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FINANCE / CLAIMS
COMMITTEE ACTIONS
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MARCH 17, 2003
Approved FJG 06/12/03
ATTENDANCE: Bruce Kimmel, Chair; Ken Baker, Betsy Bain,
Chris Perone,
Matthew Miklave, Doug Sutton, Carvin Hilliard
OTHERS: Jack Miller, Finance Director
STAFF: Fred Gilden, City Comptroller
Mr. Kimmel called the meeting to order at 8:05 p.m.
1. Discuss and approve whether Norwalk should exercise the option
granted by state law to increase the municipal portion of the real estate
conveyance tax from .25% to .50% of the sales price during the limited period
June 1, 2003 to June 30, 2004 as a temporary measure to replace state financial
aid to Norwalk that has been cut.
The Resolution would read:
APPROVE the attached resolution authorizing the City to impose an additional
tax "at the rate of one-fourth of one percent of the consideration for
the interest in real property conveyed" according to Section 40(c) of
the Amendment to House Bill 6495. The text of the resolution is attached.
Mr. Kimmel stated this matter has been discussed and a public hearing was held; he emphasized it's a temporary tax that would begin this June and end the following June, it will be further discussed whether it should be increased from .25% of the total sale to .50% of the total sale. The Board of Estimate has approved the tax and if this committee does not approve it it will have to go back to them.
Ms. Bain stated the tax is for a year and she said there has always been criticism about the stopgaps. She asked if the Board of Estimate has discussed the impact when the tax is no longer available. Mr. Miller said there was recognition that this would be a one-time opportunity that would be over in June 2004.
Ms. Bain asked what percentage the mill rate would be saving by instituting this. Mr. Kimmel replied it's about 1%.
David Davidson said the board favored the implementation of the tax in anticipation of grants form the state and in the absence of the cuts for the current fiscal year, the fact remained that the legislation saw fit to pass it to the city.
Mr. Miller said that they need to recognize next year FY-04, would be the worst year due to absorbing a lot of revenue losses; so the budget is based on reduced revenue sources. He said that on a budget-to-budget basis for FY-2005, they are not making up all they had to lose.
Mr. Baker asked about the stopgap measure. Mr. Miller said this was due to the municipalities trying to make up the revenue losses.
Mr. Perone stated the option of going ahead with the conveyance tax was due to trying to make up the losses; but in looking at it, he realized its not permanent and would end in 2004, so therefore he was agreeable to it.
Mr. Kimmel asked if the temporary nature applies to the increase of .11 to .25. Mr. Miller said the .11 is fixed.
Mr. Kimmel said they have been provided with an opportunity to increase it further; but anything that lessens the property taxes on people is a good thing, so it may be necessary for 2005.
Ms. Bain noted that last year; the conveyance tax was 1%. Mr.
Miller replied that the municipal tax is .11%.
Mr. Gilden clarified there are two different taxes. Ms. Bain replied that
she was trying to determine how much tax one would pay now and if it would
be four-fold.
Mr. Kimmel commented there is no absolute increase in the tax. David added that the state portion remains the same.
Ms. Bain asked if the total package of what a property seller pays would double. Mr. Gilden said no, and he noted the July 1 package reflects an increase.
** MR. BAKER MADE A MOTION TO PASS THE RESOLUTION TO THE
COMMON COUNCIL FOR APPROVAL
** MOTION PASSED UNANIMOUSLY
*It was noted this item would be on the agenda Tuesday, March 18, 2003.
2. Discuss and approve whether Norwalk should exercise the option
granted by state law in Section 53 of House Bill 6495 to restore its personal
property tax levy on manufacturing equipment limited to the difference in
the amount reimbursed to the state and the amount due the city on its grand
list for such personal property used in manufacturing.
The Resolution would read:
APPROVE the attached resolution authorizing the City to levy a tax on certain
new manufacturing machinery, equipment and trucks according to Section 53
of the Amendment to House Bill 6495. The text of the resolution is attached.
Mr. Miller said the state has been reducing the amount; they used to pay 100% of inventory but subsequently they reduced it to 80% and it may be reduced even further. He said the city can make-up the portion the state would no longer give.
Mr. Kimmel asked how much revenue it would generate. Mr. Miller said he wasn't sure if it would be 100% of the tax loss or other, he said he would find out.
Mr. Miklave asked if there was a deadline to vote. Mr. Miller said not that he knows of.
Mr. Miller further said they were anticipating $700-800k in the budget and they may get up to $1 million or 1.3 million; but he wasn't sure. He said certain assumptions were made in the budget, but the greater fluctuation they have the better.
Mr. Kimmel asked if they were expected to generate between $300-400k. Mr. Miller said it may be between $700-800k but noted he needs more information.
Mr. Perone asked what impact the taxpayer would see. Mr. Miller said he couldn't answer this because they're not clear up to what level they are expected to get yet.
Ms. Bain asked if the committee and council votes to approve the option, does this necessarily mean they should exercise the option. Mr. Miller agreed this would be intent to use it.
Mr. Kimmel stated the item should move forward due to the need present.
Mr. Miklave stated it was somewhat troublesome to him to be asked to vote on this when all the impacts were not known; he said he wouldn't support it at this time.
