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JANUARY 20, 2005

ATTENDANCE: Bruce Kimmel, Ken Baker, Doug Hempstead, Carvin Hilliard,
Doug Sutton, Joseph Coffey

OTHER(s): Tom Hamilton, Director of Finance

CALL TO ORDER

Mr. Kimmel called the public hearing to order at 7:05 p.m.
Mr. Kimmel stated this hearing concerned the Operating Budget. He announced that there was a sign up sheet for those wishing to speak.

FISCAL YEAR 2005-2006 OPERATING BUDGET – PUBLIC HEARING

Mr. Kimmel called Tom Hamilton, the Finance Director forward to explain the budget handout.

Mr. Hamilton briefly summarized what was contained in the handout as it related to the budget. He described what was involved. He said he requested budgets from various departments as a starting point, but this wasn’t an end point. And there were no reductions incorporated yet. He said that on the forth Monday in January, the Board of Estimate would meet with various departments to discuss the budget further. He expected changes would be made.

Mr. Hamilton went on to say that the department requests were just over 8% and the Board of Education’s budget increased by 5.81%. He said the handout summary showed a larger increase was due to the fact that the budget didn’t include the $2.5 million in contingency, but they are not adding that to the budget. Overall, the budget will go up only 8%. The tax levy will increase by 8.95%. He said there were a great number of uncertainties due to the city’s budget calendar starting so early, so a lot is known yet. They should have a better idea after the Governor’s budget is released. He further noted they were using the projected grand list that will also be subject to change. The real estate conveyance tax was slated to be reduced on June 30, 2005, but it’s not known if legislative will extend that. There are also some other unknowns that will be refined closer to the end of the fiscal year. For instance: he noted energy costs have fluctuated a great deal, but other costs will be subject to revisions.

Mr. Hamilton spoke about employee benefits that would also be looked at for increases or decreases to be determined. He referred to the departmental requests budget spreadsheet that summarized non-tax revenues to support the budget. He said they calculated an average mill rate and depending where one lives; the mill rate may differ from what was on the list now. He said that re-evaluation will also have an impact on resident’s taxes as well. A single-family residential taxpayer in the 4th District will see an increase of 9.1%.

Mr. Kimmel introduced the members of the committee. He clarified that this was the beginning of the budget process that would lead to the final outcome in the spring. He mentioned that the public needed to be aware that the Common Council does the framework on the budget and the Board of Estimate has the power to move funds around depending on the department involved.

Mr. Kimmel requested that the department heads present from the Board of Education and the Department of Public Works make a very brief presentation to allow them to address their specific needs.

Mr. Hal Alvord, the Director of DPW stated his department’s approach to develop a budget request was by using the zero base approach. He noted they started the process eight years ago. He explained there was a concern that DPW had an obligation to the Common Council and the public to do things that are required by federal or state law. So they stared with all the items DPW is charged to do and turned these items into goals to come up with a basis for the budget requests. He said he understood choices will be made, but he stressed that he was not sure if the Common Council was aware of the things that are key in making their determinations. Overall, he said he was satisfied with each element of the budget requests.

Mr. Kimmel commented that they had to deal with state and federal mandates that are very difficult to adhere to and achieve.

Dr. Corda, Superintendent of Norwalk Schools stated their process fro the budget necessitated what they had to look at to continue operations as they now stand, such as contractual obligations, state and federal mandates etc. This resulted in a change in the budget of approximately 5.81%. In addition, there was a change in the staff that totaled a little over twelve (12) positions to accommodate the “No Child Left Behind” standard. So they needed an appropriations increase of .7 for the additional positions requested and this was the basis for their requests.

Ms. Greta DeAngelis, 11 Hillwood Place stated she has been a 19 year resident of Norwalk. She is also a parent member of the Board of Education. She said the read the BOE requests and recommendations and doesn’t support them. However, she does support the twenty-one (21) additional specialists, but not the additional support staff requests. She further stated she had serious concerns that they will not have enough funds for other expenses that are sorely needed. She said she felt there was a problem with the percentages that may be allocated to the BOE, pointing out that while she thought education was important, it doesn’t make up the entire city. She further questioned why textbooks and other supplies were not downsized to a minimal amount. She felt they should make do with what is available currently. She also questioned why salaries had to figure into the budget. She ended in recommending a conservative approach to spending in the year 2005-2006.

Mr. Bill Nightingale, South Beach Drive, Rowayton said he calculated numbers for GEP economic growth. He reviewed that the year-on-year CPI and year-to-date was calculated at 3.8%. He noted that ex-energy was 2.2%. He said these percentages have increased from 1.9% that was seen last year. The GDP growth year-to- date was 4%, where it was 4.2% last year. He said he looked at the proposed tax levy of 8.95% that he thought reflected a massive inflation of economic growth. He expressed if it continues to grow at this rate; for what has been reflected in the last four years, the total city budget budgets have been in excess for the last two to three years. He further noted that taxes are going up much faster than inflation resulting in a greater burden of overall expenses for everyone, especially the elderly. He stressed that growth has been way in excess of inflation. And he expressed they can’t do this without overwhelming taxpayers. He hoped to keep the rate down in excess of inflation.

