The Board of Education and Norwalk Public Schools would like to address incorrect information that was presented at Thursday’s special meeting of the Common Council Finance Committee, following the public hearing.
On health insurance estimated costs: There was no budgeting error, padding or incompetence in the forecast of health insurance benefit costs for 2021-22. From the early stages of the budget cycle through to the most recent public meetings, we emphasized that the State of Connecticut had not yet released any information on next year’s rates under the State health plan that covers our employees.
It was repeatedly specified that we were relying upon the recommendations of the District’s health insurance consultant, who also serves as the health insurance consultant to the City of Norwalk and the consultant to the State 2.0 Partnership Plan. Since the State had not yet started working on next year’s rates, our health insurance consultant recommended the 11.5% increase, based on an overall health trend that she projected at 8.0%, plus a 3.5% addition for the State’s move to phase-in a regional rate structure that takes our Fairfield County location into account.
We were clear with the City’s Finance Committee in January that more accurate figures would be available by the time the Council needed to set the budget cap. We made and kept a commitment to relay any updates to the estimate as soon as any new information was available, which we did. The result was the Board’s vote on February 16 to reduce the recommended budget request to 4.6%, based on this new information.
End of Year Surplus: Through very careful management, Norwalk Public Schools spends 98.5% to 99.5% each year of our budgeted appropriation. That low level of budget surplus actually represents highly responsible financial management. We are subject to extreme penalty if we overspend our budget, so we are very, very careful not to do so. That can be a huge challenge at times, because unlike the City, Norwalk Public Schools does not have a contingency or fund balance to draw down for an emergency. In addition, our typical surplus of between .8% and 2.0% is considerably less than the annual surplus of 1.3% to 3.5% that has been routinely returned by the City in recent years.