Mr. Miller stressed the circumstances that the state agreed to in the past to reimburse any losses; but this is no longer a practice.
Mr. Hilliard asked when they could get an estimate of the revenue it would bring in. Mr. Miller said he could provide the information tomorrow.
Ms. Bain asked what the state planned to reimburse for last year. Mr. Miller said 80% and this generated reimbursement of approximately $1 million.
Ms. Bain asked if this allowed them to collect 80%. Mr. Miller clarified it amounts to 20% of the 80% or less; but he wasn't sure.
Mr. Kimmel said that tomorrow they would expect all information to be available and the floor would be opened up for more questions.
Mr. Baker asked if the actual tax would go up. Mr. Miller said no, its property taxed like any other in the city, and again, he stated it's not certain what percentage would be allowed. He noted that whatever it is, there might be a shortfall.
Mr. Kimmel suggested voting to pass the item to the Common Council pending further information.
** MR. PERONE MADE A MOTION TO APPROVE THE RESOLUTION PENDING
FURTHER INFORMATION AND TO PASS THE ITEM ON TO THE COMMON COUNCIL
** MOTION PASSED WITH THREE VOTES IN FAVOR; TWO OPPOSITIONS (MR. MIKLAVE,
MR. HILLIARD) AND ONE ABSTENTION (MR. BAKER)
3. Receive Transmittal from Board of Estimate and Taxation on the Fiscal Year 2003-2004 Operating Budget and Determine Budget Cap.
Mr. Kimmel said this item was on the agenda to receive it but he commented that in the past, the cap has become before the budget and due to governor's late projections, they placed a placeholder cap and are still waiting for the governor's sign-off; he explained the cap on the table doesn't exactly fit the budget. He said a two-thirds vote would be required tomorrow and if it was decided to raise it to a number higher or lower it would have to go back to the Board of Estimate. Mr. Miller agreed this would be the case.
Mr. Kimmel said the options were to:
§ Accept the budget
§ Decide spending is not high enough or too high
Mr. Miklave asked if regardless of how it's voted, were they done with the cap. Mr. Miller replied whichever way it's voted; the Board of Estimate cannot exceed the cap.
Mr. Kimmel said it could be changed in any direction, but if so, it goes back to the Board of Estimate. Mr. Miller said this was correct, but would have to be at two-thirds of the vote.
Ms. Bain asked what they were voting on. Mr. Kimmel explained they were voting on the spending cap of what they would allow the city to spend. Mr. Gilden clarified they would be voting on the resolution as outlined in the packet, which is the amount of $212,189,688.
Mr. Kimmel said that in the past, council members had some opinion on what could be spent and where; for example: if they were unhappy with the Registrar of Voters and they wanted to make a point of their displeasure, they would have recommended a lower cap and removed the money from the Registrar of Voters. He stated a number could be picked but not necessarily over the numbers already decided upon.
Mr. Miklave stated this approach violates the intention of the charter; he felt if there is an overall cap, this doesn't expressly give them authority over the budget and he noted that although they can make recommendations, its possible the Board of Estimate could ultimately cut programs the committee may support and this would be futile.
Ms. Bain agreed with Mr. Miklave and she further stated that if council members had strong feelings about certain issues, they should have been made known during the Board of Estimate deliberations.
Mr. Kimmel stated all were aware of the problems with the budget,
but he felt that if any individual member of the council wished to make a
point, he saw no problem with doing so, he said their feelings should be known
concerning certain issues, especially those that affect the taxpayer's. He
further stated that if it was felt a taxpayer's monies were being abused action
should be taken on the council floor, but not necessarily in a public forum.
He reiterated that council members should be able to voice their concerns.
Mr. Miller stated this could be a little complicated in how it would be handled
and exactly whom it would affect.
Mr. Kimmel continued and said he was cautious of the budget
and recommended before finalizing it, that they look at the Early Childhood
Literacy Program and Curriculum Initiatives Program that he would like to
see stay in place. He said he would make the recommendation for the purpose
of sending a message to the Board of Education and again, he would recommend
the following:
§ Early Childhood Literacy Program
§ Curriculum Initiatives Program
with emphasis on being conservative on the operations side.
Ms. Bain shared that having been on the other side; the expectation of having the city make good on such a recommendation was not guaranteed, so she felt it would be best to appropriate the money now.
Mr. Miklave stated although he was not an expert on education budgets; in his view, there are always ways to move funds around within the budget if necessary, its not a major issue to move them from one area to another. He stressed that he would shy away from taking any kind of symbolic stance within the council duties and felt they need to be careful in their zeal of exercising good government, noting that all the facts are not always known, so therefore, he was agreeable to voting on the cap.
Mr. Kimmel clarified the issue of taking a symbolic stance was meant to drive home the importance of keeping certain programs in place and to indicate their support thereof and the importance of letting it be known that they should continue to support those programs previously stated. He said it's also important to note they should be as conservative as can reasonably be on the operations side and if there needs to be a mid-year adjustment, again, it would be known that a council member would be sympathetic.
