New BET member spurs scrutiny of Norwalk benefit expenses

Updated: 6:22 p.m., defined benefit plan changed to 401K employer match program

NORWALK, Conn. – Benefits for a new Norwalk economic development director inspired a storm of questions Tuesday from a new member of Norwalk’s tax board.

“It would save the city $10,000 if the business and marketing director was getting health insurance through the city instead of the Norwalk Redevelopment Agency and that person had a similar 401K match program,” Board of Estimate and Taxation (BET) member Anne Yang-Dwyer said in the course of finding out from Norwalk Finance Director Thomas Hamilton about RDA’s status as an independent agency.

Yang-Dwyer also suggested looking into the raising some Norwalk fees to raise revenue. Hamilton and Mayor Harry Rilling will review the possibility of putting the new marketing person on the city’s payroll.

The RDA gets a grant from the city but also gets money from the U.S. Housing and Urban Development (HUD), Hamilton told Yang-Dwyer. Its board members are essentially a board of directors, who oversee an autonomous organization.

The city has a similar 401K employer match program but the RDA has a higher employer match, he said. Health benefits offered through the RDA are significantly more expensive than those offered through the city because it is a small employer, he said.

Hamilton said that before he came to work for Norwalk 10 years ago, a decision was made to separate the RDA’s health benefits from those offered by the city because the RDA’s claims were significantly higher.

New BET member Edwin Camacho asked if that was due to a systemic problem or a special situation.

“I don’t know that it’s systemic or if it was just bad luck, but I heard they had some pretty significant adverse claims experience that the city wasn’t comfortable having to subsidize,” Hamilton said. “That was why the decision, I don’t think there’s anything systemic about Redevelopment Agency employees in general that would make them more expensive than other employees. But I think there’s still, with a small group like that, you certainly run the risk of being in a situation where if we’re charging the Redevelopment Agency the premium equivalent, or the Cobra rate if you will, for health insurance, there are going to be years when they actually spend less than that and other years where they spend more… One catastrophic claim would push you over substantially what they are paying the city for.”

It’s not a regular city department, he said.

Norwalk is one of 17 municipalities that buy life insurance together, he said. “Maybe we can roll the Redevelopment Agency in,” he said. “We can find out if that would be a viable option or not. I’m not certain that it will be but it may be.”

The BET unanimously approved a $28,000 special appropriation to cover health benefits for the new economic director, a request made necessary because former Business and Marketing Director Tad Diesel was not getting health benefits from the city. The Common Council will consider the appropriation Tuesday.

Later in the BET meeting, Yang-Dwyer recounted personal experience with getting a building permit for a garage. It cost her $100 to have someone come out and inspect the property to see if the septic system could handle it, she said.

“I inquired with them and they said in Darien they will charge $2,000 to $3,000 for a full septic permit,” she said. “Small things like that, it may not add up to much but it might add up half a million or $1 million on the way.”

“I’ve always encouraged departments to do that and look at their fees regularly,” Hamilton said. “The health department is one of the ones that does look at their fees every year, in some sort of exercise. I don’t know if they benchmark all of their fees against other communities or not but it sounds like maybe there’s some opportunity there.”