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Norwalk BoE considers $32M budget hike

A page from the FY 22-23 Preliminary Budget Request prepared by the Norwalk Public Schools Finance Department.

NORWALK, Conn. — Preliminary figures indicate a needed 14.9% increase in the Norwalk Public Schools budget for the coming school year. If they pan out, the Board of Education would be requesting $32 million more than this year’s school budget.

Part of the expected increase is due to the funding “cliff” then-NPS Chief Financial Officer Thomas Hamilton warned of in April 2021 when the Common Council zeroed out the school budget, keeping it flat and forcing school administrators to use federal COVID-19 relief grants to fund counselors and other positions.

“Just making us whole for that zero funding, $6.6 million, is roughly a 3% increase over the current budget,” Chief Financial Officer Lunda Asmani said at Tuesday’s Board of Education meeting.

Beyond that $6.6 million, Asmani spoke of another $4.4 million to continue positions paid for by federal relief funds, referred to as “ESSER,” the Elementary and Secondary School Emergency Relief Fund grant. ESSER funded some math coaches, math improvement teachers and ELA (English Language Arts) improvement teachers, he said.

Escalating special education costs account for $7.8 million of the expected need. While the $3 million invested several years ago to create in-house services is a success, saving the district perhaps $48 million, out-of-district costs are rising due to staffing pressures and NPS is dealing with COVID-related challenges such as agoraphobia prompting children to avoid school, requiring programs that haven’t been established yet, Assistant Superintendent of Schools Rob Pennington said.

NPS tries to keep children in State-approved programs that qualify for reimbursement, but children have moved into the district already enrolled in programs that don’t qualify, he said.

While parents can’t dictate their child’s placement, ripping them out of a program could be a detriment, Ad-Hoc Special Education Chairwoman Erica DePalma said.

Special education costs are also a factor in the coming budget reconciliation. The 2021-22 budget allocated $9 million for special education this year but it’s coming in closer to $10.6 million, Pennington said.

In another aspect of the developing perfect storm for 2022-23, grant funding is decreasing.

The State has raised the thresholds for excess costs grants, Pennington said. The resultant decrease in funding isn’t substantial per student but adds up overall, and 19 teachers need to be moved into the local budget to justify the figures.

The federal IDEA (Individuals with Disabilities Education Act) grant is consistently funded year after year but the cost of teachers goes up, Pennington said. Three teachers are being moved to local funding due to that deficit.

Adjustments to the Medicaid guidelines mean that one teacher will need to be moved to Norwalk taxpayer-funding, he said.

The base budget increase, without the ending federal grants, the skyrocketing special education costs and the State grant threshold changes, would be $13.6 million, or 6.2%.

A page from the FY 22-23 Preliminary Budget Request prepared by the Norwalk Public Schools Finance Department. NPS CFO Lunda Asmani referred to the blue line dip between FY21 and FY24 as a “scenic route,” inspired by using COVID relief funds to support a zero increase in FY22.

That’s less than the 8.5% projected increase that would have occurred without the “ESSER detour,” Asmani said.

BoE member Colin Hosten pointed out that 6.2% is less than the inflation rate, recently calculated at 7.2%.

Norwalk Superintendent of Schools Alexandra Estrella said the budget requests originally added up to an 18% increase. “We asked every department to really go through their individual budgets and reduce their budgets, by a minimum of 2%… So we’ve gone already through extensive reviews within each department and made some significant reductions. The challenge we have, one, like you articulated Colin, the costs have been elevated, like everyone else… in part because of inflation.”

Education staff shortages have also escalated costs, Estrella said. “All of these components have built the number that you see now. Is this what we would want? Absolutely not. But this is what we need to keep our students in a learning environment that they deserve and is conducive to productive learning.”

A page from the FY 22-23 Preliminary Budget Request prepared by the Norwalk Public Schools Finance Department.

Hosten highlighted complaints from some that ESSER funds should have been spent on non-recurring expenses. NPS did spend some grant money on one-time expenses like personal protective equipment and ventilation but 80% of a school budget goes to personnel, salary and benefits, he said.

