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NORWALK, Conn. – Millions of dollars are needed to maintain the budget proposed for Norwalk’s schools this year due to an unexpected shortfall, a budget that was already short of “same services.”
The shortfall in the health insurance account appears to be about $4 million, according to Thomas Hamilton, Norwalk’s finance director. He stressed that the number is not finalized yet.
Hamilton met with Elio Longo, chief operating officer for the Norwalk Public Schools, and his staff Wednesday and went over the figures with a health insurance consultant on the phone. The information is being updated as to how actual projected claims were running on the self-insured piece of the school department’s budget.
There is other information to develop. “They may have surpluses and/or shortfalls in other accounts,” Hamilton said. “If they’ve got surpluses in other accounts, that’s good because that can be used to cover some portion of that shortfall. If they have shortfalls in other accounts, that would be of further concern because that could push the total number higher. I don’t know what the final projected number is.”
"We were surprised," Mayor Richard Moccia said in an email. "We will be having a serious discussion with the [Board of Education] to determine how it happened and how we can address the matter."
Steven Colarossi, chairman of the Board of Education's finance committee, put the shortfall at closer to $3 million. He said the problem began with the work of former interim Chief Operating Officer Dan Cook, who worked for the city for 2½ years and was replaced in early 2011 by Craig Drezek.
Drezek resigned in June and was replaced by interim COO Ray Senese, who was replaced by Longo late last year.
Cook's work was "less than stellar," Colarossi said. The quick succession of COOs is part of the reason there is a problem, he said. "There has been an ongoing computational mistake," Colarossi said.
"We have a deficit," he said. "There's no getting around it, there's a deficit. The deficit isn't that the board acted irresponsibly in making cuts. In my opinion the deficit is the result of a number of factors, not the least of which is that we didn't have an actual budget document in front of us when we were making the cuts [last June]."
Pressed to meet a deadline, board members worked until 1:22 a.m. at a marathon meeting to balance what Colarossi calls the "Holy Ghost budget." Drezek did not have the staff he needed to comply with a line-by-line requirement. "We had to accept it on faith," he said.
"We will sit down with the city next week and try to figure this out," he said. "The travesty is the taxpayers dug into their pockets last year, dug into their pockets to fund the school system, and the people who should have been watching all of those nickels and dimes didn't. We as a board didn't take irresponsible cuts. We had budget documentations. We had insurance company worksheets showing this is what you need."
Correction made, Aug. 11
Comments (25)
@jlightfield
I am impressed by your humorous response Mr Nelson's insulting and despicable comment to you. You have proved that you are the better person.
I did not know you had a blog, I would be interested to read it, can you provide a link?
@lwitherspoon: Thanks for alerting us. This is in violation of our Terms of Service, and that account has been removed and their comments have been deleted. Thanks.
-Andrew Vazzano, MSC
Someone has created a username close to mine in order to pretend to be me and confuse people. Maybe the person thought it would upset me - if that's the case, the person failed. I'm flattered that someone thinks it's a worthwhile use of time to try and impersonate me online rather than post something under the person's own name. Maybe the person is impersonating me because the person feels his own name is no longer taken seriously by anybody.
Most likely the person has resorted to impersonating and playing games because the person feels unable to make any compelling points of his own based on facts and logic, so he has simply given up. The tactic being employed by this person is sneaky and underhanded and does not reflect well on this person.
@Mr Nelson, "Mr. Irrelevant" (Chandler Harnish) was drafted by the Colts on Sunday, please don't confuse the NFL draft with comments about Norwalk school budgets.
Jackie why don't you stick to that rag blog of your. Don't you get it your voice is irrelevant.When Moccia was on your side no on could critique him on your rag blog and now that he kicked you to the curb things have changes.
@Steve Colarossi I'm really not following your arguments at this point. If you are saying 15 teacher positions account for $266k each of salary and benefits that now represent the $4 million shortfall, I'm baffled at how this is now an issue. Regardless of how many different accounts (line items) were used offset new expenses, a monthly report should have caught the mounting balance in labor. That is if you had core competencies in your admin staff that could write database queries into MUNIS to extract the real cash positions of accounts. The failure here is an accounting system that is failing the board and as a result the taxpayers. Isn't it time the board address that?
