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Hamilton: Norwalk on good financial footing

Norwalk Finance Department Director Thomas Hamilton speaks at Monday’s Board of Estimate and Taxation (BET) meeting.

 NORWALK, Conn. – Norwalk’s financial health is good, government officials said Monday, citing a recently delivered audit of the last fiscal year and revenue collection reports through Jan. 2.

The available fund balance grew $1.2 million in Fiscal Year 13 (FY13), Finance Department Director Thomas Hamilton said at Monday’s Board of Estimate and Taxation (BET) meeting. Projections for revenue collections in Fiscal Year 14 (FY14) indicate the city might collect $1.9 million more than estimated, said Director of Management and Budgets Bob Barron, who stressed that the projections are a “best guess” at this point.

The FY13 report:

Hamilton was citing an audit (officially, the Comprehensive Annual Financial Report, or CAFR) of FY13, which was delivered to the city Dec. 30 and was performed by the accounting firm McGladrey.

The city’s “net position” increased by $16.9 million or 4.6 percent in FY13, the audit says.

The city’s assets were $624 million, while the total liabilities were $333 million, the audit says. That made the total net position $291 million. Most of that is invested in capital assets, leaving $6.5 million in unrestricted assets, the audit says.

“That’s a positive number,” Hamilton said. Most other Connecticut large cities, with the possible exception of Stamford, have negative numbers, he said.

Norwalk’s businesslike activities – the Water Pollution Control Authority (WPCA) and the Norwalk Parking Authority – also have positive assets, Hamilton said. Together, their net position was up $12.8 million in FY13. It was up $2.1 million in Fiscal Year 12.

Hamilton tried to compare the picture to accounting phrases from the private sector.

“If somebody asks the question, ‘Well how did you do during the year? Did you have a positive year or did you have a negative year, or in the private sector, did you make a profit or did you lose money?’ Well, this is the statement that answers that question for you,” he said. “So the bottom line … we started the year with our government activity, with a net position $278.9 million, we end the year with $290.6 million, so we had a positive change in net position.”

Or, “We made money. We didn’t make money, but our net position improved over the year,” he said.

BET member James Feigenbaum joked that meant a higher dividend.

The general fund went up $2.3 million or 7.3 percent in FY13, the audit reports. Of the total of $33.434 million in the general fund, $29.75 million is unassigned, or, nothing is yet expected to be paid with the money. It’s in the bank, and is sometimes called the Rainy Day Fund. In June 2012 there was $28.531 in the fund.

The tricky part was assigning a percentage number to that fund, Hamilton and Barron said. The city’s charter calls for it to be between 5 and 10 percent of the city’s operating budget for purposes of getting a good bond rating. The Finance Department tries to stay at the 9 percent mark, they said.

Norwalk has maintained its Triple A bond rating. There are 169 towns in Connecticut and 13 are Triple A, they said. Most of those are in Fairfield County, and most of them have a much higher median income than Norwalk, they said. Norwalk’s median income is $73-74,000 a year, Hamilton said, while Darien’s is somewhere around $174,000, he said.

Stamford lost its Moody’s Triple A bond rating because its fund balance dropped and has not gotten back, they said.

“Honestly, they should be Triple A if Norwalk is Triple A, but it’s because of the fund balance,” Hamilton said.

The rosy projections:

Nearly $2 million has been collected in real estate conveyance taxes for FY14, which is 73 percent of the $2.7 million that had been budgeted in for the entire year, Barron said. A projection based on the mathematics estimates that a total of $3.476 million may come in, 28.8 percent more than anticipated.

Building permits are also way up, as previously reported. As of Jan. 2, the date the report was run, the city had collected $2.169 million in building permit fees. That is 83.4 percent of what had been budgeted for the entire year.

Investment income and recording fees are lower than anticipated. But the higher numbers of building permits and real estate taxes offset those lower numbers, and the city is projected to take in $1.9 million more than expected.

That’s a conservative number, but still a guess, Barron said.

“Right now it’s looking pretty good,” he said.

Mayor Harry Rilling asked why the recording fees were down 1.8 percent if the real estate conveyances were up.

Hamilton said he suspects refinancing activity is down. BET member Erik Anderson, who works in banking, confirmed that.

Barron also said the biennial tax sale, scheduled for June, was driving tax revenue collection. The city has collected $510,000 since a mailing went out in November to properties scheduled to be on the sale.

