STAMFORD – The six elected members of the Board of Finance, who control the city’s purse strings, pulled them tight Thursday night.
The board began its meeting by reiterating bits of bad news for taxpayers.
First fiscal outlook
A deficit of nearly $9 million is looming for the Board of Education. Known as “the fiscal cliff,” it came about after the school district used one-time federal COVID-19 relief money to cover 120 salaries.
The COVID funds run out next year. To keep people in those jobs, school officials will have to request most of the money from city taxpayers.
Board member Laura Burwick asked Ryan Fealey, finance director for the schools, whether the state will relieve any of the burden. Fealey said Stamford is expected to get $1.5 million from Connecticut’s Alliance District program for low-performing schools, but that’s it for 2024.
Beyond the fiscal cliff, Fealey said, the district faces higher costs associated with an increased enrollment of special education students and English Language Learners, plus a new bus contract.
“So you’re looking at a school budget increase of 6.7 percent,” finance board member Dennis Mahoney said. “Can we ask the Board of Education to come back with monthly updates for how you plan to tackle that enormous increase in the budget? I think the Board of Finance should engage the Board of Education in a discussion on this … because we’re looking at a hefty tax increase.”
Second fiscal outlook
Something else will fuel a tax increase in 2024.
The city and the Board of Education have undertaken a $1.5 billion plan to reconstruct or renovate 18 schools.
The state is contributing tens of millions of dollars, but to cover its part, the city is putting money away.
Last year the Board of Finance proposed, and the Board of Representatives approved, a tax increase that raised $20 million, the initial deposit in a school building fund.
City officials did it again this year, increasing taxes enough to raise $15 million for the fund.
They’ve expressed intent to generate more tax revenue for the fund in 2024.
Third fiscal outlook
On July 1, Stamford homeowners got property tax bills that increased an average of 4.3 percent, more than the usual annual amount.
The tax hike would have been less than half that amount if not for a state-mandated property revaluation. Stamford’s was conducted during the coronavirus pandemic, which brought about a home-buying spree that pushed prices through the roof.
The new property valuations were so high, 25 percent more for the average single-family home, that city officials phased them in over two years.
Phase two of the revaluation will boost property tax bills again in July 2024.
Under the anticipation of rising costs and tax levies, an important item on the Board of Finance agenda was scratched.
The city’s 2022 state-mandated annual audit, which is 11 months late, was supposed to be reviewed and perhaps approved.
But it’s not finished. It’s so late that the 2023 audit is due in a month, meaning that audit also will be months late.
The city’s new director of administration, Ben Barnes, told finance board members last month that he would have the audit report by Thursday’s meeting.
Barnes, who took his post in September, said Friday he anticipates that the report will be released soon.
“There have obviously been significant delays with this report and the city is committed to addressing the various technical and organizational factors that have made it so late,” Barnes said.
The delay has raised concern all year. Besides the state, the banks and credit rating agencies have been questioning why the city does not have its financial reporting in order, Mary Lou Rinaldi, chair of the finance board’s Audit Committee, has said.
Rinaldi has cited the tax department for not regularly reconciling accounts, which she said “affects everything.”
In September, an executive officer with the Connecticut Office of Finance wrote a letter to Stamford Mayor Caroline Simmons saying “the lack of timely audit reports is a serious matter and potentially a warning sign of financial challenges.”
Barnes said his priority is to complete the 2022 report and ensure that it is accurate. It “will show Stamford’s growing fiscal strength and surplus operations, and will support our triple-A ratings,” Barnes said Friday.
So far the city has paid its auditor, RSM, at least $430,000 to prepare the financial report. Last month the finance board agreed to transfer $75,000 to the controller’s budget to hire another auditing firm, CliftonLarsonAllen, to help. But still no audit.
Given all that…
It may not be surprising then that members of the Board of Finance Thursday refused to vote on two city employee contracts and rejected a third, saying the costs were not well explained or just too high.
The finance board reviews union contracts and sends its recommendations on to the Board of Representatives, which may approve or reject them.
One contract up for review involves the 128 employees of the Stamford Municipal Supervisory Employees’ Union, known as the MAA. The three-year agreement will cost the city $540,606 this year, plus nearly $2.7 million for the out years, Human Resources Director Al Cava said.
The city and the union reached terms that would require that union members contribute .5 percent more annually toward their health insurance for two years, Cava said, and they will get 3 percent raises for each of the three years.
But finance board members said some MAA members got significant salary upgrades earlier this year, when their positions were reclassified. They said they were concerned about the number of reclassifications and the size of those salary hikes, which the Simmons administration implemented outside the regular budget process.
“So MAA employees got an increase then, and now 128 MAA employees are getting an increase of more than a half-million dollars,” Rinaldi said.
The board voted unanimously to hold the contract until Cava gets them more information about the earlier salary upgrades and what they cost.
