NORWALK, Conn. – The Norwalk Board of Education struck back Wednesday with a detailed rebuttal to the insinuations made by Norwalk’s Chief Financial Officer early this week as he presented a budget recommendation with school district funding well below what the BoE asked for.
If the recommendation is approved, Board of Education members will face “tough decisions,” said Norwalk Superintendent of Schools Alexandra Estrella and Norwalk Public Schools Chief Financial Officer Lunda Asmani. BoE members advocated drawing down “Rainy Day Funds” for this year’s budget.
CFO Henry Dachowitz’ plan to give the school district a 3.75% increase doesn’t even cover contractual obligations to employees, which are a 4.5% increase, they said. The plan to “incubate” a South Norwalk school will be scrapped under the CFO’s plan and efforts to avoid the impact of federal dollars drying up will be out the door.
Estrella said that part of the reason the Board of Education asked for a 9.1% increase “to mitigate what happened last year” because “we don’t wind up in a situation where we would have to engage in massive layoffs at all levels of the organization.”
The Common Council “flat-funded” the school district last year, keeping the allocation the same as it was for 2021-22. This forced NPS to use the federal dollars to “supplant” the local budget, Asmani and Estrella said, at the Board of Education Finance Committee meeting.
The federal dollars were meant to be used in a certain way and that happened on the City side; the American Rescue Plan Act (ARPA) money was intended to stimulate the economy and the one-time projects the City has lined up will do that, Asmani said. But the federal ESSER (Elementary and Secondary School Emergency Relief Fund) Money was intended to enhance school systems and offer students supports as they struggle with the effects of remote learning, and that didn’t happen, Asmani said.
“There’s things that we could not do, because we were using those dollars to fund the local budget,” Asmani said. “I reviewed the Board of Estimate meeting last year, when this decision was made, there were these discussions that you know, ‘this is a one time fix, we’re going to have to address it.’ Obviously, if it’s not addressed this year, this is going to be something that’s going to come up next year, because the funding does go away. But those programs are there because they serve our students.”
He said, “This is unique to Norwalk, because most of the communities that we’ve been in touch with have not had to deal with this type of challenge.”
‘It’s not gamesmanship’
Dachowitz attacked NPS for a $4 million rollover of a surplus in 2020-21; Asmani said Wednesday that the surplus was due to equipment being ordered but not delivered during the fiscal year. That accounted for most of the rollover and the City had a similar situation, both due to supply chain issues. It was all discussed during public meetings.
“There wasn’t any shady math or pre-planned underspending so that we would have money left over,” Asmani said. “These were indeed bought during the year but just couldn’t be delivered. And the same story happened not just unique to us other communities.”
The City’s rollover was $1.8 million, he said.
“It’s not gamesmanship, whether the City does it or the ‘Board of Ed’ does it, it’s actually good stewardship,” Asmani said. “Because these funds are appropriated for use, you have them available, you’ve identified a purpose for them. And rather than going back the following year, and requesting a new appropriation … (We say) ‘let’s just use this appropriated money. We’ve already taxed for it, it’s there.’”
“It is not unheard of that you have this surplus at the end of the year, what we don’t want to have is a deficit, right? Because then that will be considered mismanagement,” Estrella said.
Connecticut State Statute allows for a rollover of up to 2% of its budget, but it’s not automatic, Asmani said. The school district makes its case to the Board of Estimate and Taxation and, “It is a decision that’s made by the City as a funding body.”
Wednesday at the Board of Education Finance Committee meeting.
‘Apples to oranges’
“Mr. Dachowitz spent a lot of time slicing and dissecting the Board of Ed budget, which was nice, and it was nice that we’re getting that attention,” Asmani said. “But I think it’s also important to look back at how do these budgets really compare on an equity level. And that is looking at this on an apples-to-apples comparison, in my previous role with another community.”