Asmani came to NPS after years on the City-side of budgeting. There, you do have options to invest in non-recurring expenses but you don’t have them in education, he said.

“We did spend some time on furniture and equipment and bathrooms and just making them accessible and safe during the pandemic. But there’s only so much in a budget that’s 85% staffing and 100% people business,” Asmani said. “…It’s really not an apples to apples comparison.”

One objective of grant funding was to mitigate learning loss. That can’t be programmatic, “it actually has to be having professional people deliver that tier three, or tier two instruction,” Assistant Superintendent of Business and Operations Sandra Faioes said.

Social emotional health is also a large component, Estrella said.

“We didn’t get increases one year and we were in a predicament that we didn’t want to have will the staff lose their jobs during the midst of a pandemic,” she said. “We transferred our school counselors and social workers, social workers to the to the grants,” because that met State guidelines of supporting students and, “it was a way to ensure that these hardworking individuals that worked with us through the most challenging time on the pandemic will continue to be employed.”

NPS contracted services, Faioes said. As an example, contractors helped get students back to school.

Estrella said NPS partnered with the mid-Fairfield Child Guidance Center for one-time expenses. “We’re losing those at the end of this year, but problems have not concluded … it wasn’t realistic to continue to keep that in the 23-24 budget.”

There’s evidence that NPS has “accomplished a lot” even if the students are suffering in their test scores, BoE member Mary Ellen Flaherty-Ludwig said. “They have clearly seem to have done better with this kind of support.”

Again, they’re preliminary numbers. Budget requests have typically been presented in January.

“We’re reviewing these numbers, we’re having conversations with a city as our counterparts of this process. But this is kind of where we are now,” Asmani said.

Teachers union responds

“This is absolutely going to be a tough year. It’s pretty clear. We have enormous needs in the district. I want to assure you that the Norwalk Federation of Teachers are committed to being responsible members in this process,” Norwalk Federation of Teachers President Mary Yordon said.

NFT recently negotiated a new contract, which expires Aug. 31.

The union agreed to a “high deductible health care, savings account health insurance plan to try to prevent health insurance costs from being a driver in this budget,” Yordon said. “We’re hoping that the savings will be in the millions over the next couple of years, if we can successfully follow through on that agreement, and we hope that that won’t be lost in the increasing in this inflationary period.”

She also referred to “very sensitive salary increases in our contract.”

“The new salary does not make us the highest paid teachers in Connecticut, as sometimes is said,” Yordon continued. “We could be more competitive with many districts in many of our salary schedules. We have 22 steps to the maximum, whereas many of our neighboring communities have 16.”

Mid-career teachers can profit by moving to neighboring districts, “but we know that this is Norwalk, and there are lots of good reasons to work here, that may surpass the dollars,” she said.

The union collaborated with Estrella to add four early dismissal days, making time for extra professional learning time at no cost of the district, Yordon said. Teachers spend thousands of their own money on graduate courses and other learning opportunities, and “spend countless hours beyond the contract day,” in addition to buying supplies for students.

“We have provided a lot of flexibility to extend contractual workloads, to provide coverage and courses … and emergency sub coverages,” Yordon said. “… We believe that the discussion of student needs and this being a people business was spot on. Our kids need qualified staff, including para educators that we care very much about having in our class.”

2023-24 Budget BOE Workshop 12.13.22l-V2

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A page from the FY 22-23 Preliminary Budget Request prepared by the Norwalk Public Schools Finance Department.

18 comments

Sue Haynie December 16, 2022 at 6:15 am

A Norwalk PS 15% budget increase? You can tell this budget is put together by people who spend other peoples money.

Ridiculous and out of control. I don’t care what the reasons are, figure out how to do things better and cheaper.