“We anticipate more in tax collection,” Barron said. “People will come and pay their current taxes and pay their back taxes, too.”

See for yourself

The audit Hamilton references can be found here. Scroll down to pages 11 and 12 for what Hamilton said would be called the balance sheet in the private sector. Page 12 would be full accrual accounting. The fund balance is on page 13.

The BET agenda is attached below. Page 137 is the tax collectors report. Page 138 is the summary of key revenue drivers.

BET Jan. 2014

Comments

30 responses to “Hamilton: Norwalk on good financial footing”

  1. anonymous

    Norwalk ‘made money’ because it overtaxes it property owners. Norwalk taxpayers do not get the value that they pay for.

  2. More of the Same

    @anon. Exactly. Good financial footing would be only raising taxes as much as inflation requires. City workers are overpaid, generally, and would be very easy to replace in this job market. The entitlement mentality has to stop. It is incredible that they can demand raises in this economy with a straight face.

  3. Casey Smith

    @ More – Aren’t most City employees members of unions? I’m not sure that anyone could fire an employee for “making too much”. Also, I think the salary raises are part of a pay scale that is negotiated during contract talks and later approved of by the Council.

  4. marjoriem

    More of the Same, give your argument up! You are obviously suggesting that Norwalk teachers should be paid less than the teachers in surrounding towns. Are you kidding? Who would apply for these jobs? Teachers who can’t get a job anywhere else? Teachers who have been fired from other districts because of their incompetence? You are not living in the real world if you think our children deserve less than they have now. Any parent who earns an average of $ 74,000 would move out of Norwalk so fast that your head would spin from the wake of moving vans leaving the city. Property values would fall to the lowest levels ever. Bridgeport would look good for anyone looking at Norwalk as a place to live. So, according to your thinking, many teachers are waiting to take these jobs for a lower salary. If you work, the same holds true for you. There are many unemployed people who would take your job for a lower salary. Are you willing to take a $10,000 pay cut? A $20,000 pay cut? What’s good for there’s hers should be good for you, don’t you think?

  5. marjoriem

    “Teachers” sorry for the auto-correct error

  6. Marj,
    Are you serious? I make well over 74k and couldn’t sell my house w/out a loss – and yes, the teachers are so overpaid for what they are “producing” – a majority of them would be fired in the real world.

    Also, could you either respell or explain your last sentence; it doesn’t make sense (“What’s good for there’s hers should be good for you, don’t you think?”).

  7. More of the Same

    @Marjoriem. Sigh. Did I ever say roll back the clock? No. All I’m saying is stop paying out increases that the market will not bear. Real wages are down for the private sector, but the public sector keeps growing and growing and growing. It can’t keep up the current pace. The recent pay freeze still doesn’t undo 20 years of above average raises. And the kids 20 years ago did just fine without hundreds and hundreds of 6 figure plus city workers, thank you.

  8. You may want to check your facts

    Real wages aren’t down in the private sector, not sure where your source is for that. Not to mention, 20 years ago, we didn’t have stifling obstacles in education such as NCLB and this latest disaster that the Fed (not the city of Norwalk) is force feeding teachers. Also, can you cite where your taxes have increased in the last 5 years beyond that for inflation?

  9. No partisan

    Sounds great
    We should have no increase in the mill rate this year if the city acts responsibly. Here’s why
    The general fund balance is now approaching 10% of the total budget. this is a mid year calculation ( probably conservative with improving economy)
    The proposed grand list went down 6%
    So you could fund most of the decrease from the general fund balance, maintain your bond rating, etc. And reduce the fund balance to 5%
    Let’s hope our leaders resist the temptation to spend the money, and also increase the mill rate (due to grand list decline.)

  10. More of the Same

    From the U.S. Census bureau…. per capita income in inflation adjusted dollars is less than it was 10 years ago. The city budget is up 50% from 10 years ago. 20 years ago, per capita wages are up only 20%. The city budget is up 100% in that time. Of course these are national numbers vs. the city’s numbers, but the trend supports my assertion. Plus the fact that the census data includes the disproportionate increases to public sector. Plain and simple the trend can not continue forever.

