Rilling recommends budget; NPS would receive 4% increase

NORWALK, Conn. — Norwalk’s operating budget would increase 2.46% in a recommendation made by Mayor Harry Rilling. A $6 million drawdown from the “Rainy Day Fund” is planned.

The City-side of the budget would increase .75%, a negligible number fueled by an expected $12 million in employee benefit savings and Rilling-inspired City department austerity. The Board of Education’s operating budget would increase 4%, a nearly $9 million boost but well short of the $27.6 million requested by Norwalk Public Schools. Of that 12.9% requested increase, about 8% was said by NPS Chief Financial Officer Lunda Asmani to be attributable to the Common Council’s “zero percent” increase in 2020-21.

In December, Asmani called the requested budget “very tight” and “bare bones,” with no reduction in staff included.

Rilling, in a statement released Saturday, said, “I have a track record of increasing the Board of Education’s budget year after year – at much higher rates than my predecessors, demonstrating the City’s ongoing commitment to making sure every student in Norwalk has access to a world-class education by making smart investments in our schools and educators.”

He called the Board of Education’s requested increase “simply not equitable for the community.”

“When it comes down to it – we simply cannot fund everything and expect many of our residents to take the hit. We must balance everyone’s needs,” Rilling said in the statement. “… If we moved forward with that funding request, it would mean that taxpayers would see an average 8 – 12% tax increase Citywide. A tax increase of this nature would be nothing short of irresponsible.”

The recommended budget was presented at Thursday’s Common Council Finance Committee meeting. It will be presented again Monday to the Board of Estimate and Taxation and Tuesday in a special meeting of the full Council. The Council sets a budget cap March 7 and then the BET crafts a budget. It’s possible the BET will ask for a higher cap in mid-April; that would require a two-thirds Council majority.

Rilling, on Thursday, called the budget a “first initial draft” and predicted changes when the budget season ends.

He talked of the challenges residents face with inflation and pandemic-related job losses, and called for a “fiscally responsible” budget that “addresses both the critical funding and services that seniors, students and all residents need,” while ensuring Norwalk stays affordable for its residents.

He said the recommended budget includes funding for:

• “Improving and maintaining Norwalk world class assets such as our parks, green spaces and incredible beaches by supporting improved field maintenance and usage
• “Combating flooding and pursuing sustainability efforts to combat the threats of climate change
• “Supporting local businesses and entrepreneurs, improving traffic and congestion by building upon our transportation infrastructure and increasing mobility by installing more sidewalks, bike lanes and trail systems
• “Providing critical services for those in need, especially the most economically disadvantaged among our community members
• “Investing in mental health services for children and families
• “Perhaps the most importantly supporting our schools so they can continue to provide a world class education for our students”

 

Rilling told City departments to keep their requested increases to 3.5%, Chief Financial Officer Henry Dachowitz said, adding that when you factor debt service and in-kind expenses, the school district accounts for 60% of local tax dollar expenditures in the recommended budget.

Dachowitz called the $12 million drop in employee expenses the “primary driver” for “only” a .75% increase on the City-side.

Part of that is health insurance. An error made two years ago sent co-pays to the Board of Education, not the City-side health plan, Dachowitz said. The BoE account had $5.2 million on June 30 and that money has been transferred back to the City.

“This is a one-time, won’t happen again. But we were able to reduce the amount we needed for this year’s budget for health insurance expenses,” Dachowitz said.

Then there’s $8 million due to OPEB (Other Post-Employment Benefits), “primarily health insurance coverage for our retirees,” Dachowitz said. The OPEB trust fund is 95% supported and “the last couple of years we were fortunate with good investment returns for those fundings.”

Plus, “usage of health facilities and doctors was lower than anticipated,” a trend attributed to the pandemic, he said. Given COVID-19, “older people did not go to the doctors and hospitals as they normally would. We may have a rebound effect next year, as people go to the physicians now that COVID has subsided, but for this year, we get that benefit.”

That adds up to $13.2 million but Dachowitz said he wanted to beef up the workers’ compensation fund, as it “seemed a little light.” He allocated $1 million to “make sure we had enough of a balance for future claims.”

Drawing down $6 million from the general fund balance, or Rainy Day Fund, would drop its total to 15.3% of the recommended operating budget, “if nothing else happens,” an acceptable number for ratings agencies, he said.

In past years, the City has planned a drawdown only to have revenues come in higher than budgeted, negating at least some of the need to reduce the surplus.

The total recommended budget is $424.4 million, of which $226.6 million would go to the schools’ operating budget and $197.8 million would be City-side, including the aforementioned school-related expenses such as debt service.  The mill rate for a median home in the Fourth Taxing District would increase 3.3%, under the recommended budget.

“We feel that this is balanced, fair,” Dachowitz said. “It shows fiscal restraint. It’s affordable to Norwalk single family owners. And as the Mayor indicated in his opening remarks, it allows us to satisfy the priorities of the administration.”

Council members had no questions, noting that they weren’t provided with budget books.

It’s a 300-page document that must be reviewed before being sent to BET and Council members, Dachowitz said. “With some late changes, we just have to be careful and try to you know, we want a quality product out there.”

Council member Tom Livingston (D-District E) said Saturday that he didn’t know about other members but he’d gotten his copy.

Rilling, in Saturday’s statement, said, “I know that some will feel that this budget does not go far enough to fund our schools.  I am committing today, that the City will continue to seek out creative ways to fund a number of critical services, including additional mental health services and additional support for children and families, and we will look to build upon relationships with community providers and nonprofit organizations to meet these critical needs.”

FY2024 OPTG Budget Presentation v7 Feb 10 2023 204pm