NORWALK, Conn. – From dire warnings for Planning Commissioners to optimistic commentary at the Democratic Town Committee meeting, Norwalk leaders have conveyed opinions this week on the weighty budgetary decisions being made without a firm sense of what tomorrow will bring.
Some key thoughts:
- No to a welcome center – at Briggs anyway
- New Norwalk High School is the motivation to delay other projects
- Lamont said to support Open Choice for Norwalk/Danbury schools
- Dropping to Double A not considered an option
The Common Council Finance Committee is holding a public hearing tonight, Thursday Feb. 18, on the operating budget ahead of the Council setting a cap next week. Weighing in might be a challenge, given that an official budget book is not online. Activist Diane Lauricella noted this fact in an early morning email asking the Committee to postpone its hearing.
Briggs Welcome Center?
It would cost $7 million to turn the dilapidated Briggs High School building into a centralized location for many Norwalk Public Schools services, a welcome center that could also be used by various community groups, Norwalk Superintendent of Schools Alexandra Estrella has said.
That capital budget request does not have Mayor Harry Rilling’s support.
“We don’t think that that’s a great idea right now,” Rilling said Monday to the Democratic Town Committee. “It’s very, very costly.”
Instead, the administration is working with the Human Services Council, seeing if it’s possible to lease space at 1 Park St., where the Council is located, he said. There might even be an option to buy the building for $3 million, but “that’s a little bit expensive, too, when we think about all the other capital projects we have.”
Rilling mentioned new school projects, Cranbury Elementary and the imminent Jefferson Elementary renovation, and “the most important one for all of us,” a South Norwalk neighborhood school.
It might be time to sell the Briggs building and “use that money for another purpose,” Rilling said.
More tough talk
“I would not say ‘this is the tough year, tighten the belt. Next year is better.’ I want to say, this is the first year of a whole new era where we have to be very, very tight on the capital as well as the operating budget. I just don’t see any other way,” Norwalk Chief Financial Officer Henry Dachowitz said Tuesday to the Planning Commission.
Dachowitz gave a brief presentation on his capital budget recommendation, repeating and expounding upon his insistence that Norwalk needs to review its approved capital projects and slow down the spending to protect the City’s Triple A bond rating.
“The problem is, I just don’t see the Grand List going up as fast as our expenses are going up. And we also have to do a catch up on the capital side. So I just see tremendous pressure on the operating budget for the foreseeable year,” he said.
- “Normally the rating agencies do not want to see more than 10% of a budget go into debt service. We are already in excess of 9%. The challenge is that we already have $280 million of debt outstanding. As of, currently, so we only have 120 million of borrowing capacity before we lose our triple A bond rating.”
- “I want to start only approving budgets are projects that are going to be done immediately. Okay, we can’t borrow money, we can’t approve capital projects that we’re not going to do for three years. We just can’t afford to, I need to have more accurate records.”
- “I’m borrowing money at less than 2%. But our debt service went up by over 10%. We, it’s just, it’s a snowball. It’s an avalanche coming down the hill. And it’s happening on all aspects of our city.”
Dachowitz said the debt service in the 2020-21 budget is $32.4 million and his recommended budget for 2021-22 carries a debt service of $36.9 million.
The borrowing is largely for new school buildings. The Ponus Ridge Middle School expansion is complete and the Jefferson Elementary renovation is expected to begin this year. Projects that have been approved but not yet bonded for include the new school behind the Nathaniel Ely center, which is stalled, Cranbury Elementary and a new Norwalk High School.
“The next two to three years are very tight and we would lose our triple A rating. If I funded everything” that’s been approved, Dachowitz said.
Commissioners seek answers
Planning Commissioner Tamsen Langalis suggested that many of this year’s capital requests, including those made by Norwalk Public Schools, could be funded if the new Norwalk High School project did not go forward.
“I will tell you we looked at that. And right now, we’ve scheduled it based on discussion both with the Board of Ed, (Building and Facilities Manager) Alan Lo and (new school construction manager) Jim Giuliano,” Dachowitz replied.
The “big construction dollars are three, four or five six years out,” he said.
Planning Commissioner John Lesko asked if projects could be halted or shelved, given the changing times.
Dachowitz has recommended this.
“There is a list. I’ve been working with both the City departments and the Board of Ed and asking them to see what they would do with the deferrals. And I think at the appropriate time will disclose them,” Dachowitz said.
But the reality is it’s not the coming projects it’s the ones that have been approved, “active and open, not yet closed. And the list is hundreds, hundreds, hundreds,” Dachowitz said.