Mr. Nightingale mentioned that the Board of Estimate doesn’t hold public hearings. He asked if this Finance Committee could help foster opening up communication between them and the public. Mr. Kimmel clarified the Board of Estimate does hold meetings on the budget during the last week of February or beginning of March. The meeting is held for the purpose of tweaking their recommendations.

Mr. Kimmel asked Mr. Hamilton about the Board of Estimates process. Mr. Hamilton said that the public’s main opportunity to participate would be on March 2, 2005 when meetings are open to the public. He clarified however, that public speaking is subject to the chairman’s discretion. The primary purpose of those meetings is to hear the various departments’ budget requests.

Mr. Kimmel asked if there was anyone else present to speak regarding the operating budget requests for the year 2005-2006. He reminded everyone that the requests were not finalized yet.

Mr. Kimmel stated that Diane Lauricella submitted a statement into the record (see below).

Page I of I

Bruce Kimmel

From: To: Sent: Subject:

"diane lauricella" <dlauricella24@yahoo.com> <brucekim@optonline.net>
Thursday, January 20,20053:36 PM Operating Budget Public Hearing

Chairman Kimmel:

I regret that I cannot make it to your public hearing tonight. I have studied the operating and capital budgets of Norwalk for several years due to my work with the League of Women Voters and our Environmental Management Project, begun in the early years of this administration. I had planned to come in from NYC this evening but am helping out my CT housemates and find that I must stay in NYC tonight.

May I submit backup information after this evening that I think will assist your committee during its deliberations.

I. Planning and Zoning Budget: Conservation: The L WV began discussions with Mayor Knopp about separating the Conservation Commission in two ways; A)Separate from P & Z either as its own Dept or with either Health or Public Works, due to the perceived conflict of interest between land use and land conservation. B)Separate the Conservation Mission from the Inland Wetland Mission. WE will forward additional backup and examples from other towns in CT when I arrive back from NYC.

2.Recreationand Parks: Must have a budget to hire a professional to evaluate/assess all of the City's precious open spaces...the feeling is that how can one properly manage its resources if one does not really know what you have?

3.Fire Depart and Police Dept./Emergency Services: We are now helping to re-organize a Local Emergency Planning Committee, but there is a need to have at least some budget to assist, even if we
just borrow some staff time from another Dept. to assist in making sure the whole Community can work together.

Please enter this into the record and feel free to forward to your other Committee members.. Sorry for the brevity. 1/2012005

Dr. Corda returned to the matter of Ms. DeAngelis’s comment regarding the Board of Education’s budget. He spoke to the request for textbooks. He emphasized that the request was for replacement books only. He noted that textbook purchasing was done through the BOE’s Central Office. As for equipment, he said different buildings may make determinations for purchases, but all of those purchases are done through state contracts.

Mr. Kimmel closed the public hearing at 7:40 p.m.

SPECIAL MEETING FOR THE DISCUSSION ON THE FISCAL YEAR 2005-2006 OPERATING BUDGET and take any action needed.

Mr. Kimmel called the meeting to order at 7:50 p.m.

Mr. Kimmel said the operating budget was to be considered with expenditures recommendations to the Common Council. He said they needed to come up with an expenditures cap by Tuesday. With that said:

** MR. KIMMEL MOVED NOW, THEREFORE, BE IT RESOLVED BY THE COMMON COUNCIL OF THE CITY OF NORWALK THAT:
The maximum limit on total appropriations for the City of Norwalk for Fiscal Year beginning July 1, 2005, shall be no more than $206,497,481. This cap amount represents the same amount of expenditures approved in the current 2004-05 budget less an estimate of intergovernmental grants to be received in 2005-06. In adopting this resolution, the Common Council also states that this expenditure cap is especially an artificial placeholder cap, and should be viewed as such. Our decision to establish this flat preliminary expenditure cap is predicated on the notion that we are awaiting additional information regarding the operating budget.

Be it further resolved that the result of this vote and resolution, together with the attached 2005-06 Budget Guide, be forwarded by the Clerk of the City of Norwalk to the Board of Estimate and Taxation.

Mr. Kimmel explained they were caught in a situation to make serious decisions about the budget without knowing what the Governor would propose. This creates all kinds of questions for the Finance Department, so in a sense, he thought they were flying blind until they knew that information. He said the grand list wouldn’t be available until the end of February, so it was difficult to come up with an expenditures cap. He further stated it would be premature to designate a hard cap at this time without knowing expenditures.

