Democratic and Republican Strategic Planning Organizational Committee for Capital (DR SPOCC)
Councilman Mike Coffey
Mar. 18, 2007

The residents of the city understand that we are currently not handling our capital infrastructure in a smart manner. I believe that the Common Council needs to create a committee that will look at long term strategic capital planning for the City. That is why I am advocating the establishment of DR SPOCC and hope that the residents will support its creation. DR SPOCC will hopefully alleviate these daunting problems. DR SPOCC will be on the agenda at the next Bipartisan Council meeting on March 27, 2007.

The past year we have watched the City further decay, with crumbling road, disintegrating sewage pipes, and backed up storm drains. If we fail to pay attention to our infrastructure, we will surely pay more in addressing these problems in future years. I call on all of our elected officials to be courageous and immediately look at our most pressing needs in spite of the potential political ramifications.

The key to successful management of capital infrastructure (including vehicles and equipment) is programming moderate yet adequate annual funding for maintenance, repair and upgrades to infrastructure and for rotation of equipment and vehicles into and out of the City’s fleet. Due to the current state of the City’s infrastructure, one can safely assume that such a management approach has not been past practice and the City is now facing huge capital needs in virtually every area. At this time, re-establishing moderate annual funding will not address the bow waves of capital needs AND facilitate the sound continuous management of infrastructure. The City has recognized the needs in its school facilities and invested in addressing those needs. Unfortunately, the intensity of the schools renovation program precludes the City from addressing other capital needs in any focused and serious manner. As the city has addressed the schools capital needs, it has failed to fund our other capital needs for much of the last decade. This unbalanced approach will lead to long term problems and increase our need for future spending.

The capital budgeting process lacks a cohesive and comprehensive approach that is based on priorities that only the Common Council can establish. Currently, priorities are established only within (not among) department requests and departments are in aggressive (and sometimes adversarial) competition for capital funds (not to mention operating funds). Some departments are attempting to find reasonable approaches to meeting needs, some departments ask for everything (and often get it because they have learned how to play the latest emotional and/or political crisis) and some departments have simply given up and ask for nothing. Consequently, the knowledge of the Mayor, the Board of Estimate and Taxation (BET) and the Common Council as to the capital needs of the City is informed more by the media and the Finance Director (who may know finance, does not have a day to day understanding of the operations and urgencies of the affected departments) than any other credible source. Too, the City’s two-year election cycle drives a very short-term focus, as opposed to the longer-term focus that is required to adequately address the City’s capital needs.

A systematic and workable approach may be as follows:

1. Charter an entity to take on the responsibility of presenting to the Common Council a recommendation for addressing the City’s capital needs over a designated program period (must be at least five years but not more than ten years). Such an entity could be:
   1. An established committee of the Common Council.
   2. A “Blue Ribbon” commission or committee comprised of residents and members of the BET and Council.
2. Require every entity that has capital needs to develop two documents. The first document would be a five-year plan of capital expenditures. This will not be a particular challenge for those departments that already manage on five-year plans; for others, this will be a significant challenge. The second document would be a simple list of other capital needs that the department knows will exist in the six to ten year time frame; this list will not be designated to a specific year but would be expected to feed the new fifth year of each five-year program as each first year is satisfied. Again, this will be a new challenge for some departments.
3. Demand that departments justify, in writing, the need for the capital request. This demand must require analytical evidence of the need for the request, i.e., what gain is achieved (or crisis avoided) by each annual expenditure, what are the risks if the requested funding level is not appropriated, what can the department do to minimize those risks, and what alternatives exist (and the cost of the alternatives). If analytical evidence is not presented, the request should be denied.
4. At the recommendation of the Committee, the Common Council establishes a five-year plan for capital budgeting. This five-year plan becomes the road map for developing the annual capital budget.

I have some additional thoughts on how to make such an approach successful:

