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Letter: Claims of Norwalk’s fiscal health are misleading

By Peter I. Berman

To the Editor

NORWALK, Conn. – In a recent OpEd, Fred Wilms, long-time chairman of the Board of Estimate and Taxation (BET), claimed Norwalk’s economy was strong, having rebounded from the Great Recession with city finances in good shape. Even though it’s election season, the evidence is overwhelming in the other direction. Property values are a good indicator here.

The city’s Grand List remains stagnant, falling increasingly behind Stamford. Norwalk’s residential property values have remained stagnant for three years despite a pronounced national housing price rebound. Commercial and industrial development remains tepid by any standard. Our predominantly residential city remains a poster child for decades-long failed redevelopment efforts.

These depressing developments are hardly surprising now that we’re three years into the national recovery. Norwalk has the highest municipal salaries of any city in the state. Only five small communities pay their teachers more than Norwalk (see the recent Arbitration Report), yet our incomes rank just 19th in the state. There’s long been a major disconnect between our median household incomes – about $72,000 – and municipal worker compensation now averaging about $100,000. Norwalk’s “golden” union contracts and legions of $150,000 administrators are legendary. Many of our city and school administrators earn as much if not more than Gov. Dannel Malloy. City government is both the largest and best-paying major employer in Norwalk. Reportedly, most city employees live elsewhere, where taxes are lower.

Stagnant local property values and Grand List some three years into economic recovery hardly buttress BET Chairman Wilms’ ambitious claims. Yet our legendary municipal salaries and punitive real estate taxes are not recent developments. Even during the Great Recession, Norwalk’s taxes and spending rose in contrast to sharp declines in municipal and state spending nationally. Norwalk’s “golden union contracts” mirror those handed out in Hartford – among the best in the nation. Sadly, neither mayoral candidate talks about out-of-control taxes and municipal salaries.

Punitive property taxes largely explain Norwalk’s stagnant property values. Indeed, the recent Arbitration Report took special notice of Norwalk’s much higher property taxes as being responsible for Norwalk’s much sharper property value declines during the Great Recession, compared with surrounding communities. High property taxes required to finance excessive salaries are a two-edged sword. Collectively, Norwalk property owners have foregone billions of dollars of anticipated property appreciation. Long-term retired residents are especially penalized from high property taxes. Their only recourse is to post a “for sale” sign and move.

Norwalk’s political leaders have long promised property tax salvation from encouraging new business development. But the city’s well-known high property taxes keep developers distant, save the big boxes largely responsible for sweeping away much of the city’s once energetic small business community. Promises of salvation through “growing the Grand List” are empty, indeed. High property taxes discourage both development and private sector jobs growth.

What can we do ? Neither mayoral candidate (or political party) has taxes and spending on the front burner. A good start would be holding property taxes unchanged for several years. That would force department heads to work harder with fewer resources and encourage the Common Council and city officials to work much harder negotiating with public unions. They can learn from the Board of Education’s recent success. Not rocket science.

Longer term, extending the terms of the mayor and Common Council to four years may have some merit. Term limits warrant discussion. There’s no value from council members “serving” for decades. A revitalized Democratic Party could be helpful, but our experience with state budgets in Hartford suggests otherwise. Maybe the best suggestion is eliminating the ineffective BET and electing a Board of Finance, as do many well-managed communities. Hopefully, citizens with credible financial backgrounds would seek election.

Norwalk’s stagnant property values and Grand List during these past three years amidst a vigorous national housing recovery has firmly demonstrated the well-known linkages between excessive municipal salaries, punitive property taxes and depressed property values. Collectively, our residents have lost billions of dollars of anticipated property appreciation. As long as it’s business as usual, the only real winners are the city’s employees, as properties are caught in a vicious cycle of ever-higher property taxes and lowered values.

Making Norwalk once again a prosperous and affordable city requires

financially knowledgeable elected officials firmly committed to financial discipline. Unfortunately, neither political party nor the candidates presently have that commitment. And the business community has taken notice. The smart money is betting an ever-more transient Norwalk and further property value declines come the next recession.

Not everyone can work for City Hall.