    http://www.census.gov/hhes/www/income/data/historical/people/

    Year Number (thousands) Per capita income
    Current dollars 2011 dollars
    2012 311,116 28,281 28,281
    2011 308,827 27,554 28,130
    2010 306,553 26,558 27,968
    2009 304,280 26,530 28,400
    2008 301,483 26,964 28,755
    2007 299,106 26,804 29,682
    2006 296,824 26,352 30,010
    2005 293,834 25,036 29,446
    2004 291,166 23,857 29,000
    2003 288,280 23,276 29,058

  11. Piberman

    As apples fall from trees City property taxes will go up this year to fund the higher salaries of the highest paid City employees anywhere in CT. Independent of the City’s financial position. The smart money is betting a 4 to 5 percent tax increase to “reward” the City unions for their election “support”. And despite a burgeoning stock market and national housing boom City properties will continue to stagnate as the exodus from overtaxed Norwalk continues. The word is out – the New Norwalk works for City unions. As did the Old Norwalk. In most cities public employees work for taxpayers. But in Norwalk we do it backwards.

  12. Tim K

    I know no one wants to hear this, but I work for a Fortune 100 company and we had a great year. So was my raise. Additionally, the stock market is up 30% too. Isn’t it time to stop bashing government employees and treating them like our servants? The constant negativity is very small-minded and really not a flattering reflection of what I want my city to be. It presents like ignorance.

  13. You may want to check your facts

    Piberman, source for your claim? Where is the max exodus???

  14. WOW!

    @Tim K:
    Finally, someone who puts self interest aside! Good for you. Norwalk needs more successful people like yourself who are willing to contribute for a better city. FYI, the school superintendent’s presentation was impressive tonight and the BOE was unanimous in supporting his vision. By the way, Tim, NoN does a great job and it sounds like she could use a little financial contribution herself. My guess is that you would be more inclined to kick in than some of the other folks who only enjoy lamenting! 🙂

  15. David

    Piberman waxing poetic, once again! What exodus? It’s not happening.
    .
    Tim K: You picked the wrong crowd for cheerful news! lol. Come back when yo u have some misery to share 🙂

  16. Non Partisan

    @tim K
    Like you I work in the private sector and have had a good year.
    But this was after the 2009 10% pay cut, out of pocket health insurance costs ( i pay half the policy cost) that have tripped in 10 years, and a 401k that won’t meet my retirement needs after working full time forr 45 years. It is not just salary but the whole compensation issue

    Compare this to govt employers who had no pay cuts thru the great recession, pay 10 to 15% of their health care policy, can retire after 25 years in a defined benefit plan, and have guaranteed health care thru retirement. Where is the fairness?

  17. More of the Same

    Hard to post a spreadsheet here.
    .
    There are diamonds in every rough.
    .
    The superintendent’s budget is a fair starting point.
    .
    Facts are, according to US Census bureau that per capita income and purchasing power are down.
    .
    Facts are, CT’s economy is shrinking. The only one of 50 states according to the US Chamber of Commerce.
    .
    This is not the time to give raises to a sector that has enjoyed above average raises in down economic times. To think otherwise is the same kind of mentality that gets us into trouble time and time again. Saving for a rainy day is not a bad thing.

  18. You may want to check your facts

    Except according to national averages, city raises for Fire/Police/DPW are about on par, which falls between 2 and 3%, usually falling toward the lower side of 2%, keeping pace with inflation as its intended for. You’re also citing data (Census) that was accumulated in what? 2010? The very start of the recovery? That’s not a very accurate depiction of 2014. Those surveys I posted are though.

  19. piberman

    Time for everyone to read the Arbitration Report which cites the NFT’s 5th highest pay ranking in the state. The NFT’s attorney’s didn’t dispute that statement. Nor did they dispute that the City’s income ranking was just 19th in the state nor that the median household income was only about $70,000 – far less than the average cost of a Norwalk teacher’s salary/benefits. Our surrounding towns manage earn 2 to 4 times as much yet manage to pay their employees less and take pride in some of the best schools in America.

    So the questions becomes are Norwalk residents getting “fair value” from their teachers and are their teachers overpaid relative to the community’s income ?

    Judging by stagnant property values for 3 years running amidst a national housing boom that has mostly restored pre-Recession values together with a strong national economy and booming stock market Norwalk isn’t a favored destination.

    Even the teachers by and large don’t live here anymore. Nor do our public school graduates return here to live. Nor do residents from surrounding towns move here. There’s a good reason rental apartment buildings are springing up downtown. Simply reflects our “first in first out” reputation as Fairfield County’s transitional City.