Police pension questions
Board members then went through the city’s pending four-year contract agreement with the Stamford Police Association.
Like MAA members, police officers will get raises that average out to about 3 percent a year, and will contribute .5 percent more annually to their health insurance.
Because the existing contract expired a year ago, the city would give the police union about $1 million in retroactive pay raises, another $2.2 million to cover raises in 2023, plus roughly $7.8 million to cover 2024 and 2025.
Finance board members had many questions about the pension benefits, which Cava called “the big item.” Under the existing contract, “a staggering amount of officers are getting disability pensions at a very young age,” Cava told the board. “It’s a substantial burden on the pension fund.”
He explained how the system now works. An officer who injures, say, a shoulder, goes to the workers compensation board and gets assessed, Cava said. If the board determines it’s a 5 percent loss of body function, that goes in the officer’s record.
If the officer later injures a hand and that loss of function is rated at 10 percent, the officer then has a rating of 15 percent.
“When you hit 30 percent, you’re eligible for disability retirement,” Cava said. “But we have officers who are at 30 percent and still working. If you can work at 30 percent, what does that tell you? When you look at the number who are getting disability pensions, it’s crazy.”
In exchange for removing the 30 percent rule from the contract, the city agreed to an annual 1 percent cost-of-living increase for officers with at least 20 years of service, Cava said.
Board members said they could not make a recommendation on the contract without an analysis of that cost, as well as costs associated with the creation of two ranks, detective and master police officer.
They requested further information on officers’ ability to earn compensatory time, then voted unanimously to hold the contract until their next meeting.
Firefighters’ pact rejected
Board members took their strongest stance on the proposed agreement between the city and the Stamford Professional Firefighters Association.
That contract expired in 2019 and negotiations have been going on since January 2020, Cava said.
“This is a very expensive contract,” said the finance board chair, Richard Freedman.
As most other city unions have already done, firefighters on Jan. 1 will migrate to a less expensive state health insurance plan, which will save the city $3.2 million over the life of the new contract.
Wage increases begin with .5 percent in 2019 and reach 3.1 percent this year and again next year.
Because the contract was unsettled for so long, the amount of the retroactive wage increases is significant, nearly $7.4 million. The cost of wage increases for fiscal year 2023-24 would be about $4.5 million, for a total of $17.4 million in wage increases for the life of a new contract, which would expire in 2025.
The term in the proposal that got the most attention from the finance board would double the number of deputy chiefs, and their aides, on duty at any given time. It would cost about $1.1 million more each year, Cava said.
Now there are four deputy chiefs and four aides, one set per shift. Under the new contract, four more deputy chiefs and four aides would be added so there would be two sets per shift, Acting Fire Chief Rex Morris and Assistant Chief Mike Robles told the finance board.
The chiefs said the additional deputies are needed to improve response time. It’s six minutes, on average, for engine and ladder companies, though higher for North Stamford, they said. But the response time is twice that for deputy chiefs, who are stationed at Central Firehouse downtown and have difficulty reaching many points in Stamford, Morris and Robles said. The city is geographically large at about 39 square miles, they said.
“Every other city of our population size, and smaller, has two deputy chiefs on duty, and most of them are half our area,” Morris said. “No other city in the state has these distances to run.”
Deputy chiefs are crucial because they take command of a fire scene, determine firefighting tactics, enforce safety protocols, and manage all responding fire companies, Robles said.
The aide drives the deputy chief to the scene, which allows the deputy chief to “pre-plan his attack” on the way, Robles said.
“He figures out which companies are responding, where the hydrants are,” and other matters, Robles said. “Then once they get there, his aide helps set up the staging area, talks back and forth to dispatch, and contacts the power company while the chief is moving his people.”
The system works, Morris said – earlier this month firefighters knocked down a fully engulfed Springdale house fire in 20 minutes.
But Freedman focused on the finances.
“When you estimate the cost of these eight positions at $1.1 million a year … it does not include health insurance or pensions, which are 30 percent of salary … and it does not include overtime,” Freedman said. “So the cost is probably going to be closer to $2 million a year.”
He and other board members said they want numbers, not anecdotes, to justify the significant costs of the proposed contract.
“We need more on the math and the metrics to prove this case, other than, ‘We want it because everybody else has it,’ or, ‘We can do better,’” Mahoney said.
“I find it bothersome,” Freedman said, that the firefighters union did not agree to reduce wage increases, as other unions did during the financial uncertainties created by the pandemic, and did not switch to the cheaper state health insurance plan earlier.
Now firefighters would be “getting a better deal than other unions and adding eight positions,” Freedman said. “I don’t see how this contract is beneficial to the city. This has been a series of beneficial agreements for the firefighters union … it seems very lopsided.”
The finance board voted unanimously to recommend that the Board of Representatives reject the proposed pact. If they do, the firefighters’ contract, nearly four years in the making, goes back to the drawing board.
This story has been updated to clarify contract figures