bonded cities.
At this point, the median is 10.4 percent, Hamilton said. Norwalk was projected to be at 8.6 percent at the end of 2013-14, he said. He’s guessing the budget will probably come in at well above that, maybe 9.4 percent, because revenues from building permits and real estate conveyances are coming in higher than expected, he said.
“I am pretty comfortable we are going to be fine with the rating agencies,” he said. “… I’m confident we will end the year with a surplus substantially better than the 8.6 number.”
The budget called for $1.7 million to be spent from the Rainy Day Fund. Hamilton said he now expects that number to be at about $1 million.
Finance Committee Chairman Bruce Kimmel asked why there is no contribution to the OPEB trust fund in the proposed budget. Hamilton said it’s in there but it’s remaining flat at 13.6 percent.
There is $37 million in the OPEB trust fund, but $220 million in liabilities, he said. But, “I think we’re well ahead of the curve in terms of what other communities are doing,” he said. “… We only established (the fund) in 2008, which was when the economy was tanking. To go from zero to 37 is tremendous progress.”
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