Mr. Perone stated he supported Mr. Kimmel's statement's; he said considering the fiscal climate that is imminent, these programs are crucial and he agreed with stressing conservatism on the operations side.
Mr. Sutton said that in essence, just as they were put in place as a committee, the Board of Estimate was put in place to exercise a judgment, and in his opinion, he hoped they would be prudent in what they appropriate.
Ms. Bain stated she felt it was important to go with what they are appropriated now and not concentrate so much on what could happen in the future; she further noted they should not give false hope of what could be.
Mr. Kimmel agreed with the latter statement, but again, he repeated there are many people who believe good things are being done with curriculum issues and his feeling was that they should not fool around with certain programs because there is a concern of standards being kept up to par within the education system. And again he would make a recommendation stating such.
Mr. Hilliard stated he would be in support of Mr. Kimmel's recommendation.
Mr. Baker stated he would be comfortable with supporting the cap proposed.
** MR. KIMMEL MADE A MOTION THAT A RECOMMENDATION BE MADE
THAT THE BOARD OF EDUCATION MAKE EVERY EFFORT TO FUND THE EARLY CHILDHOOD
LITERACY PROGRAM AND CURRICULUM INITIATIVES PROGRAM
*He noted this recommendation would not be proposed as a formal policy but
merely as a recommendation.
Ms. Bain stated that in essence, the Board of Education is qualified to act on the issues they know best about and she felt that to try to direct them in any specific area wouldn't send a positive message.
Mr. Perone stated he saw Mr. Kimmel's recommendation as a means of getting across to the Board of Education that they support the good work they have been doing.
Mr. Miklave stated he never heard a council member speak out against education; however, he questioned if the support is there and if they attempt to direct them, he expressed whether other programs or areas within the Board of Education system would then begin to be questioned. He stressed they should vote on the cap and doing otherwise in his opinion would not be supportive.
Mr. Kimmel stated there are other issues surrounding this issue but said it wasn't relative at this time to elaborate on them. He said there is a history of things that were done in the past but he felt they would be supporting the Board of Education in a complex situation and his view is to send a statement that they sympathize and to ask them to do their best with the programs he mentioned. Again, he asked for a sense of the committee for recommendation of requesting these programs remain in place. The motion was completed as follows:
** MOTION FAILED WITH THREE PERSONS IN FAVOR AND THREE OPPOSITIONS (MS. BAIN, MR. BAKER, MR. MIKLAVE)
** MR. KIMMEL MADE A MOTION TO RECEIVE THE TRANSMITTAL AND SEND IT TO COUNCIL
WITH THE RESOLUTION AS OUTLINED
Mr. Miklave stated the same issue with the Board of Education applies to the city budget.
Mr. Kimmel stated the cap is based on the budget and if the budget changes the cap changes. Mr. Miklave disagreed and said the cap was the maximum expenditures that could be done.
Mr. Kimmel deferred to Mr. Miller for clarification and Mr. Miller responded that Mr. Kimmel was correct. He stated the cap is based on the $212,189,688 and they don't have the ability to move the money around; he said it needs to be understood that to pick $195,218,263 and not vote on it wouldn't be the most judicial thing to do. Mr. Miklave replied it seemed the $195, 218,263 number comes from somewhere but it comes from a lot things that the council doesn't have authority over, it's a cap not a mandate to spend, it could be less or more.
Mr. Kimmel countered that the cap was derived from the budget, there isn't one without the other, and to approve the cap resolution is to approve the totals and accept the revenue projections. He said they had no voice over them and he restated that's why he felt it was important to make their concern known, but again, the totals are based on the budget.
Mr. Kimmel pointed out that if they pass the resolution it basically votes on the numbers and this shouldn't be ignored.
** MR. KIMMEL MADE A MOTION TO ADOPT THE RESOLUTION AS OUTLINED
** MOTION PASSED WITH FIVE PERSON IN FAVOR AND ONE PERSON IN OPPOSITION (MR.
MIKLAVE)
4. Recommend the Re-Appointment of Lisa Biagiarelli to another term as Tax Collector from July 1, 2002 to June 30, 2006.
Mr. Perone stated she has done an outstanding job and was fully supported by him; she has worked very hard in recovering outstanding taxes and her commitment is commendable.
Mr. Kimmel concurred.
Mr. Miklave stated she had his support due to the professionalism and dedication to the job in serving the committee and providing information; she has consistently done this time and time again.
Ms. Bain commented on the issue of the length of the appointment; she relayed that a contract of this length should be looked at; she noted this statement was not a reflection of Ms. Biagiarelli's commitment to the job.
Mr. Miller stated Ms. Biagiarelli was not an Ordinance employee; he explained her employment status is otherwise and believed the appointed term is a charter term.
Mr. Kimmel commented the term could be verified, but again, he agreed he was in support of Ms. Biagiarelli's re-appointment.
** MR. KIMMEL MOVED RECOMMENDATION OF LISA BIAGIARELLI'S
RE-APPOINTMENT
** MOTION PASSED UNANIMOUSLY
ADJOURNMENT
The meeting was adjourned at 9:35 p.m.
Respectfully submitted by,
Diane Graham
Telesco Secretarial Services
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