Iwitherspoon
OK, Fairly stated argument. When the economy was doing better and the City was earning close to 10% on investments, none of this was a problem. Negotiating the changes you talk about will not be easy and will not happen all at once. Hopefully, some of them will not be needed as the economy improves. When some of the pension plans now in place were negotiated, both sides had actuaries and my union negotiating team believed that not only was the pension plan affordable, but, if both sides contributed what was promised, there would soon be enough in the funds for further improvement in the benefits. The City did not contribute what was promised and we had no cause of action as long as the benefits were paid. I believe benefits were paid out of operating budgets with nothing going into the pension fund for many years, neither the city's contribution, nor the unions, which the City controlled. Moccia's administration is now putting some money into pension funds, but I don't know if the amount equals the contract requirements and they don't say.. It will take a long time to build up the fund and make up for past mistakes. I also don't know if pensions are now coming out of the fund or, in part, still out of operating budget. From time to time, there are statements suggesting that pensions are not a burden on operating budgets and actually save the City money, if the pension is being paid out of the fund.. Five retirees going out at top grade pay are replaced by five at entry level, a big difference.
The cost of medical insurance has gone up, way beyond any projections, so the city has pushed some of it's contractual obligation off onto medicare so that retirees are now forced to pay medicare premiums which were not part of the contract when it was negotiated. In my case, medicare premiums take 10% of my pension.
Stevecolarossi
If you are saying somebody hired teachers without board approval and you are just now discovering it, shame on you and on Dr Marks. It is clearly time for a forensic audit, and I would not rule out criminal prosecution. If it was the DPW, for example, and Hal Alvord bought another truck without council approval we all know he would be in very deep trouble. I don't see a difference if she hired more teachers than you authorized. This is starting to sound more and more like a game of chicken where she is trying to bluff more money out of the City. Would 15 teachers account for 4 million ?.
Old Timer
I never said that the City should not honor existing contracts with workers and retirees - not sure where you're getting that. Of course existing contracts are basically set in stone and apart from declaring bankruptcy, the City has no choice but to pay what it agreed to pay. I do take issue with the elected officials who agreed to those contracts and benefits. Anywhere that the City is paying more for a service than the prevailing market rate, taxpayers are losing out. Defined benefit pension plans are a thing of the past in private industry, which moved over to 401k plans a long time ago.
My point is that when it comes time to negotiate contracts, the people negotiating on behalf of us the taxpayers need to stick to their guns and achieve wages and benefits which are in line with what exist in the private sector. That means no more guaranteed raises, and retirement plans which are more like 401k plans rather than defined benefit plans, the future cost of which can never be known.
The issue wasn't that cuts were "assumed" to be made but weren't. The issue is that cuts were made but were not accurately reflected on the final report transmitted to the City. The BoE was not "confused" about cuts. In fact, prior to our making a $200,000 reduction in health insurance costs, we asked the COO if there was any information about premium reductions which he confirmed. The cut we took comported with his sound advice (and it was later revealed that the premium reduction was $300,000, which means that our reduction should have resulted a slight surplus in that account).
If you review the comments that I had made in the link provided by Ms. Lightfield, you'll notice that Supt. Marks had advised balancing the budget by eliminating a greater number of teacher positions than were ultimately voted to be reduced. However, Supt. Marks then hired back all of the teaching positions that had been eliminated eviscerating those savings. As I had stated repeatedly during the budget debates, the large number of proposed teaching position eliminations were never accompanied with a plan of which schools would face the cuts and how students would be impacted. If we had followed those cuts, the summer hiring would, in my opinion, have restored all of those positions, thereby creating a still larger deficit. After all, if there had been 15+ teaching positions which could have been cut, why would there have been teaching hiring in excess of the numbers we had eliminated? The excess teaching hirings show that the argument in favor of the teaching position cuts (advocated by one member and the superintendent) was not well-grounded.
poor Tim T...I will pray for you to be able to stop harboring so much hate. Peace be with you
Iwitherspoon
The idea that contracts should not be honored is troubling. You don't get away with not paying your mortgage or car loan or tax payments, why do you think it is OK to fail to honor contracts with City (our) employees ?