Peter I Berman

 

Comments

18 responses to “Letter: Claims of Norwalk’s fiscal health are misleading”

  1. Oldtimer

    Strong, the way the word was used, means only well managed enough that the City’s credit rating has been maintained. That is certainly something to take pride in, even if it doesn’t satisfy professor Berman’s concept of how a City should be managed. He has, at least, stopped saying Norwalk teachers are the highest paid to now saying they are paid less than teachers in five other communities. He still thinks Norwalk pays employees too much, but doesn’t offer much to back up that claim, or any alternative to what he sees as excessive salaries. It would be more interesting if he made comparisons between similar jobs in other communities and in the private sector. He might find the real numbers don’t support his position.

  2. Don’t Panic

    There WAS a candidate in the race focused on spending to keep property taxes low. The people of Norwalk chose to go in another direction. Clearly they don’t prioritize this issue.
    .
    The other party’s incumbent common council members talk about keeping taxes low about as often as they breathe oxygen. If it were really the political issue of our time, wouldn’t they have moved heaven and earth already to get the job done?

  3. Tim T

    We have seen the waste of the Moccia administration time and again. We also have seen the out of control waste of the Norwalk police Department due to Rilling’s failure to control overtime. Its sad when most all cops are making 100,000 plus with many close to 200.000 All on the backs of the taxpayer.

  4. Rick quitel

    peter,
    You have been complaining about Norwal for over 15 years. As i recall when i worked for the city you used to say that voters would vote with their feet if things didnt get better. Apparently you have not taken your own advise , so i presume Norwalk is not such a bad place for you.

    Frederic Quittell

  5. Tim T

    You have to love when former city employees write in defending the cash cows that they have profited from for so many years.

  6. piberman

    To Oldtimer:

    The Arbitration Report and supporting documents by Finance Dept Head Tom Hamilton and BOE Attorney Tom Mooney state that Norwalk public school teachers are the highest paid in CT save for 5 small towns. Since our income only ranks 19th most citizens seem a major disconnect. To the best of my knowledge no one so far has claimed that Norwalk enjoys special education benefits from such salary excesses.And from an unusually hostile teachers’ union to boot. Read the NFT’s Vanguard and see how they regard the BOE and City officials. Of course, if you believe the City benefits from excessively high teacher salaries relative to our modest incomes (median household incomes of just about $72,000) then keep voting for the folks who gave us such largesse over the past several decades. They gave the NFT everything desired.

    To Mr. Quitel

    Two decades ago Norwalk was well recognized for its low property taxes, low municipal salaries, sustained property appreciation and vigorous political discourse among 3 major political parties. Nowadays the City’s reputation is different, e.g. poster child for failed redevelopment,
    highest teacher salaries of any city in the state, stagnant property values 3 years running, stagnant Grand List and regrettably just one functioning political party.
    Those of us long lived residents who remember the good times still believe an enlightened community can improve our governance. But that’s going to take a far more active interest in civic activities by our populace. What’s especially troubling is that retired folks with high taxed properties and no prospects of property appreciation are more or less compelled to sell and move by ever higher property taxes. It’s hard to see any new municipal service over the past 30 years. Just higher taxes for municipal employees doing pretty much the same job. Most of us think we can do better. But we’re getting on in years. But saving a community from indifferent governance still seems worth pursuing after these many years if only to honor the efforts of those who came before us. Norwalk was widely admired until several decades ago. So gather round and roll up your sleeves !

  7. Oldtimer

    Professor Berman
    You were a teacher at the college level. How did your pay compare with Norwalk Teacher’s ? If there was a significant difference, why ?

  8. Don’t Panic

    Prof. Berman,
    .
    I always read with interest when someone cites documents that shows they have delved deeply into an issue, as you have done here.
    .
    I can appreciate the point you are making. I really can.
    .
    What I would really like to hear from you, as someone who has thought this through is what you would like to see done.
    .
    Are you suggesting teacher pay cuts? Privatizing more city services to get rid of those pesky unions? Eliminating zoning regs so developers have carte blanche?
    .
    I don’t look to be snide here. I really would love to act upon something that is actionable.
    .
    Which Council candidates embody the change you want to see? What increased services do you feel we should have and what action should be taken to pay for them without raising taxes?
    .
    Identifying the problem is a good first step, but figuring out how to fix it would be even better. With an election at hand, this is the best time to advocate for a real plan for change.

  9. RQuitel

    To all u anonomous posters.

    The first ammendment provides for freedom/ protection of free speech, and u fail to take responsibility for your statements
    What are you all so scared of ??

  10. Tim T

    To RQuitel
    The only name that matters is taxpayers…
    Also as far as I am concerned RQuitel is also an anonymous name.

