Norwalk finance committee hears FY25 budget status, special-education shortfall and FY26 gap

Norwalk School District finance staff told the Board of Education finance committee on March 13 that the district’s FY25 operating and food-service budgets are tracking near expectations but that special-education spending and next year’s operating gap remain the primary concerns.

Lunda Asmani, MPS chief financial officer, said the food services fund has an approved budget of $7,200,000 and is about 47% spent for the year, with major expenditures tied to the Chartwells contract and payroll for food-service staff. “This is looking at the food services fund from the expenditure side,” Asmani said. He added that the fund’s revenues come primarily from the U.S. Department of Agriculture school-lunch programs and that a planned transfer from the general fund — about $500,000 — has not yet been completed and typically is finalized at year-end.

Asmani reported that the district’s grant budget for the current year is just over $35,000,000 and is expected to drop to about $30,000,000 next year because roughly $5,000,000 in passthrough funding for early-childcare services will be routed through the city rather than the district. He identified two federal grants that come directly to the district: a $15,000,000 Magnet School Assistance Program (MSAP) award and a smaller marine-science grant; other grants arrive via the state.

On the general fund, Asmani said the district is about 60.9% of the way through its FY25 budget year and that roughly 75% of the operating budget is salaries and benefits. Salaries were about 5.9% higher year over year; the district reduced its benefits budget from $38,900,000 last year to $35,000,000 this year. Professional and technical services spending is at about 61% of budget and is roughly 30% higher year over year, driven in part by contracts for substitute coverage (through ESS), outsourced security, agency nursing staffing and third-party special-education services.

The committee focused on other student services — a line item budgeted at $24,200,000 — which Asmani said was nearly 81% spent midyear. He said the district anticipated being about $2,000,000 over budget in special-education costs. State supplemental “excess cost” reimbursement is expected to provide roughly $900,000 for the current year; Asmani said the state historically pays about 70% of eligible claims and that with the recent allocation the district expects to realize about 75% reimbursement. The district expects to receive the state funds in two tranches and was told the money should arrive before June 30, with an initial tranche around mid-May.

Looking to FY26, Asmani said the district faces a reconciliation challenge after receiving an allocation that left a roughly $14,000,000 gap between requested and approved amounts. “We are currently working with our schools… to come up with [a] reconciliation plan,” he said, listing positions and nonpersonnel expenses as the main levers under review. The district has a hiring freeze for nonessential positions and is pursuing grant opportunities but noted that about 85% of its budget is personnel, limiting options for cuts.

The capital budget also is unsettled. Asmani said the district requested $7,400,000 in capital projects while city staff recommended about $6.9 million for the Board of Education; the mayor recommended a similar amount. He told the committee there were discussions at the Board of Estimate and Taxation about lowering a citywide capital cap from $74,000,000 to $20,000,000, which would affect line-item decisions. The board’s capital line items will be considered by the Common Council’s Economic and Community Development Committee in early April; final council action follows.

Committee members asked about outsourcing decisions. Asmani said custodial and security services have been outsourced after analyses showed lower total costs compared with in‑house staffing; substitute-teacher coverage has been outsourced to a vendor in place for about five to six years. He also noted a recent agreement to accept private-school years of service for newly hired teachers, which reduces turnover savings because new hires now enter at higher salary steps.

The committee noted several upcoming dates: a Board of Education presentation to the Board of Estimate and Taxation on March 20, a public hearing on the operating budget on March 26, and the district’s appearance before the Common Council committee in early April. No formal votes on the budget or capital items were taken at the finance committee meeting.

At the start of the meeting the committee approved the minutes of its Feb. 12, 2025 meeting as submitted; no mover or seconder was recorded in the transcript. The meeting concluded with a motion to adjourn.

The committee’s discussion identified special-education costs and the FY26 reconciliation gap as items staff and board members said they will continue to monitor in coming weeks.