Johnny cardamone December 16, 2022 at 8:22 am

Wow, I know they say if you think education is expensive try ignorance😩 how many students are we actually educating in Norwalk? What is the student teacher ratio and support staff? We All would like someone to give us $1 million to pay our bills and I know Covid has been difficult for a lot of reasons.🥵 at some point in the next year we may have to consider austerity measures. The pocketbook is not bottomless.🙈👍🏼👎🏽🙏🏼

Bryan Meek December 16, 2022 at 9:08 am

Well. Looks like the music is about to stop. A few weeks ago, we were told NPS would be requesting a “same services” budget.

This bad news is on top of a $7 million error in property tax assessment we learned about last week, $7 million reduction in arpa funds, and possibly (?) $4 million of pilot funding so now we’re now $50 MILLION IN THE HOLE before we’ve seen any of the other departments budgets.

On top of that we have or are about to bond out $300 million in projects with AAA bond rates pushing north of 5%, so debt service is going up $15 million a year possibly. The state reimbursed projects DO NOT reimburse the cost of capital to the city.

If the rest of the City Departments only come in at a 4% increase, we’re still looking at a potential $75 MILLION increase.

The issues are fairly clear. The city is spending money it can not afford on things it doesn’t need with very little results and it is not sustainable.

At least now I know why the Finance department won’t answer my emails on what the unaudited rainy day fund balance is because we are going to have to use most of it to avoid a double digit tax increase since no one is capable of tightening the belt. Those figures are due to the public by law by 12/31/2022. The city has known what the number is roughly for months, but that’s transparency for you.

Bryan Meek December 16, 2022 at 9:18 am

Here you can already see the absurd excuses about inflation.

In nearly the same breath it’s admitted that 80% of cost is payroll. Those contracts are at 3%, well below inflation.

Sorry you can’t have it both ways. Come up with something better please.

Perhaps start with a good explanation as to why grant money was used on full time payroll when this is a major, major no no.

John O'Neill December 16, 2022 at 10:04 am

Anyone who didn’t know this was coming 2 years ago was incredibly stupid. So kudos to Tom Hamilton for not being incredibly stupid. There are many things to digest from above:
1) I’d like to start at the end and my favorite Union Rep Mary Yordon. Has she ever given a thought to teacher “burnout” coming from the lack of discipline in classrooms. Maybe if she listened to more teachers and less Mayors she’d understand that. Think about having to deal with out-of-control classrooms and the indignities of being humiliated everyday by students. Who wouldn’t burn out?…So for Christmas, I’ll be sending Mary a hearing aid so she can HEAR what is truly crushing teachers.
2) Estrella is an incredibly slick customer — Kudos to her for that. I’d like to believe anything she’s saying but I’m afraid her track record with the truth is spotty….At Best..I believe the next chapter in this playbook is to threaten to cut all sports to rile the jocks in the community. (Include me in that group I’m sorry to say) Tradition, right !!
3) I would argue that these discussions should begin BEFORE election day. Not that it would matter in 137th district. You know the district that voted for the invisible man who wouldn’t know Hartford from Moscow. But a discussion on School Budget BEFORE and election would be educational for the electorate.
4) Flaherty-Ludwig means well — I disagree with her definition of success. I would think any pragmatic non-political person would. So the test scores tell us our students are failing, but don’t believe the test scores?? With that kind of attitude we might still think the Earth is Flat. I can assure you it’s not flat, but it seems to be upside down at the moment.
5) Where is Henry Dachowitz on this? He’s the only one on East Avenue I trust with my money
6) THIS is only the beginning of the “FUN” money running out from Washington DC. Those monies were designed for a two year period. Didn’t Harry Rilling and Jim Himes explain that CLEARLY to everyone ?? Based on above, maybe they forgot to do that. Kind of like forgetting to tell West Norwalk property owners he was fixing the Zoning Regulations in 2014.
7) Revaluation is coming — Maybe we should have a discussion on what that means to Residential Home-Owners AND Renters before anyone signs off on any increases above.
8) The next couple of years will be a nightmare for elected officials. I hope they enjoyed the warmth of all that free money. It’s beginning to come to an end.