1. The Council must make some tough decisions on what is to be funded. Although every request may have merit and offer an opportunity to be “politically correct,” the effectiveness of funding at a somewhat meager level must be questioned. The White Barn Theater property is a case in point. The City has been funding the Open Space fund at roughly $25,000 per year; this is woefully inadequate, and there is currently less than $300,000 in the fund. One of the potential objects of the fund has been the White Barn theater property, currently valued at over $4 million. At the rate at which the City has invested in the fund, it would take 160 years to grow the fund to a point where it could acquire the property. The Council must seriously question the wisdom of such an investment in the face of all the other significant issues facing the City, or increase te commitment to this objective if it is found to be a priority by DR SPOCC.
2. There are numerous entities, not normally thought of as City departments that must be considered in the process. Some (not necessarily all) examples include:
   1. The Board of Education. Beyond school facility renovations, the schools have capital needs, such as information technology. Given the recent history and current management, every Board of Education request must be scrutinized in great detail by DR SPOCC.
   2. The Water Pollution Control Authority (WPCA). Although an enterprise authority, the WPCA is not completely independent from the City. Although the WPCA has an independent source of revenue, it has no independent bonding capacity and must therefore borrow under the City’s bonding umbrella. The revenue streams reasonably available to the WPCA will not facilitate addressing the significant infrastructure needs it faces in the foreseeable future.
   3. The Parking Authority (PA). Although an enterprise authority, the PA is not completely independent from the City. Although the PA has an independent source of revenue, it has no independent bonding capacity and must therefore borrow under the City’s bonding umbrella. The revenue streams reasonably available to the PA will not facilitate addressing the significant infrastructure needs it faces in the foreseeable future.
   4. The Historical Commission. This body is charged with maintaining at least 14 historical buildings, yet it has no resources with which to accomplish this maintenance. Consequently, these historic structures are just “rotting in place.” DR SPOCC needs to address this serious issue.
3. The City must openly, creatively, and aggressively seek more new and alternative ways to address its myriad capital needs. Some (not necessarily all) examples include:
   1. Bonding. The City has traditionally issued, and continues to issue, 15-year bonds generally in the belief that maintaining this policy ensures a continued AAA rating by the bonding agencies. Connecticut law allows 20-year bonds and, by exception, up to 40-year bonds for wastewater system infrastructure projects. In terms of absolute dollars, the City will pay more in interest over the life of a 20- or 40-year bond than on a 15-year bond. However, on an annual basis, interest payments (in absolute dollars) would be lower, thus allowing the City to accomplish more with available funds and even borrow more. Many communities with 40-year paper on the street also enjoy AAA bond ratings. Beyond the terms of its revenue and general obligation bonds, the City must harbor some concern over how the rating agencies determine the ratings to be applied to Norwalk’s bond issuances. In recent years, the City has visited the agencies in New York City and hosted agency visits to the City; these visits have typically included helicopter tours over the City, boat tours of the harbor and lunches and meetings at such establishments as Dolce Conference Center. These agencies are also interested in how infrastructure is managed and one day will ask to see it. This may be the greater risk to the City’s AAA rating.
   2. Corporate sponsorships. Norwalk is home to a number of large and successful companies, most of whom expect to be asked to contribute to local programs. Yet it does not currently appear that such invitations have been extended. These invitations must given to our community leaders and their respective companies. This could potentially be a source of funding for all of the needs of the Historical Commission, for example.
   3. Grants and earmarks. Until very recently, the City has pursued little, if any, of the billions of available dollars. Fortunately, the current Mayor has addressed a past shortfall and has hired a grants coordinator. The City must place continuous and persistent demands on all elected officials at the state and federal levels. A focused approach must be adopted to ensure that our entire local, state, and federal delegation work cohesively and in a bipartisan manner to deliver for all of the city's residents.
4. There is a direct connection between operating and capital budgets. Beyond just the funds allocated, the programs conducted by each department for maintaining and repairing infrastructure are operating programs. The Council should demand that department heads outline in detail how they manage infrastructure maintenance and repair so that maximum useful life is extracted from existing infrastructure and future capital needs are minimized or extended. The Board of Education offers a perfect case in point. In the past year, numerous students, parents, administrators, even the superintendent, have spoken at Council meetings expressing concern over such issues as one third of the computers being inoperable, wall lockers falling off the wall, crumbling and broken stairs, lights falling out of the ceiling, inoperable heating and air conditioning, etc. If these accounts are to be believed, there is no facility maintenance occurring at the City’s schools and five years from now the $200 million the City is spending will have been wasted because the facilities will be in the same condition they are today. The Council, and if created, DR SPOCC, must demand evidence of a viable infrastructure maintenance program.

As I have outlined above, these are serious issues that need to be faced by all of our elected city officials. I will bring this issue up at the next bipartisan council meeting on March 27, 2007. The meeting will be held at City Hall at 7:00 PM in the Common Council Chambers located at City Hall. I ask that all residents support the creation of DR SPOCC for a brighter future for all of the residents of our city.

FOR MORE INFORMATION CONTACT:
MICHAEL COFFEY
(914) 462-2542 cell
(203) 849-9404 home


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