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Paying for Norwalk High School and South Norwalk School: Finance Committee adjusts funding for projects

Illustration of new Norwalk High School designed by Kaestle Boos Associates. (Credit: Kaestle Boos.)

The city is taking steps to pay for two of its major school construction projects—Norwalk High School and the South Norwalk School. 

The Finance and Claims Committee of the Common Council advanced resolutions that set up funding for the high school and the elementary school and reallocated some of the funds, based on some of the projected reimbursements from the state. 

“There’s big numbers here, but I’m hoping that I’ll reassure you that a lot of this is really just shoring up what everybody already knows and what has really already been approved,” Jared Schmitt, the city’s chief financial officer, said.

The committee approved appropriating $189 million to cover most of the cost of Norwalk High School—in addition to the $50 million the council had previously authorized for the project.

“You still need to authorize the spending of that money, even though it’s not ultimately coming out of our pockets—we still need to authorize the city to spend that money,” Schmitt said. “And so that balance is the $239 [million] minus the $50 [million] that’s already been authorized. That needs to be authorized—they’ve started doing work there now and it’s going to move pretty quickly.”

The committee also authorized an additional $15 million in what Schmitt described as “bond anticipation notes” or short-term bonds.

“That’s kind of gap funding for cash needs—so when there’s a lag in getting reimbursement from the state, we have some cash there,” Schmitt said. “Every quarter we’ll submit for reimbursement for the work that was done during that quarter. There may be a two to three month lag before we get that reimbursement, which means we’re kind of fronting the cash in anticipation of the grants.”

Schmitt said this will help them so they’re not “using the town’s cash to fund these projects.”

In addition, the committee approved reallocating $19 million in bonds that were already authorized for the South Norwalk School to Norwalk High School, since the South Norwalk School got approved for 60% state reimbursement. Schmitt said the City had previously issued $53 million in bonds for the project, but now that the reimbursement rate is increased from about 22% to 60%, the City won’t need all those funds to pay for the project. 

“We’re able to redirect that $19 million toward the high school,” he said. “So in essence, if you want to think about it this way, we’re saving $19 million in bond proceeds that we don’t need to spend on the South Norwalk School and can be redirected to the high school.” 

The full council will vote on approving these items at its meeting on Tuesday, June 25.

Comments

4 responses to “Paying for Norwalk High School and South Norwalk School: Finance Committee adjusts funding for projects”

  1. Bryan Meek

    So they have no idea how much has been spent so far. What could go wrong? It’s amazing anyone can tell you with a straight face that they are saving money after borrowing tens of millions oh and zero mention of the fact that we are not reimbursed for the cost of the money which is going to end up being in the neighborhood of $50 million on these projects by my quick math. I’m still waiting for the explanation of how are debt cliff jumped from 500 to 650 million in one year.

  2. Bryan Meek

    For those out there wanting to know what bond anticipation notes really are I’ll give you a basic example. This would be like you were me running out of cash to buy what we need so we rack it up on the credit card and then when the bill comes, you refinance it with your home equity line of credit clearly everyone could see how this saves money, right?

  3. John O’Neill

    Wait one second — The additional $ 15 Million needed for Short Term expenditures? Doesn’t Norwalk already have $ 50 Million set aside for that? So, we’re setting aside $ 65 Million for contingencies/payment gap? Is someone can explain why we need the additional $15 Million I’d appreciate it. Is Schmitt saying they’ll potentially be a gap for 25% of the project at times?

  4. Dawn Calle

    But I thought Bob Duff got the state to pay for a new Norwalk High School
    when a new Norwalk High School wasn’t even part of the school construction conversation. Hey Nancy. Can we have a revisit on that press conference where it was announced and how much we would be paying as opposed to what is going on so far. $$$$$

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