NORWALK, Conn. – When it comes to municipal budgets and labor contracts, there is no easy route to understanding what the figures mean. Sometimes, what seems like a raise or a cut at first glance can be just the opposite – or, at least, a break-even situation.
With the recent wrangling over the new city and Board of Education budgets – and with an election looming – accusations have been hurled that city and school employees are overpaid, and that those responsible for negotiating those salaries have been asleep at the switch or have favored the unions.
We spoke with Common Council member Bruce Kimmel (D-District D) via email to get a sense of the when, how, why and who behind the current Norwalk city contract structures, and he explained that, despite complaints from some quarters about pay increases, there is more than meets the eye.
“It has been the policy of the city and the BOE (Board of Education) for about a decade to reduce the cost of insurance premium contributions in all negotiations,” Kimmel said Wednesday. “Thus, the premium payments made by employees have gone up over this period for every bargaining unit in the city.
“Whenever I look at a new contract, the real issue is not the actual salary increase, but the net cost of the contract to taxpayers. A hypothetical example: A contract may indeed have a 2 percent or 3 percent salary increase, but nonetheless, after the savings to the city from increased employee premiums are factored in, the actual cost of the contract to the city or BOE may, in fact, be neutral; or, in some cases, we may even be saving money. We have been making steady progress in this area.”
Kimmel pointed to an agreement from several years ago making health savings accounts an option for employees.
“A number, if not all, contracts now have this provision, which I have been told is attractive to younger employees,” he said. “These accounts … generally save employers a fair amount of money. The issue is how many members actually enroll in them. I’m not sure what the overall policy of the city is, if we plan to switch over completely to HSAs.”
The city, too, saves money by self-insuring, he said.
Norwalk works with “a variety of consultants on all insurance issues, especially projections for the next year and even monthly claim trends,” Kimmel said. “This enables us to budget properly. The recent $4 million shortfall in the BOE insurance account was the result of unauthorized BOE budget transfers from insurance to special education. The actual amounts that were budgeted for insurance were accurate and thus we had sufficient funds in our insurance and contingency accounts. The projections, however, for special education were the problem because they were too loo; as (outgoing BOE Chief Operating Officer Elio Longo put it, not ‘truthful.’)”
Kimmel said the city and the BOE have installed new software that should prevent this kind of deficit or unauthorized transfers from happening again.
Pension plans, too, have been adjusted, changing the rules for incoming employees and saving the city money, Kimmel said.
“Last summer or fall … the city and the BOE switched over from a defined benefit plan for all pensions, which can be very costly in the long run, to a mandatory defined employee contribution plan, which is much less expensive, for all new hires. These function essentially like a 401k, although there are mandatory aspects that (I believe) include the amounts of the contributions.”
Kimmel also took issue with what he said is misinformation being spread by some frequent commenters on NancyOnNorwalk stories, as well as in other media venues. He took exception to statements regarding an arbitration report on the most recent teacher contract.
“The arbitrators did not discover that our teachers were fifth-highest in the state; that is public information that I believe was provided by the city’s finance department, which, as part of the arbitration, issued a long introduction on the city’s overall financial condition. More importantly, the arbitrators were not interested in the ‘fifth-highest’ issue, since we are in Fairfield County. They focused on the salary schedule and even ordered the BOE and the NFT to begin negotiations on a new schedule. That issue was so complicated that it was beyond the ability of the arbitrators.”
Kimmel said BOE attorney Tom Mooney told him he had never seen a schedule like that anywhere, which severely limited any salary increases between the 10th and 17th year of employment.
“The schedule is structured in a way that keeps senior teachers in the system, thereby increasing pension costs with too many teachers on maximum salaries,” he said. “It also does not encourage younger teachers to remain in the city.”
Kimmel said he asked for data on this, but the board was not able to determine all the reasons so many young teachers leave Norwalk.
“Our NFT salary schedule is the opposite of most municipalities, which now are doing anything possible to keep young teachers in their systems,” he said.