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District reports $427,330 general-fund deficit and warns of state funding shortfall
Summary
District staff reported a June year-end general-fund deficit of $427,330 (better than the forecasted $556,005.74), noted a Medicaid settlement contribution to revenue and said state funding for fiscal 2027 shows a decrease of $509,000; board members asked for a detailed August forecast showing the impact of prior personnel reductions and raises.
The Norwalk City School District received its June financial report at the July 14 meeting, where staff said the district closed the fiscal year with a general-fund deficit of $427,330, an improvement from an earlier forecasted deficit of $556,005.74.
Staff attributed part of the variation to bond-related interest and premiums (cited as $288,325 in interest that is restricted and therefore not spendable for general operations) and to Medicaid reimbursements and settlements that boosted revenue in the “all other operating” category (staff cited settlements of roughly $200,000 across periods). On the expenditure side, staff said salaries, benefits and purchased services (including utilities and special-education costs) ran over the forecast.
Looking ahead, staff told the board they expect fiscal 2027 to begin out of sync with tax settlements and that the state funding calculation posted for fiscal 2027 will reduce the district's state aid by about $509,000 due to updated cost inputs in the Fair School Funding Plan. Board members asked staff to include in the August forecast how earlier personnel reductions and retirements are reflected in the updated projections and to show whether the targeted $1 million decrease in overhead is being realized.
Members also discussed health-insurance costs and options. A staff member said newly hired employees moving to alternative plans (a wellness or premium-savings option) produce savings over time but that negotiated benefits prevent unilateral changes to existing employees' plans. A board member criticized the current carrier (HESI) and said the district should consider longer-term options, but staff noted any change would be a negotiated process.
The board did not take additional fiscal actions at the meeting beyond routine approvals; staff indicated they will present a detailed forecast in August.
