Norwalk council sets budget cap at $311.4 million

NORWALK, Conn. – A spending cap just slightly higher than the one recommended by Norwalk Finance Director Thomas Hamilton for the city’s 2013-2014 budget was given a nod of approval Tuesday night by the Common Council, with hopeful promises made that the Board of Education’s budget will be fully funded, appearances to the contrary.

The $311,398,238 spending cap is $80,968 higher than the one Hamilton recommended, with Mayor Richard Moccia’s approval. The mill rate increase is expected to be 3.97 percent, up from 3.94 percent. The median tax increase for an average family in the Fourth Taxing District would be $254.83, as opposed to the $252.91 that was recommended.

“I’m confident that come spring we will be very close to fully funding the board of education budget,” said Councilman Bruce Kimmel (D-District D), who made the motion to amend the resolution to the higher figure. “We’re closer than we’ve been in years.”

The difference between what the city expects to give the board of ed and what the board of ed says it needs for it’s operating budget is probably about $500,000, Kimmel said.

“The Board of Ed is still examining its accounts, looking for savings,” he said. “The BET (Board of Estimate and Taxation) will look for additional funds in all other city departments. There will be some amount of state aid for education. Although we don’t know what Commissioner (Stefan) Pryor’s decision will be on how it should be spent, everyone is pretty sure Common Core (State Standards) will be acceptable.”

The vote for the cap was 9-5, with council members Warren Peña (D-At Large), John Igneri (D-District E), Anna Duleep (D-At Large), David Watts (D-District A) and Nicholas Kydes (R-District C) voting against it. Council members Michelle Maggio (R-District C), Fred Bondi (R-At Large), Sarah Mann (R-At Large), Matt Miklave (D-District A), Michael Geake (U-District B), Carvin Hilliard (D-District B), Jerry Petrini (R-District D), David McCarthy (R-District E) and Kimmel voted in favor. Councilman Doug Hempstead (R-At Large) was absent; Moccia said Hempstead’s wife had a health issue and Hempstead was with her.

There was little debate.

Kydes said he wanted to offer his own amendment, to cut the cap by $4 million. “I think every household in the country, in this city, people are scrounging to save every penny, spend every penny wisely, yet here we are talking about increasing the burden on the taxpayers,” he said. “I cannot support such a resolution.”

Moccia challenged Kydes to show where $4 million in cuts to the budget could be made; Kydes said he had done an analysis and would be happy to do that. “I do have what I believe are fair solutions,” he said.

Moccia said the problem is the “monumental cuts” Norwalk is expecting in Gov. Dannel Malloy’s proposed biennial budget. He said that would be about $1.3 million and repeated his previous statements about the ECS funding, that they’re are too many strings attached to the $2 million that has been promised.

“The problem is not in this hall,” he said. “The problem is in Hartford.”

The budget includes an estimated $16,518,271 in intergovernmental grants and a draw down from the fund balance of about $1.7 million.

Miklave questioned Hamilton about that, and it’s potential effect on the city’s Aaa bond rating.

“Bond ratings are not an exact science,” Hamilton said. “We won’t know until we go to the rating agencies later this year what their reaction is, but we believe we will be successful in sustaining the city’s current bond rating, but we also believe this will place some downward pressure on the bond rating.”

It is “financially prudent and appropriate” to make the draw down, Hamilton said, because of extraordinary one-time expenses the city is confronted with in 2013-2014: a $2.5 million increase in pension contributions and the repayment of the deficit in the insurance fund. Hamilton said the pension contributions will also go up in 2014-2015, but not as much. They are expected to plateau after that.

It was up to Kimmel to explain the rationale behind the budget cap to the people still present at the meeting at about 10:25 p.m.

“The last four years the property taxes have averaged 1.97 percent,” he began. “I believe we’ve been able to maintain a relatively healthy balance, considering the economy, between the needs of the board of education and various city departments and the needs of taxpayers across the city.” Then came the explanation: “This year is a bit different. We’re kind of up against the wall. The grand list and revenues are relatively flat although in recent times there’s been some upticks. Benefits, which we must fund, are increasing between 15 and 20 percent yearly.”

The bond rating issue gives the city little flexibility, he said.

“Last but not least, questions around state aid and what we will receive are up in the air,” he said. “It’s important to point out, even if all discretionary expenses were frozen, nothing in the operating budget for Common Core, nothing for (school) library aides, nothing for (three) new police officers, we would still be pushing a 3.5 percent increase in the mill rate. That’s how tight things are, how little flexibility we have. Nonetheless, we do believe we have to make certain expenditures, which are important.”

There are still two months left in the budget process. If necessary, the council could change the cap in April, with a two-thirds vote.