  11. piberman

    To “Don’t Panic”:

    What we need to focus why Norwalk residents continue to vote for the same long time Councilmen – some “serving” the community for upwards of 3 decades – for being fairly indifferent to the City’s fiscal affairs. Reportedly the Council gives the BET authority here and in practice the long time serving BET Chair and Finance Dept. Head set the City’s budget presumably with some input from the Mayor. The Council then approves the budget requrest and associated tax hikes. The Council is not involved in the budget process itself according to recent comments by Doug Hempstead, a 3 decade Council member. The BET Chair is nominated by the Mayor and approved by the Council. A funny way to run the railroad. I’m not aware of any other city in CT that follows this peculiar procedure where the Council punts the budget and tax issues to an appointed Committee/Chair.

    Tax and budget matters haven’t received front line attention for the last 7 elections. And they are off the agenda now. So the available choice is placing a “for sale” sign.

    What is quite extraordinary is that courtesy of the Arbitration Report we have now know “publicly” from an authorized body that Norwalk has the highest cost of municipal services of any city in CT. Yet the opposition party ignores such information and the Administration folks follow the same strategy. In a well functioning community such information would be cause for public concern. Norwalk residents follow a different drummer when it comes to taxes, salaries and stagnant property values.

    Longer term what might we do differently ? New Council candidates could help but only if they were interested in budget matters. Years ago Council members were expected to be quite knowledgeable about budget matters. Not so today. Collectively the current Council members are apparently quite happy to punt budget matters over to the BET Chair and focus on more important issues (to them). They have busy “agendas”.

    Many communities elect a Board of Finance rather than have an appointed BET to set budget and tax matters. Presumably candidates with such positions would have senior level financial capabilities or be accountants. This would require a charter change.

    Still another possibility is “encouraging” a new BET Chair and members. But its unclear whether any new set of BET members would have senior level professional capabilities. To the best of my knowledge none of the BET members or BET Chair in recent decades have had senior level financial management experience with organizations as large as the City. If they had those qualifications then presumably they’d have paid attention to union contract negotiations over the years with much greater attention.

    So I see 3 possibilities – replacing current Council members with new blood, replacing the BET with financially well qualified members and changing the Charter to repalce the appointed BET with an elected Board of Finance.

    It’s important to note that the BET is required to participate in all union contract negotiations. The only way Norwalk could become the top gun among the cities in municipal salaries is with a “go along asleep at the switch” BET. Similarly our BET Chair saw no difficulty in raising the budget and salaries and taxes during the Great Recession.

    There is a relevant standard for assessing financial managerial competence. The standard is whether the individual would ordinarily qualify as a “court appointed financial expert”. Typically such individuals are hired by attorneys in legal proceedings and offered to the court as “financial experts” where they are obligated to “serve the court in their professiional capabilities”. On many occasions in various courts I have served in this capacity so have some knowledge of the qualifications. Interestingly CPA’s are accepted as are financial managers of large firms and non-profits qualify.
    Again to the best of my knowedge over the past several decades none of the BET members meet that criteria. The Mayor’s choice trumps all.

    All of us can agree that a politically appointed BET and Common Council generally unconcerned with financial affairs (save the total and tax rates) have not served the community. What I find most curious is that Norwalk voters will likely return to office the very same Common Council members responsble for allowing the highest paid municipal workers of any city in CT, the punitive taxes needed to fund those salaries and stagnant property values for the past several years reflecting those taxes.

    From this perspective its really quite amazing. Norwalk residents having new knowledge a about their civil servants salaries are seemingly inifferent. As is the opposition party. Best I can determine not a single candidate in the current election has raised these concerns. Norwalk is unique. I am not aware of any other similar sized community or larger that appears utterly indifferent to property tax levels and the loss of billions of dollars of unrealized property appreciation caused by tax levels required to finance the highest municipal salaries of any city in the state.

    In closing it was different several decades ago when Norwalk had 3 vigorous political parties including the Independents. And very low or no tax increases, low municipal salaries (relative to the private market) and strong property value appreciations. Without a well functioninig competitive political party there is no reason to expect any relief. So everyone lets go out and vote back those Common Council folks who put the fortunes of City workers ahead of the residents. Its the “Norwalk Way of Good Government”.

    One more thought. Business people and developers are certainly aware of the “Norwalk Way”. And until it changes Norwalk will remain the state’s poster child of failed redevelopment efforts. And business investment generally. Just go ask them !

