NORWALK, Conn. — Friction developed in the first discussion between Norwalk Public Schools representatives and Common Council members wrestling with the district’s requested 12.7% operating budget increase, a hoped-for $27.6 million bump up from the 2022-23 budget.
Council members took exception to the phrase “zero funded” when in fact, it was a zero percent increase to the schools budget in 2020-21, not zero in funds. In addition, multiple Council members stressed “needs over wants” and said NPS is just one department in the City and they are concerned about the impact the increase would have on the families that send their children to Norwalk Public Schools.
During previous Board of Education meetings, NPS Chief Financial Officer Lunda Asmani and Norwalk Superintendent of Schools Alexandra Estrella painstakingly detailed the complicated factors supporting the requested increase, but at Thursday’s BoE/Common Council Finance Committee time-strapped joint session, Asmani spent only about 10 minutes explaining the topic. He invited Council members to examine the voluminous budget document available online.
NPS would need an 8.5% increase this year just to maintain its normal trajectory, an increase made more eye-catching due to the use of federal COVID-19 relief dollars to lessen the budget impact on taxpayers, Asmani said, noting that special education costs are mandated and, “Those expenses have not remained flat, they have increased, the number of students needing outside district services has increased, the cost of providing those services has also increased.”
The value of the grants NPS receives to support special education has decreased, while this year’s SpEd costs are $6.3 million higher, he said. The district budgeted $9 million but will probably spend $10.2 million to cover needs.
Asmani also presented a chart comparing the general fund balance, or “Rainy Day Fund,” to Board of Education year-end surpluses, calling the City’s money “rollover funds.”
Council member David Heuvelman (D-District A) blasted the chart.
“It’s just not an apples-to-apples comparison. And I feel that it’s a disingenuous thing in a public meeting to try to project that idea,” Heuvelman said. Statutorily, the BoE can rollover 2% of its surplus into the next year while the City has siloed departments and “those city agencies are handled in a different way.”
“What we’re not speaking to is the youth that we are serving,” Board of Education Vice Chairman Godfrey Azima said. He’s “probably most concerned” about students’ mental health in the pandemic’s wake.
“Community issues are not siloed in the community, we are one. They play out in our experience all in the school buildings,” Azima said. “…The teachers are experiencing it and it makes it harder for us to do more with less. It shouldn’t be an apples-to-apples discussion, it should be a very detailed discussion around what it is that we’re experiencing that isn’t represented in a clean budget discussion.”
Council member Jenn McMurrer (D-District C), who ran for office in 2021 after objecting to Council member John Kydes (D-District C) leading a cut to school funding, said she agreed with much of Asmani’s comments. But she said that two NPS initiatives which were funded without City approval (the South Norwalk incubator school paid for with 2021-22 rollover money and the Welcome Center financed by COVID-19 relief funds) were “wonderful ideas,” but are “wants, not needs” now included in the operating budget request. She asked how much both of those projects are costing.
McMurrer wanted to know what contingency plan the district has if it doesn’t get its requested 12.7% operating budget increase because, “I’ve heard rumors that there’s gonna be massive layoffs. I don’t want that to happen…. unfortunately, we can’t write a blank check to every single department in the city.”
Asmani didn’t address a possible contingency plan or the cost of the two new programs. He pointed to the “zero funding” as having an impact and referred to his predecessor’s warnings on the topic, two years in a row.
“The fact that we are where we are now should not come as a surprise to anyone, right? Because we knew when you do 0%, it’s going to catch up to you because one-year deal, two-year deal, it’s going to catch up,” Asmani said.
McMurrer pressed for an explanation, asking why NPS is seeking a 12.7% increase when an 8.5% increase would compensate for the zero increase in 2020-21.
Asmani said the special education increases are not normal expenses. “Then, in all honesty,” NPS did enhance some positions; improvement teachers were added with the relief funds, and the budget is transparent about that, he said.
Council member Diana Révolus (D-District B), mother to a baby and a grown daughter, said, “I think we’re forgetting about the families who have to live and pay for these situations.”
While “it is a great and noble thing to speak on how we need to do for our children,” there are parents who “are wanting to pull out their children from this, go to into home education, or families who want to own homes and want to leave Norwalk,” Révolus said. “…I give all the support to the devout call and talk of our children. But those children come with families and I am 100% behind what councilmember McMurrer said about our wants and our needs.”
Council members have been warned about a coming recession since the budget season NPS got “zero funded,” she said. The requested increase “may be too high,” given the need to be “fair for not only our children, but the family they go home to.”
Estrella said NPS is focused on needs and were originally working from an 18% possible increase. Programs, especially those provided by outside services, were cut, even if school administrators feel they’re needed.
“There were sacrifices made that in the long term might not be always in the best interest of students, particularly because we want to make sure that their social emotional needs are being met,” Estrella said. “… People tend to forget that the pandemic created an array of needs that might have not been there prior to.”
BoE member Kara Nelson Baekey and Azima asked the Council members to watch their recent workshop session focused on mental health survey results.
Thursday’s joint session began with Norwalk Chief Financial Officer Henry Dachowitz outlining the “challenging economic outlook,” given “stagflation, high inflation plus economic recession.” Interest rates have gone up, the housing market is starting to falter and national firms have announced layoffs.
City departments have been asked to restrain increases to a maximum 3.5%, but some fixed cost budget items are going up 7 to 12%, he said. The City hopes to use American Rescue Plan Act (ARPA) for some things and plans to draw down from the “Rainy Day Fund.”
“There have been migration of taxpayers from Connecticut to low tax states. It’s been offset by some of the migration during COVID from Boston and New York. And at this point, we cannot expect federal state assistance such as the funding we received in the recent past for COVID and the ARPA funding,” he said.
Nelson Baekey asked how low the City’s Rainy Day Fund has been while still maintaining the City’s Triple A bond rating.
It was about $74 million at the end of the last fiscal year and yes, it’s gone up every year Mayor Harry Rilling has been in office, Dachowitz replied. The northeast has different Rainy Day policies than the rest of the country, where the fund balance is commonly equal to 50-75% of the operating budget, and Norwalk’s policy is to ideally maintain a fund balance equal to 7 to 15% of the operating expenses.
It now represents about 18-19% of the budget, Dachowitz said. While he’s recommending a draw down, the challenge is “this coming summer, when we borrow more money, we already have about $350 million of bonds outstanding. Two years ago, our financial advisor calculated that if we have $400 million or more of debt, for our size city, we run the risk of losing our Triple A bond rating.”
He said, “The second major metric is the ratio of our debt service costs. That’s the cost in our annual operating budget of repaying principal and paying interest on our debt. The metric the rating agencies look at for triple A is 10% or lower. We are dangerously close to that 10% already.”
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