Planning Commissioner Brian Baxendale asked Dachowitz if his restriction on keeping capital budget spending to $20 million a year for the next few years could be eased, with another $10 million added. He sought a “cost to the city” if the Triple A rating dropped to Double A.
“The credit differential margin between triple A and double A are historically small,” Dachowitz said. “… But the point is going through a double A is a very long-term strategy and right now we have absolutely no consideration of using that as a financial strategy.”
Planning Commission Chairwoman Frances DiMeglio queried Dachowitz on his “zero” recommended for the Norwalk Public Library, as an example of what’s fair. The library’s $113,000 request is small to the point of it being comparable to a rounding error on the big projects, she said.
“We looked at it project by project. And we just felt that based on the request, we could do without it this year,” Dachowitz said.
The library has “a specific request for a laptop dispenser,” Dachowitz said. “It sounds delightful. I think you could load six laptops in and they recharge automatically and it makes it convenient. The point is, we’re in COVID, budgets are tight. And we can live without it.”
The library’s plan to refresh its auditorium?
“For $75,000, I think we could do without it this year,” Dachowitz said. “It’s just not critical enough.”
“I mean, the reality is, somebody has to start saying ‘no, we can’t do it, live without it. How important is that?” Dachowitz said.
Rilling, speaking Monday to the DTC, “I know some of the things he put in there or didn’t put in there, have created a lot of problems or a lot of questions. But that’s just the beginning.”
After the Planning Commission’s recommendation, “I make the final changes to the capital budget, and then we send it to the Common Council,” he said. “The Common Council can shift money from one project to another. They can’t add any projects, they can’t take any projects out. All they can do is kind of shift money from one project to another.”
Help is on the way
There’s more COVID-19 relief coming, Planning Commissioner Mike Mushak said. While the amount isn’t known yet, he asked if the City could count on it while formulating its budget.
“I know that’s pie in the sky but – and I’m thinking one thing specifically, in that school ventilation is something that is definitely an issue. And suddenly, you know, we’ll be looking at renovating our HVAC systems in our schools with COVID relief money, perhaps.”
Or maybe the entire Board of Education budget could be taken care of, he said, asking, “Can we feel a little more comfortable with playing with your numbers?”
The Board of Education will be getting about $20 from coronavirus relief funding, Dachowitz said.
“I don’t know that they’ve included that in their budgets. They don’t include the monies they get from grants in their budgets. So I have a hard problem when I look at the Board of Ed, because we have to list our pension contributions, they don’t, because the state pays it,” Dachowitz said. “They get these funds from the state that they don’t account for, and that’s extra spending.”
The $20 million is “just this year, and then add to that the Biden proposed $1.9 trillion aid package, where there will be, I believe, 10s of millions of dollars, which will come directly to the Board of Ed, and millions of dollars which will come to the city,” Dachowitz said.
“I have to budget for what’s known, I have to be conservative,” he said. “If the money comes in, then that would allow us to increase reserves, pay down pension and OPEB liabilities, or use some of that fund, which would come in as a surplus and use it next year to give relief to the budget somewhere. I do not know at all What the board intends to do with that money whenever I asked about it, they state that they those funds come with restrictions. They can only be used on certain specified items.”
Finally, he said, “I think it’s a windfall, it’s good and positive for the city on both sides. But I don’t think it would be prudent to budget on the assumption that that’s coming.”
This topic came up at Monday’s DTC meeting.
“The Governor is anticipating a lot of money coming from Washington, from a standpoint of our budget,” State Senate Majority Leader Bob Duff (D-25) said, predicting $400 million for education in the state. He wasn’t sure how it will be distributed.
“We’re cautiously optimistic,” Rilling said.
“These funds are very closely restricted in how they can be used,” Board of Education Chairman Colin Hosten said. “We can’t just add them to our operating budget and say great we’ve an extra $9 million. But clearly, it’s helpful.”
Duff has co-introduced a bill that would expand the Open Choice Program to include Danbury and Norwalk, and provide funding for it. The Open Choice Program currently serves Hartford, Bridgeport and New Haven and their surrounding districts. It’s “intended to improve academic achievement; reduce racial, ethnic and economic isolation; and provide a choice of educational programs for public school students,” the State’s website says.
Lamont has that in his budget, Duff told the DTC, calling that “exciting” as “kids from Norwalk and Danbury can go to suburban schools and the state pays a portion of that. It’s totally voluntary… It’s great to have the Governor support it.”