    Still another thought. Anyone who wonders why the Common Council remains seemingly indifferent to correcting the travails of NEON, the P&Z and the Oak Hills Authority ought to reflect why this is surprising. After all the Common Council punts on the budget/taxes, too. And seemingly has no interest in participating in the City’s budget construction.

    Norwalk has a “strong Council weak Mayor” form of government. Unfortunately as best i can judge over quite a number of decades our Council neglects its most basic responsibilities. Only an informed citizenry can correct that deficiency.

  12. Norwalk Lifer

    Mr.Berman’s comments are well taken, if we view this only in a fiduciary sense, he is correct.

    Area’s that have recovered from the housing debaucle, and South Florida is one of them, are seeing increases in their city coffers due to the conveyance tax activity. Norwalk’s housing market is basically static right now. It’s clearly due to the lack of good paying jobs in the area that would invite a strong middle class into this area.

    What we are seeing is a tipping of scales which is causing a flunctuation in our ability to maintain city services while promoting the opportunities a start up or small business might enjoy in establishing their business in Norwalk, and I do not refer to Big Box stores.

    If we continue to see property values decrease in Norwalk, we will see the kind of landscape as there was in Fort Lauderdale in 2010; whole streets of foreclosed properties. It can’t happen you say? I beg to differ, the indicators are all there.

    Without a strong tax base, and we do depend on the ebb and flow of property transfers to maintain a strong and robust revenue stream, we have to cut city services.

    if we cut city services, then we risk not attracting those who tire kick Norwalk and walk away.

    I do not think Norwalk has to go to an extreme to do this, I think Norwalk needs to get off it’s dead ass, and market it’s opportunities, and that does not mean a person like Frank Zullo, exploring his crony base to attract the same kind of business to Norwalk.

    Open up your eyes, there are countless technical conferences in this country daily; I for one, would like to see a dry run presentation of why Norwalk is such a great place for a small technology start up to land, I for one, would gladly pay for the plane tickets and the hotels, so those that would represent our city well, can go “OUT INTO THE WORLD” and try to attract businesses to our city.

    Look if Rick Perry has the stainless steel you know what’s to go to California and try to attract the technies to Texas, then we should start thinking like Texans and think “BIG”.

    Then “plastic surgery” like teacher’s pay would not be the Ultimate solution to a suffering fiduciary state.

    Regards
    Norwalk Lifer

  13. jlightfield

    @NorwalkLife There is an organization in Norwalk deeply involved in the regional tech scene and busy attracting entrepreneurs to Norwalk via events and workshops. Norwalk Center is the most active tech corridor in Norwalk, with dozens of tech startups filling offices throughout the district. SONO has a significant amount of media tech startups as well. Over 60 entrepreneurs came to a workshop this past summer to learn of funding opportunities available statewide and for all stages of startups. As one of the founders of Norwalk 2.0, I have always viewed the creative economy as the driving force behind local economic development success, and am very thankful for the State support our organization has received.

  14. Norwalk Lifer

    Dear Lightfield, you could engage those manufacturers, not just the software start ups, there are many, look at Arizona, they made it very attractive for Schott to build a solar division there. And the incentives to build were stagnant until the 2008 election, once that was over, Schott built it, people came, the University of Arizona, one of our finest schools when it comes to Optical Engineering, was able to place their graduates in a new field, and that field is very healthy.

    What I am saying is, “do more”, innovate, get people to those tech conferences, engage with those still on the Route 7 corridor who are currently engaged in high tech, have them advocate Norwalk.

    You can’t do this without those who understand the technology, those who understand the roadmaps, there are countless opportunities for Norwalk. But don’t do it in a vacuum, that won’t work

