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Hamilton: Norwalk is in good shape, credit agency rating-wise

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.”

Comments

4 responses to “Hamilton: Norwalk is in good shape, credit agency rating-wise”

  1. LWitherspoon

    $37 million in the OPEB fund vs. $220 million in liabilities?
    .
    When do those liabilities come due and what’s the plan to make up the balance?

  2. Piberman

    Once again City officials call attention to our AAA rating (a function of good jobs in booming Stamford for our mostly residential City) hoping no one who notice how City per capita spending is growing almost 5 times as fast as our incomes over the past two decades. Or our top ranked Municipal salaries. Or stagnant property values, Grand List and redevelopment. Or a City increasingly attractive to renters replacing long time home owners. Haven’t our politicians taken Finance 101 ? Or ever heard of going through City budgets line by line and rewarding employees for doing more with fewer resources ?

  3. Suzanne

    What strikes me is the grand disconnect from what you mention PiBerman and the distribution of funds that leaves so much of the City’s infrastructure neglected. The great decline of Norwalk is peachy as long as we have that triple A rating but the taxpayer and their concerns are left out in the cold.

  4. piberman

    Suzanne:

    The City’s AAA rating has little if anything to do with City financial management but mostly our citizens employment opportunities in Stamford. Rating agencies are unconcerned with our public teachers salaries 5th highest in the state, stagnant housing values and Grand List, lack of redevelopment stretching back decades, public school performance, recent population growth well below surrounding towns, the City’s attraction as a rental community for a transient population and so on. The very fact that City officials and politicians call attention to the AAA ratings as a measure of the City’s performance demonstrates their failure to understand the consequences of a 55% increase in per capita spending over the past two decades amidst a per capita income growth up only 10 percent. When was the last time that a Council member demonstrated any mastery of the City budget ? Or the BET ? Without any substantive financial oversight by either the Council or the BET Norwalk will continue to deteriorate and loose ground to the surrounding well managed communities in Fairfield County.

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