You may have a valid complaint with elected officials who negotiated those contracts, but you have no reason to believe the employees are wrong to expect the City to honor them. If you could get straight answers, you would find a large percentage of the retirees you feel are over-compensated have been forced to move out of Norwalk, and, in many cases, out of CT, because they cannot afford to live here anymore. The lavish pensions you talk about are not that lavish when the bills come due. The whole concept of retirement benefits for public employees grew out of politicians eager to boast about holding the line on taxes, years ago, holding the line on very low wages with the carrot on the stick being generous retirement benefits for those that stayed long enough, when later administrations would have to fulfill their promises. At the time, few lived long enough in retirement to present much of a burden. These same politicians assumed they were much smarter than any union representatives and failed to fund, or "borrowed" from the pension funds they agreed to maintain. They also failed to adjust enough when retirement ages went down and retirees started surviving longer. Now, we are dealing with the results and you are blaming the employees and their unions rather than your elected representatives. Most City employees now pay into their pension funds under agreements that the City will match their contributions and expect the funds will easily cover the benefits. If the numbers are not working today because of reduced earnings on those funds, rather than the City cheating on it's funding obligations, both parties may need to agree to higher contributions and the city, as fund manager, may need to find more productive investments. If the reduced earnings are only temporary, as we all hope, the adjustments need not be all that severe.
Part of the City's financial problems may be all the high paying, non-union jobs held by appointees who take their pay home and spend it in another community. Doesn't the City hire lawyers from other communities to negotiate with the unions ? Now, politicians eager to claim they held the line on taxes, are outsourcing whatever they can to private companies so we end up paying fees and they can campaign on the holding the line on taxes. The irony of fees to private companies being billed with our tax bills seems to escape them.
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Old Timer
Thanks for the explanation. I read the link that Jackie Lightfield provided and while I don't have enough familiarity with school operations to understand it all, it seems like the budget process within the School Board was extremely contentious. Maybe that is part of the reason that a number of cuts were assumed but never made.
Strange how Moccia the Moron went for the juggler of that girl that sent her child to Norwalk schools instead of Bridgeport. But now we have a 4 million shortage and Moccia the Moron is nowhere to be found...So So Typical . I would suggest that the police investigate this but as we all know they are incompetent..Maybe it's time the state police come in to investigate this matter.
rerbc
My guess is you have just made a fool of yourself once again.I would suggest you think before typing for a change
old timer
Its not Iwitherspoon making that comment, my guess is that it is Tim T (Notice it is Iwltherspoon)
Iwitherspoon
It seems the COO is responsible for managing BOE finances so they stay within the budget The present COO Mr Longo is credited with finding the problem and bringing it to the Superintendent's attention. He has only been in the job a short while and the budget was prepared two COOs ago by an apparently incompetent predecessor. Why the problem was not discovered a lot sooner is hard to understand, but the school system budgets are a lot looser than the City's and money is routinely spent on something other than what it was budgeted for. Moccia has been quoted as saying there were certain cutbacks promised that apparently never happened, but he, and the council, have no control over the BOE beyond approving a number, once a year, for the entire budget and then trusting that the budget will be followed. (not how anything is spent, but there will be no shortfall, nor request for more after the budget is set)
Without an audit, there is no way to know if this is a real problem or a game of chicken by school administration with a goal of bluffing more from the city I recall considerable optimism the formula for State funding would be revised this year, and some people in the school system may have been spending the anticipated windfall.. You don't want to hear my thoughts, if this is a game, but somebody would, at least, be looking for a job.
Funny how some people are not smart enough to understand that employee wages, benefits, and pensions are a cost of doing business. Unlike such items as toys for the failure of a police department ,,palm trees and planters. In hard economic times such as these that the Bush administration created, government needs to do only what is necessary and not the foolish extras
Ken P Jr
You are 100 percent correct. I it good to see a post on this site that makes sense ,unlike the other fools that blindly follow the failed Moccia administration.