Patrick Cooper December 16, 2022 at 10:12 am

Merry Christmas, Norwalk taxpayers.

Ah, the unusual “shell game” from our BOE – once again, undecipherable hog-wash. So let me get this straight – a 32 million dollar budget INCREASE (Y/Y), yet they provide –

– No enrollment figures, past or present
– No actual costs for this year versus budget
– No specific details on the labor contracts, or how they affect the numbers
– No specific details on the benefit costs, or how they affect the numbers

I love how the former chair runs to provide cover for the staff – saying “it’s less than inflation”. Yet – correct me if I’m wrong, but in the same breath we are told that 80% of this is “people”. So are you saying – we have a labor contract that has to mirror cost of living? Is that what we negotiated? Please clarify – exactly – how and on what – does “inflation” affect these numbers?

What about the well documented “open” positions for teachers and staff – numbered at between 80-100 positions? If they are not working – how are we paying them? Where is the savings?

No – what we get is – “well, if you subtract what we didn’t spend and add in what we wanted to spend, but couldn’t, and then you divide the missing state grants by the cost of the new Bob Duff high school, times the mill rate, and subtract the square root of “reasonable” by “what we can get away with” – you come to 250 million dollars”. Trust us.

No – I don’t trust this administration, I don’t trust the BOE, and I don’t trust this game they play every single year. And wait for it – the hand wringing coming from the parents – “It’s all about the kids”. Remember – 80% of this budget is actually for the adults.

Just one more reason for people to leave this city. What a mess 1-party rule begets.

Patrick Cooper December 16, 2022 at 1:44 pm

Ok – a little math here for the adults. In order to fund this requested increase of 32 million (and remember – this is just for the increase) – care to guess how much the grand list needs to grow at current mill rates in order to pay for this?

Try building 6 or more 8 story apartment buildings at 400 units each on the water in Vet’s Park. This year.

Here is the math: in order to generate 32 million in tax revenue, using the last mill rate in place for my district, Norwalk would need additional gross grand list value of 1.935 BILLION dollars. Yep. Assessed value taxed at 70% ($1,354,500,000) times a mill rate of .023621 = $31,994,645.

Also – by state law – that budget can never shrink. Insanity.

John O'Neill December 16, 2022 at 2:26 pm

One last Minor point — I’m sorry for commenting a second time here:
IF 85% of Budget is Staffing AND Teacher’s Contract is up for renewal next August AND Inflation is running at 7-8% wouldn’t it stand to reason that this budget underestimates the “Real” Cash needed by 6 to 7 percent. I realize we’re ONLY talking about another $ 12 Million or so but some might consider that a lot of money. (I can’t believe Teacher’s Union would accept much less than the rate of inflation on next contract, would you?)

Lisa Brinton December 16, 2022 at 2:34 pm

What’s been done to NPS borders on criminal, but folks keep voting for it… or in the case of the BOE – NOT with 13,000 + blanks for the 4 At-Large positions (presumably, Republicans refusing to vote Independent.) Single party rule prevails so no checks and balances. However, thank Bob for the shiny new high school and a mere $4M more in ECS – that takes 10 years to get. We’re the ONLY city in CT self funding a failing school system. We are chumps.

Benjamin Gates December 16, 2022 at 3:51 pm

This is exactly what you get when you have a superintendent who treats NPS like they are NYC schools. Huge budgets, almost no oversight in how money is spent, and poor performing schools. This ask is beyond absurd and she should be ashamed that she even put this forward.

I want to share with everyone a little piece of information I received last night from my daughters teacher while we were there for conferences. My wife and I asked if there were any scheduled field trips as we would like to volunteer. we were told there is no more field trips this year because the entire budget was used already for TWO field trips. I asked what the budget was and was told $1k per grade. How pathetic is this?