Mr. Kimmel further mentioned the Bi-partisan Agreement for the timeline doesn’t work for what is involved for the charter Commission. He said they have recommended they change the budget timeline in the future. He stressed that they shouldn’t give up and what counts is the final budget and what final mill rate will be established in the spring.

Mr. Hempstead asked for state aid, what percentage was budgeted. Mr. Hamilton said it was between 8% and 10% for state and other department fees and charges. He said the total revenues come out to 16%.

Mr. Hempstead said that under normal circumstances, in past years; he asked Mr. Hamilton if he anticipated a percentage of 8%. And how much of that did he expect we wouldn’t get. Mr. Hamilton responded that within the last few years, the numbers have been significant.

Mr. Hempstead asked what the anticipated mill rate would be for this year. Mr. Hamilton said he was still waiting for the Tax Assessor to complete his grand list to determine how much was related to re-evaluation and real growth.

Mr. Hempstead commented that the way Mr. Alvord of DPW outlined their department’s needs, was a good model of how other departments could do it.

** MR. HEMPSTEAD MOVED THAT THE AMENDMENT BE MODIFIED FROM 0% TO A 3.5% INCREASE IN THE AMOUNT OF EXPENDITURES TO ALLOW DEPARTMENTS TO KEEP IN LINE WITH INFLATION

Mr. Kimmel spoke against the modified amendment. He said he would support a true zero percentage-0% that was originally requested. He expressed that due to issues with Department of Public Works, the problems would still exist, but they wouldn’t be as drastic if they had a larger operating budget. He stressed this applied to the Board of Education as well. He reiterated that he didn’t support the 3.5%. He felt a figure such as this was premature and he didn’t think it considered all the question marks and approach to the budget.

For example: when they were told about the $16 million in state aid, it was realized that the state is looking at a big deficit that they have to address, so this will result in a hardship for municipalities. He said to keep in mind that a big portion of the budget was not for discretionary purposes, but is for staff positions and other. He felt that $1million covers a lot of positions accompanied with benefits. He thought there was a possibility for significant cuts, but for now, he said he would be comfortable with a placeholder based solely on the requests set forth. In essence, he said he would hold off on the 3.5% increase proposed and perhaps in a few months, they could revisit the issue. He repeated that he would vote against the 3.5% increase.

Mr. Coffey said that in the big picture, they had to look at keeping increase minimal. If residents were no longer able to deduct property taxes, Norwalk would cease being affordable for current residents and new homeowners. He asked how much the debt level was expected to go up. Mr. Hamilton said it would be approximately $2.8 million next year.

Mr. Coffey went on to say that they should be fiscally conservative and should take a look at what the budget does to provide services in different departments. Overall, he felt they needed to be cognizant of the citizens of Norwalk.

Mr. Kimmel repeated the motion that was on the table that:
** MR. HEMPSTEAD MOVED THAT THE AMENDMENT BE MODIFIED FROM 0% TO A 3.5% INCREASE IN THE AMOUNT OF EXPENDITURES TO ALLOW DEPARTMENTS TO KEEP IN LINE WITH INFLATION
** MOTION FAILED ONE VOTE IN FAVOR AND FIVE VOTES IN OPPOSITION (MSR’S: KIMMEL, BAKER, COFFEY, HILLIARD and SUTTON)

** MR. KIMMEL MOVED THE ORIGINAL MOTION THAT:
THEREFORE, BE IT RESOLVED BY THE COMMON COUNCIL OF THE CITY OF NORWALK THAT:
The maximum limit on total appropriations for the City of Norwalk for Fiscal Year beginning July 1, 2005, shall be no more than $206,497,481. This cap amount represents the same amount of expenditures approved in the current 2004-05 budget less an estimate of intergovernmental grants to be received in 2005-06. In adopting this resolution, the Common Council also states that this expenditure cap is especially an artificial placeholder cap, and should be viewed as such. Our decision to establish this flat preliminary expenditure cap is predicated on the notion that we are awaiting additional information regarding the operating budget.

Be it further resolved that the result of this vote and resolution, together with the attached 2005-06 Budget Guide, be forwarded by the Clerk of the City of Norwalk to the Board of Estimate and Taxation.

Coffey said he liked the 0% increase at this time. He emphasized they can’t continue to outpace inflation.

There was some open discussion on interest rates.

Mr. Hempstead commented that after reading the labor contracts, he thought that a snowball effect would take hold. He said unequivocally that he didn’t support the 0% budget. He further stressed that the committee members were elected by taxpayers who trusted them to decide what they could afford.
** MOTION PASSED WITH FIVE VOTES IN FAVOR AND ONE VOTE IN OPPOSITION (MR. HEMPSTEAD)

Mr. Kimmel stated that he would recommend the resolution above to the Common Council based on tonight’s vote.

ADJOURNED

** Mr. Kimmel moved to adjourn at 8:20 p.m.
** Motion passed unanimously

Respectfully submitted,
Diane Graham
Telesco Secretarial Services