Ken P
I agree with you that spending needs to be brought under control, but the problem isn't small items like palm trees and planters. The problem is, as you suggested, municipal employee wages, benefits, and especially pensions. If you have a look at the proposed 2012-2013 budget you'll see that the number of municipal employees went DOWN slightly - from 1,951 in 2011-12 to 1,948 recommended in 2012-13. However the cost of wages, pensions, and healthcare went up so much that the City needs to spend $11 million more this year than was spent last year. In other words, there will be three fewer people on the City payroll - which means three fewer people providing taxpayers with services - but City Government is still costing us $11 million more that it did last year. In my view that's unacceptable.
Old Timer
I did not post the comment "Strange how all these screw ups happen on Moccia's watch." If you look closely at the username you'll see that it's lwltherspoon instead of lwitherspoon. Someone has created a username close to mine in order to pretend to be me and confuse people. Maybe the person thought it would upset me - if that's the case, the person failed. I'm flattered that someone thinks it's a worthwhile use of time to try and impersonate me online rather than post something under the person's own name. Maybe the person is impersonating me because the person feels his own name is no longer taken seriously by anybody.
Most likely the person has resorted to impersonating and playing games because the person feels unable to make any compelling points of his own based on facts and logic, so he has simply given up. I hope you'll agree with me that the tactic being employed by this person is sneaky and underhanded and does not reflect well on this person.
Regarding me being critical of the Moccia administration - I should remind you that I was quite critical of the new 2012-2013 city budget which contained significant increases in spending, largely driven by contractual raises for police, firefighters, and teachers. When taxes go up in difficult economic times but we as taxpayers don't get any additional services, taxpayers are right to protest, in my opinion. When the new budget was publicized I pointed out in a comment on The Daily Norwalk that it was interesting that the Police and Firefighters endorsed Mayor Moccia in the last election, and now our taxes are going up to pay for raises for those same Police and Firefighters. I'm sure the comments are still there if you want to look them up. I have no particular allegiance to Mayor Moccia - at the ballot box I support candidates who work hard to save taxpayer funds, which is a really difficult thing to do when you're surrounded by hundreds of different interest groups, all of whom have some pet cause. I operate from the philosophy that City government exists to provide us with essential services at the lowest possible cost to taxpayers.
Here are some thoughts on the $4 million shortfall from the REAL lwitherspoon:
It sounds like there have been several failures by the people with direct responsibility for overseeing the school district's finances. I agree with you, Old Timer, that a forensic audit may be needed if it's the case that finances are so out of control that such a large shortfall doesn't show up until so late in the fiscal year. You know more about the structure of City government than I do - perhaps you can tell me who are the people with responsibility for watching the district's finances? I would assume Superintendent Susan Marks and the Board of Education's Finance Committee both play key roles. If so, both need to explain how this happened and what changes will be made to ensure that it never happens again.
We really need to stop playing games & focus on the NEEDS of Norwalk instead of its marketability.
New motorcycles for the police, Palm trees & new planters for the beach. New fancy lighting in certain touristy areas of the city ect, ect. And for the residents, disgraceful roads, underfunded education, no pier, broken unrepaired retaining walls at the beach ect, ect... What our city needs to do is reign in spending on nonessential things and very likely seriously consider if its not overpaying most people on the payroll.
Sue Haynie preaches total allegiance to Supt. Marks. That's what created this mess.
Iwitherspoon
I am amazed to see you saying anything critical of the moccia administration. For once, I am not suggesting moccia personally benefits from this mess, but I agree it does seem strange. There have been calls for the accounting for all BOE money to come under the control of Hamilton's office. That could be a good idea. If nothing else, there would be some consistency in how taxpayer money is used. I suspect there are legal problems with the concept, but it is worth exploring.
I still want to hear some explanation for the turnover in COOs. Now would be an excellent time for a forensic audit. Something smells a little fishy.
Apparently Sue Haynie described how this "oversight" happened at the time.
http://www.yourct.com/2011/07/guest-view-haynie-decries-rogue-norwalk-boe-budget-actions/
The more interesting story is why so many CFOs or COOs in quick succession ? Has anybody considered a forensic audit ? Is this another case of just poor accounting or is somebody building up an unauthorized retirement account ? Something does not sound right.