Estrella, who has utterly ruined performance and moral in our schools, has the chops to ask taxpayers to fund NPS to the tune of $250 million but yet kids cant go on field trips because there is no money. Where does all of this money get spent? The new “welcome center” that was a complete waste of money? Administration positions for her NYC friends? Lawsuits? Wake up Norwalk. Yes it hurts as a taxpayer but its the kids who suffer the most when the BOE and Superintendent utterly incompetent.

There needs to be a reality check here in terms of spending, more importantly what its spent on. At the very least Estrella needs a salary cut. Maybe that would even entice her to leave. if you cut her salary 5%, she still makes over $300k per year but there is enough money to double 4 elementary school field trip budgets, just to use that as an example.

Skip Hagerty December 17, 2022 at 5:58 am

Look on the bright side. Yes, NPS is a struggling with its budget but in a few years the beautiful new $400 million Bob Duff high school will be done. Teacher morale will improve as will test scores. People from throughout the Northeast will move to Norwalk for its school system. That said, Cranberry Park, Ludlow Park, and Vets Park should be developed to accommodate this influx on new residents.

Henry M. Dachowitz December 17, 2022 at 7:55 pm

Bryan Meek’s comments include a number of inaccuracies which may mislead readers.

(1) There has been no “$7 million error in property tax assessment” as Mr. Meek wrote. The Tax Collector’s November 2022 narrative report stated “the current tax levy [is] now down more than $8 million since the beginning of this fiscal year.”

This decline has three components: $4.4MM of Personal Property Taxes, $3.3MM of Real Estate Taxes, and $377,448 of Regular Automobile Taxes.

The values used for Personal Property Taxes is cost minus accumulated depreciation. Simply with the passage of time and no new acquisitions, these values go down every year. Additionally, due to COVID, supply chains were disrupted, businesses invested less in their assets in an uncertain climate, and some companies went out of business. These explain the $4.4MM decline in Personal Property Tax Levy.

Regarding Real Estate declines, please recall that after the Oct. 1, 2018 reassessment, the City was faced with over 400 cases of taxpayers challenging their new assessments. Many cases are not successful, but the others result in either court stipulations or a settlement between the parties. Some result in a direct payment by the City to the petitioner, but most result in prospective adjustments and the assessed amounts are reduced for future tax bills. This explains the $3.3MM decline in Real Estate Tax Levy.

This $8.1MM reduction is part of the normal course of business we anticipated as we planned our budget and worked through these cases.

(2) Mr. Meek’s implication that the “bad news” includes “$7MM reduction in arpa funds” is inaccurate. We planned (in May 2021) to use $7MM of ARPA funds in FY2022 to close the budget gap and reduce taxes levied on our taxpayers. Due to good management, the City did not need to use those funds in the budget – we earned a surplus without the use of these funds. These funds have been returned to our ARPA accounts and will be redirected to other City purposes.

(3) Another example Mr. Meek cites as “bad news” — “possibly (?) $4 million of pilot funding” — is wrong.

During FY2022, the state changed its formulas for PILOT funding (where each CT city receives Payments in Lieu of Taxes, usually from non-taxable entities such as hospitals and colleges). Our PILOT payment revenues would be increasing by $4MM. Since we learned this informa-tion after the budget was approved, this item became a positive variance to our budget (more revenues to be received than budgeted).

This change in PILOT payments is permanent so we expect to receive these revenues each year – as such this $4 million has been included in our FY2023 budget and will be included in next year’s FY2024 budget.

(4) I do not understand Mr. Meek’s math regarding our bonded debt.

After issuing $82MM of bonds in August 2022, the City’s total outstanding bonds are about $300MM. We have no plans to issue $300MM additional new debt in GO bonds – last year’s $82MM is the most the City has ever issued in one year.

Also, all of our bonded debt has been issued at fixed interest rates -– the rate is locked in at the time of issuance for the full term (often 30 years). As such the recent increases in interest rates do not affect our future costs or payments.

IF ALL of that outstanding debt had been issued at a 5% annual interest cost, then the TOTAL annual interest would be $300MM x 5% = $15MM. The vast majority of the debt was actually issued at interest rates between 2%-4% per annum.