Dachowitz presented a list of City-side increases in alphabetical order; Asmani listed them in order of their proposed increase. He separated City departments from non-departmental expenses and said Dachowitz recommended a 4.9% increase for the City’s increase while suggesting that 3.7% was acceptable for BoE operations.
“The City computation is blended, it combines operational expenses and non-operational expenses,” Asmani said. “I believe that is inaccurate…in other communities, these non-departmental items would not even be part of the general fund. Many communities have a separate debt service fund, communities have separate employee benefits fund, separate pension fund and the contingency fund. So they’re not even part of the operational budget.”
BoE member Kara Nelson Baekey asked about the eye-catching 15.9% increase for the City Finance Department, at the top of Asmani’s list.
They’re legitimate expenses, Asmani said.
“I’m not saying that the needs within the city side are unnecessary. But you know, there are also needs on the Board of Ed side as well, that are equally valuable and important,” Asmani said.
‘It’s not largess’
On Monday and Tuesday, Dachowitz painstakingly explained the grant funding NPS receives. All told, in FY21 NPS spent nearly $95 million in excess of the local budget, he said.
“We don’t present pieces of the budget and somewhat hide the other pieces,” Asmani said Wednesday. “… When we present our budget in our detailed budget book, we actually provide individual breakdown of each one of these (grants). And it is important to point out to you that this is what it costs to educate our children.”
Board of Education budget discussions have involved a review of grant funding for at least 11 years.
“The fact that we receive these grants is a good thing. And not not any way supplanting or excess or largess, on our budget by using funds over and above what we get from the local dollars,” Asmani said. “…. It’s really not extra. These are direct programs that directly impact our children.”
“People don’t realize that we have mandated services that those grants are set for us to fulfill,” Estrella said. “In many cases, although we’re getting those grant dollars, we still have to use local dollars to fulfill those needs. … We are constantly looking for external resources and other grants to support the budget.”
Warnings
“We made great strides last year to enhance our athletic programs. And now our athletic programs are at risk of being lost as a result of how we have to rethink our budgeting structure,” Estrella said.
If Dachowitz’ recommendation is approved, NPS will have to reconsider the partnerships it was seeking for social and emotion learning (SEL) supports, she said. “We won’t be able to do them the way we were hoping for in the upcoming academic school year.”
Interventions are only scraping the surface of what’s needed, she said. schools like Jefferson and Kendall need more specialists and “we cannot afford to provide that.”
Rainy day
Asmani reviewed the way rating agencies issue bond ratings and gave a history of the City’s “Rainy Day Fund,” or general fund balance.
“When the city had $47.3 million fund balance, it was still a Triple A community,” Asmani said. “It did not lose its Triple A status because it had $47 million and … to say that a one-time drawdown in fund balance would severely impact your credit, I think that that’s inaccurate.
Dachowitz’s recommendation, made in collaboration with Mayor Harry Rilling, includes a $4 million drawdown.
A review of Comprehensive Annual Financial Reports (CAFRs) available online shows this Rainy Day Fund history:
- 2021: $72 million, 17.3% of total revenues
- 2020: $58.4 million, 14.8% of total revenues
- 2019: $69.7 million, 18.3% of total revenues
- 2018: $57.7 million, 14.7% of total revenues
- 2017: $51.1 nillion, 13.6% of total revenues
- 2016: $47.4 million, 13.3% of total revenues
Board of Education Chairman Colin Hosten said that the current balance of $72 million “in a very simplistic way, represents a $72 million in excess tax receipts.”
“I think some of this money should, you know, I think be reinvested into our taxpayers, through our public institutions like our public schools,” he said.
Nelson Baekey agreed.
“Reinvesting in our community, and in particular, our schools, I think is critical when it comes to affecting other aspects of the value of our city, such as real estate,” she said. “My mom was a real estate agent in Greenwich for over 20 years. She always said that, you know, most of her clients were coming to that city or that town for the schools and for the value of those schools. I think that that’s something that, you know, we can’t lose sight of.”
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