    Regards
    Norwalk Lifer

  15. Don’t Panic

    @Professor Berman,
    .
    Thanks for the thoughtful answer.
    .
    Your entire first paragraph speaks to the way the government is structured. As you correctly note later on, that would require a charter change, but I don’t know that electing people to a Board of Finance would necessarily produce more qualified representation. Elections are largely about who steps up and commits to the large amounts of time and money to run. At least with appointments, anybody who is qualified is reasonably able to get the spot with about the same amount of scrutiny as a job applicant. That begs the question of who is doing the appointing and what criteria they are using, which is where we may be failing, as evidenced by what is going on at Planning Commission, Zoning Commission, NEON, etc.
    .
    I have had at least one council member tell me that the mayor is supposed to get his appointments, and it is not the council’s job to interfere with them unless someone is disqualified by their conduct. To my eye, the process would not have required council approval unless they were to apply their own judgement to the process, and abdicating their right to vote down candidates on their qualifications (not their party affiliation) is part of why the “strong council-weak mayor” structure is so out of whack.
    .
    I agree that the council and the mayor’s seat are fairly stagnant, but again, turnover would not necessarily improve the qualifications of those running. What it DOES do, however, is continue to consolidate power to the Mayor’s office at the expense of the Council. The longer this Mayor continues to make appointments to various commissions with fairly rubber stamp approval, the greater the likelihood that the Council will not have the kind of visibility or influence to do the job needed.
    .
    Your observation about the voting public is spot on. There WAS a candidate in this year’s race for Mayor focused on the budget issue and taxes. It’s no secret that I supported that candidate – Matt Miklave. Yet, the message did not resonate with the voters. Voters (or Dems and Unaffiliateds, at least) chose to go in another direction (or judging by turnout, to just stay home).
    Had this been the defining issue of the political season, he would have had a runaway success.
    .
    So you have to look at what DID bring voters to the polls. What are they paying attention to? How do you prioritize a complex, structural issue over things like crime stats, which are easier to rate, but don’t have impact on this kind of indirect, but more impactful issue? Have you reached out to Mr. Rilling’s campaign? Mr. Moccia’s? Are you calling and emailing the candidates for Council At Large and your District? Did you consider running yourself?
    .
    It is my hope that your advocacy helps these issues find their way into the campaign platforms of the candidates, so that everyone has an opportunity for an open discussion.

  16. Jlightfield

    @norwalk lifer, the reality of manufacturing is that it’s all heading towards robotics and computer controlled manufacturing. So IMHO that’s tech. There will be a huge shift in manufacturing in the next decade from the current upload a CAD schematic and build in China to uploading the CAD and having a robotics supply chain manufacture in the US. Colorado is the hotbed of that infrastructure, and if you follow the automotive industry Elon Musk is delivering on the promise of the revolution in manufacturing. I was in no way suggesting that Norwalk shouldn’t “get out” more, but merely pointing out that there are people active right here, right now, building the network and infrastructure of that economic engine. This is likely going down as one of the most exciting times to be an innovator and inventor since the industrial revolution. Norwalk has much to offer and will play a part in this economy but it will take time and hard work to structure Norwalk as a leader in this ecosystem. We welcome all the help we can get to make it happen.

  17. Norwalk Lifer

    Dear Lightfield, that’s one aspect of high tech, there are others, and one lives right on the Route 7 corridor, ASML, and they are not building robotics nor computer controlled or CAD manufacturing.

    I simply state there are other “hands” that can help

    Reach out to these technologies, they have a vested interest in promoting the technological health of Norwalk

    Regards
    Norwalk Lifer

  18. piberman

    To all:

    Having an elected Board of Education and an elected Board of Finance are common features of most American cities. That gives voters a direct say in how they want their affairs managed. But doesn’t guarantee success. Recall the “dismal years” with our own BOE. Then the quite dramatic reversal with very capable leadership.

    Its worth remembering that Norwalk’s unusual system of delegating most fiscal management arrangements to the BET worked relatively satisfactorily during the Esposito years. Then a combination of 3 vigorous parties – GOP, Dems and Independents plus a sizable cadre of interested small business owners kept both elected and appointed City officials on their collective toes. Low taxes, low muni salaries and appreciating property values characterized the “golden years”. Times change. The Independents are long gone as are most active small business “watchdogs” and the Dems are to be polite “suffering”. All things considered a charter revision with an elected Board of Finance might be the very best way of encouraging much needed budget and fiscal discipline. Term limits might discourage Council members for serving for decades. And a 4 year term for the Mayor would follow now conventional practice. Finally its worth noting that Norwalk has long been surrounded by 5 of the wealthiest communities in the nation. Yet they manage their budgets quite frugally. If they can manage long term fiscal discipline so can Norwalk. Stagnant property values and Grand List together with 5th highest teacher salaries in CT for a city with median family household incomes of only about $72,000 at least ought to encourage some serious discussion of how to do better with lower taxes. Ultimately communities get the governance they demand. Its not rocket science. The coming revaluation should be “really interesting”. And there’s a recession not too many years away. Now’s a good time to have that “community discussion” about how to bring about municipal spending that’s affordable to all our citizens.

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