    No doubt will be smiles all around at the new 4 to 5 % tax hike coming in 2014 in the City famous for working for its employees. We can be sure that the police union expects “their chief” to do much better than the 8% over 4 years given the firefighters this past year. And the school teachers will be seeking 4% annual pay hikes in their new contract. After all its “only fair”. In the Arbitration Report the NFT’s attorney claims that “Norwalk is one of America’s wealthiest cities”. So there you have it. We’re all rich ! Our public school teachers can’t be wrong !

  20. You may want to check your facts

    Proof of the mass exodus? How many times must this be requested from you?

  21. David

    @You may want to check your facts: You don’t see the mass exodus from Norwalk? You can’t see it? You must be doing something wrong – so, do this: go down to the basement, close all the blinds and put on a tin foil hat. The visions will come, hard and fast.

  22. More of the Same

    Record number of property listings will be on the market this year. Write it down. More to do with poor policies on the state level. But nevertheless we will be sandbagged.
    .
    @checkyourfacts pensioner. 2011 census data. they’ll publish 2012 soon and it is going to show worse even though GDP calculations now include intangible assets and number of tweets and whatever else they can use to goose the numbers. They are still bad. Time to tighten the wallet.

  23. You may want to check your facts

    Errr. Isn’t the census conducted every 10 years? Or are you talking about some other census? Do the links I posted not make sense? Still no hard data on this “mass exodus”?

  24. More of the Same

    @Fact Checker pensioner. The census bureau doesn’t stop working every 10 years….although no one would probably notice if they did they are so productive like all their brethren. Rather they publish data all the time. hint…. http://www.census.gov

  25. You may want to check your facts

    So I ask again, what are you basing this off of? Why does every survey taken show private sector income up and showing no sign of slowing.

  26. Piberman

    Friends:

    Can anyone explain why Norwalk’s public school teachers, 5th highest paid in the state, by and large live and educate their children outside Norwalk ? Is it because they want a better schools for their kids, pay less taxes, salaries too low, properties too high, or some other reason ?

    Once upon a time most of our teachers lived here on much lower salaries and taxes. Why don’t our City employees want to live here ? Would they live here if we paid the highest salaries in the state ? What might we do to encourage our school teachers to live in Norwalk ?

  27. TG

    Great question, @piberman. To note, I do appreciate that you asked, rather than making assumptions, as I know you are, um, passionate about this topic. :).

    I can’t speak for everyone- but I can speak in generalizations based on what I heard over the ten years or so I taught in NPS. Consider this very unofficial. I’m not sure if you or others who feel teachers shoukd live in the town they teach on have considered the simplest answer to this. Many were not Norwalk residents to begin with. If you owned a home in Trumbull, or Fairfield, or wherever, would you sell your home, leave a town you’re comfortable in, perhaps move your children’s school in order to live in the town where you work? That’s not typical. And I’ve found that a fair number of teachers that are Norwalk born and raised are choosing to live here as teachers too. I can think of a bunch off the top of my head. However, the ones that choose to live elsewhere do so for the same reasons that any family does- you can just get more for your money elsewhere. I happen to live in Norwalk, always did during my years teaching. However, given the choice (which i don’t have right now), I would move to Trumbull or Monroe. my mortgage would be cheaper, and I like the environs better, tge green space, and the further from NYC the better for me. Most teachers who don’t live in town move away from the gold coast. They live in Monroe, Shelton, Milford, Stratford, with a smattering of Fairfield. Again, we’re unofficial here. One final note, and I’m sure very few people consider this: I have heard teachers say they don’t want to live in Norwalk because they just prefer to have a private and separate life elsewhere. They’d like to do their grocery shopping in their sweats without running into students or feeling compelled to have an impromptu conference with a parent. I can really respect that. For me it was different- I actually liked seeing families in the community, but it can have it’s challenges for sure. To each his own.

    One thing I will say is that at no point did I feel like the teachers that live in Norwalk are more invested in their job or their outcomes than those that live elsewhere.

  28. More of the same

    @Fact checker pensioner.
    .
    Since you have so many sources for your information, would you mind sharing just one? I dare you. Just one.
    .
    Inflation adjusted data from the U.S. Census bureau show that per capita incomes are down. For the 4th time, that is what I am basing this against.
    .
    The irony of your pen name given you’ve never actually cited one reliable source of information is amazing.

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