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Norwalk school board ponders unexpected ‘bill’ from city

Board of Education Finance Committee Chairman Mike Barbis discusses a conundrum regarding the proposed 2012-2013 Norwalk school budget Thursday night.

By Nancy Guenther Chapman

NORWALK, Conn. – A “guesstimate” regarding a far-ranging change in the way Norwalk pays for certain school employees’ pension funds prompted Board of Education members to postpone definitive action Thursday on the budget request for the next school year.

The board’s finance committee was expected to recommend the entire board approve Interim Superintendent Tony Daddona’s nearly $165 million budget request at a Jan. 9 special meeting, but an addition of $60,000 announced Wednesday prompted the board to look into whether it really needed to make the payment.

BOE member Stephen Colarossi said he would send an email to Attorney Tom Mooney asking, “What does state law dictate is our responsibility as a school department?”

Daddona said he had been informed by a Dec. 31 email that the city has changed its pension plan to 401a, a defined contribution plan for employees hired on or after July 1, 2012. Non-certified employees must make a 5 percent contribution to the plan and the BOE must match it.

“The board has never paid into the pension contributions prior to this year,” he said.

The $60,000 is a guesstimate, he said, as new employees may be hired over the course of the year as people retire. In addition, costs will escalate over time. “Over the course of several years, it’s almost exponential growth,” he said.

Members of the three-person committee thought that, by recommending approving the budget, they’d be assenting to the change, and any other changes to come.

“There’s a bigger issue here,” Daddona said. “Today it’s the retirement, the 401a. Then it’s the workers comp. Then it could be a fee for using MUNIS (an accounting system) … I think there needs to be a conversation as to what is the process whereby which these fees are transferred, and it’s just not ‘you have to pay.’”

Finance Committee Chairman Mike Barbis said, “These employees are our employees, therefore their pension obligations are our responsibility that, until now, the city has been handling. The city has decided they don’t want to be responsible for that anymore. Legally, they are our employees, so I don’t see what grounds we have to say we don’t want to handle it.”

The decisions are being made by a city pension board, on which the BOE has no representatives, Chief Financial Officer Elio Longo said.

Board member Rosa Murray objected, saying, “We need to know when we lost the authority to make these decisions,” she said. “It seems the board of ed has no say here. … We’re going down a slippery slope here and it seems we have no control.”

Norwalk Federation of Teachers President Bruce Mellion, who sat in on the discussion, pointed out that the city’s personnel department has a full-time employee to deal with pension issues, and there is a person who takes care of worker’s compensation claims, full time. The city is shifting responsibility to the board, he said, and not providing personnel to deal with it.

“We are getting more and more bills, so to speak, from the city,” West Rocks Principal Lynne Moore said. “To send out an email on Dec. 31, to me that says ‘We don’t respect you, we have the power to do whatever we’re going to do.’ At some point there will be a demise of this school district because you will be so busy paying bills that you’re not going to be able to rebuild, as Tony has been using that word.”

Barbis said it’s currently “a one-way conversation.”

“The chairman of the board has got to have a conversation with the mayor,” he said.

He was skeptical that the committee would be able to give the full board the information the committee is looking for from its lawyer.

“My guess is we’re not going to get a definitive answer, we’re going to be right where we are tonight,” he said.

The board must submit a budget request to the city by Jan. 11.

Comments

9 responses to “Norwalk school board ponders unexpected ‘bill’ from city”

  1. Bruce Kimmel

    Interesting story, and interesting points. However, last year when the Common Council approved the new pension plan and procedures, the NFT president and possibly other BOE officials were at the meeting. I can understand something slipping through the cracks, especially if it is new. But I am a little concerned that it appears members of the BOE say they had not heard about the new procedures. If I remember correctly, every bargaining unit in the city was involved in the discussions.

  2. Steve Colarossi

    The distinction is how the new plan will be managed and whether on-going liabilities and management expenses will be attributed to the Board of Education budget.

    1. Bruce Kimmel

      Steve, I agree. But wasn’t the plan adopted early last summer, after months of discussion? Fortunately, there is plenty of time to discuss the issues you and other BOE members have raised.

  3. Steve Colarossi

    The Norwalk Pension Board does not include a single representative who is appointed by the Board of Education. Representatives of non-certified bargaining units represent the interests of their members, but not of their employers. Fortunately, as you referenced, there is time before the budgets are finalized to discuss the cost-sharing, risk apportionment and management issues which a change would entail.

  4. LWitherspoon

    Glad to see that the City of Norwalk is changing from a defined benefit plan to a defined contribution plan. Most private industry made the switch to defined contribution plans years ago. Too many municipalities were slow to make the switch, continued to offer generous pensions, and in the process bankrupted themselves. From what I understand, this change to a defined benefit plan only affects new employees. What are Norwalk’s pension obligations for existing employees? Are those obligations a ticking time bomb?

    1. LWitherspoon

      What I meant to write was that this change to a defined contribution plan only affects new employees.

  5. oldtimer

    I am not sure I understand the difference between the two types of plans. The City and the Police union entered into an agreement that required the cops to put in a lot more than %5, with the City agreeing to match that amount, many years ago. The City failed to match, dollar for dollar, but all contractual benefits are being paid. The pension fund growth has not kept pace with the unfunded liabilities growth, but, in recent years, the City has been putting money into the fund, trying to catch up for years of neglect.
    The apparent difference is, up to now, the teachers have not had to put anything into a pension fund, and now they have to. If the City had matched the police contributions exactly, from day one, there would probably, by now, be a big surplus in that pension fund.

    1. Lisa Thomson

      Old timer- this story is not about the teachers, but the non-certified personnel in the class rooms and schools. The fact that all the contracts and benefit/pension practices are massively different and no doubt inefficient from a city and taxpayer perspective is another matter altogether.

      I think it is correct to understand all true costs on the BOE side of the city ledger, but to suddenly dump in the BOEs lap, if funds have not been transferred, will simply come out of the reading, writing and arithemetic budgets. I hope that is not the case. In any event, the more taxpayers understand true costs of all departments and employees, regardless of BOE or City the better it ‘should’ be managed.

      1. oldtimer

        If it is not about teachers, why does Kimmell think it is important that the NFT president was at the council meeting when the change was approved ?

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