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Norwalk CFO reports $4 million preliminary FY25 surplus; proposes $3 million transfer to schools
Summary
Jared Schmidt, Norwalk’s chief financial officer, told the Common Council on June 24 that the city expects a preliminary FY25 operating surplus of about $4,000,000 without using fund balance and outlined proposed transfers and state aid affecting FY26 planning.
Jared Schmidt, Norwalk’s chief financial officer, gave a preliminary budget update on June 24, saying the city currently projects a $4,000,000 FY25 operating surplus without using the rainy‑day fund and that, if the $8,000,000 fund‑balance appropriation in the FY25 budget had been included, the city would be roughly $12,000,000 favorable.
“We would have a surplus of $4,000,000,” Jared Schmidt said, while cautioning that the budget is not final. He listed key revenue and expense drivers: a tax sale that brought in about $5,500,000; higher building‑permit and conveyance tax collections; and one large negative variance — an anticipated municipal grant of $1,800,000 that the city was not awarded.
On the spending side, Schmidt said vacancy savings and turnover in large departments produced significant savings. He also highlighted an OPEB (other post‑employment benefits) actuarial cycle: the city budgeted about $2,500,000 for OPEB contributions but needed only about $425,000, producing roughly $2,100,000 in savings because the OPEB fund is more than 100% funded.
Schmidt described a funding agreement for the Board of Education (BOE): $3,000,000 from the city and $3,000,000 from the state were included to finalize a board agreement, and an additional $500,000 was allocated from state money to support the BOE’s proposed special‑education reorganization. Schmidt said the $3,000,000 city contribution will be identified in specific FY25 salary line items and transferred through the Board of Estimate and Taxation (BET). “We will actually identify specific accounts from FY25,” he said in response to a council request for documentation.
The chief financial officer also described an internal service fund that covers employee health insurance, settlements and workers’ compensation. Schmidt said the BOE historically has not contributed to the settlements portion of that fund; as part of recent agreements, the BOE has agreed by memorandum of understanding to begin contributing to that component to reduce future city backfills.
Schmidt highlighted items not resolved in the FY26 budget: school‑resource‑officer overtime (estimated at about $500,000) is not included in the BOE request and the police budget is expected to absorb it; changes in Social Security and 401(a) contributions tied to collective bargaining will increase costs; and state municipal aid remains uncertain. He noted additional state aid secured by Senator Duff: $10,000,000 a year for FY26 and FY27 earmarked primarily for roads, plowing and related capital work, with the city seeking waivers to use some of the funds for other capital projects.
Council members asked for more detail. A member requested an email identifying the salary line items that will fund the $3,000,000 transfer; Schmidt said he would provide that detail and noted the transfer must be approved by the BET. Several council members cautioned that the reported surplus is preliminary and depends on year‑end receipts and expenditures; the city’s fund balance currently represents about 18% of the total budget, Schmidt said.
The presentation closed with staff noting the numbers are preliminary and that formal budget approvals and transfers will follow the required administrative and BET review processes. The council did not vote; budget actions related to the BOE transfer will proceed through the BET and a council vote is expected in the upcoming cycle.