Our current FY2023 annual debt service is about $35MM ($9.4MM in interest expense and $25.9MM in principal repayment) – it will go down annually to about $30MM in 2025 and 2026, and about $20MM by 2030).

So, Mr. Meek’s statement “debt service is going up $15 million a year possibly” makes no sense to me.

(5) “At least now I know why the Finance department won’t answer my emails on what the unaudited rainy day fund balance is because we are going to have to use most of it to avoid a double digit tax increase.”

I have answered each of Mr. Meek’s requests to me for information and clarification within 48 hours and usually within the same day. His statement is insulting, offensive and inaccurate.

Public corporations are required to publish their financial statements quarterly – their full year results are normally audited by an independent CPA firm; their quarterly numbers are prepared by management, usually not reviewed or checked by their auditors, and are issued as “Unaudited.”

The City’s annual financial numbers for our fiscal years (from July 1 of one year through June 30 of the subsequent year) are audited by independent CPA firms. The City of Norwalk, like most governments, non-profits, and privately held companies, does not issue interim unaudited financial statements.

Our audited financial statements for FY2022 will be finalized by December 31, 2022 and will be made publicly available at that time as we do every year.

For reference, the City’s unrestricted, uncommitted, and unassigned Government Funds Fund Balance (“Rainy Day Fund”) as listed on the Governmental Funds Balance Sheet was $72.3MM as of June 30, 2021. I do not expect the “Rainy Day Fund” balance to change materially as of June 30, 2022.

And I disagree with Mr. Meek’s assertion that “we are going to have to use most of [the Rainy Day Fund Balance] to avoid a double digit tax increase.”

John O'Neill December 17, 2022 at 11:04 pm

Henry: Thanks..The day you leave Norwalk is the day I leave Norwalk.
Please keep us updated on your thoughts on Board of Ed.. People are relying on you more than you may know

Bryan Meek December 18, 2022 at 12:05 pm

Well the glass is half full for some. Maybe we’ll luck out like Nassau County.

We collected $23 million in personal property taxes in fy21/22, then magically we forecasted $26 million would be collected in 22/23, when in fact it looks we are down a million. Thats a massive error and there are no excuses for forecasting a 10+% increase and it should have jumped out like a sore thumb in last year’s budget process. It shouldn’t have been a surprise a year later.

It puts into question many of the other assertions.

Audit 101. Tone at the top. Who are we paying to sign off on our grand list this year since we don’t have a certified Assessor? Who will be willing to sign off on bogus numbers like they did last year?

Municipal bond rates are hovering around 5% now and cores haven’t even been done on $300 million in new schools that the state doesn’t put the money up front for and reimbursement doesn’t cover the cost of capital.

Back to tone at the top. We’re allowed to know what our rainy day fund balance as of June 30th, 2021. That’s our government. Working for us. Wherever they might be working.

Bryan Meek December 18, 2022 at 12:18 pm

Back to same services school budget that needs $32 million or 15%, it will be interesting to see what will be cut. Were I them, I would point out how the City’s Finance department got an 18% increase in its budget last year. And for that we get to hear how much we have in the bank 18 months later and all the excuses about how this is the way its done.

Terrence McNicholas December 19, 2022 at 2:41 pm

Thank God we have Henry Dachowitz… but even he is not a miracle worker… can’t make chicken salad out of chicken s…

Bryan Meek December 19, 2022 at 11:03 pm

Yes Terrance. HD couldn’t save Nassau County and Norwalk doesn’t have enough land to develop to satiate the appetite for government services. This is the reality we won’t escape. Massive property tax increases are inevitable no matter who is CFO. Maybe not this year, but it’s just a matter of time on the current trend. In any case Finance should not be setting the bad example of handing out no bid contracts to political donors, blaming software for lack of controls, and allowing some department heads to telecommute. We have real property assessment issues unattended to and co-location is required to have teams working effectively. We’ve lost that seemingly permanently 3 years since the pandemic.

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