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VILLAGE MANAGER'S 2011-2012 PROPOSED BUDGET
March 17, 2011
Honorable Peter Swiderski, Mayor and Honorable Board of Trustees
Village of Hastings-on-Hudson
Municipal Building
Hastings-on-Hudson, New York 10706
Dear Mayor Swiderski and Honorable Board of Trustees:
I hereby submit for Board of Trustees consideration the 2011-12 Village Manager’s General Fund Budget that totals $13,005,157. At this spending level the budget would require an estimated tax rate of $236.14. Village estimated assessed values will dip to $41,513,238, a decrease of $447,615, represents a 1.1% loss in value.
The budget reflects a comprehensive review of all departmental operations and spending priorities. Given the loss of assessed values and the increasing reliance upon the property tax as the major source for funding the Village’s budget, several worthy programs for improved or expanded services were dropped from the budget. This is a disappointment to me given the strong arguments offered by the departments for funding. We realize that taxpayers are already burdened with state, town, school, county, and federal taxes. During the departmental budget process I reduced said requests in excess of $525,000. Village taxes, while small in comparison with other taxing authorities, offer the greatest potential for local control. We are sensitive to this and appreciate the support of Village taxpayers
in providing funds for the delivery of necessary municipal services.
The proposed budget translates into an overall increase of $376,420. This represents a 2.98% increase in expenditures and requires a 4.47% increase in local property taxes.
BUDGET OVERVIEW: EXPENDITURES
The Village Budget is more than a financial plan. It is an economic, social and community plan for the future. The budget establishes and sets the quantity of governmental service for an entire year and it puts in motion a future course of action. The budget is the single most important policy statement and management tool developed by public officials.
By general category, listed below are some significant aspects this budget proposes.
• Personnel Wages and Salaries: The budget provides for a yet to be agreed upon wage adjustment for members of Local 456 Highway Department Workers and those employees not represented by a labor organization.
• Materials: This budget provides an estimate for the uncertainties surrounding the purchase of motor fuel. We have developed numbers reflecting the total gallons used by the various departments. We’ve applied a 10% unit cost increase. As we get closer to the adoption of this budget, it will be necessary to re-examine this amount and be certain that the situations surrounding the cost for motor fuel has stabilized sufficiently to provide adequate funding for the purchase of diesel and unleaded regular fuel.
We anticipate a rate increase for the delivery of electric power while told to budget for a decrease in the actual purchase of electricity. The cost of water has risen with the recently awarded rate increase which included a dramatic increase in the cost for fire hydrant rental.
As mentioned, the Village’s assessed taxable property base continues to lose value. This means that even if we were offering a budget with no increase in any program, the budget would still require an increase due to this revenue loss.
Challenges by property owners through the tax certiorari proceeding, works to reduce the value of properties and hence the tax obligation. This effectively causes a shift to occur in the tax burden. Remember, the Village needs to raise money to provide public services, the goal is to have the basis of that payment fairly appropriated among the various classes of property, any change causes the amount owed by some to increase, while others to go down. In last year’s message I noted that without growth in the value of property (land and buildings) the only viable source for revenue is the property tax. This discouraging trend will have increasingly chilling consequences upon our ability to expand services, hire necessary workers and continue to improve upon the quality of life in the Village. Increased taxes will have a disproportionate negative impact upon property owners as the local tax becomes over- burdensome and consumes a greater portion of disposable income. In the short
term this statement depicts the situation in the Village.
This year’s budget has presented unique challenges. In particular there are several expenditure and revenue items which are out of the immediate fiscal control of the Village. Specifically these include: pension contribution and medical insurance coverage. The budget requires an increase in contribution to fund the various pension plans. Last year we budgeted the full amount, and it was adjusted downwards. The cost to provide medical health insurance requires an increase in premium contribution in the amount of $125,000.
The Village is also faced with declining mortgage tax revenues, specifically this source of revenue has been reduced downward by $10,000 and the sales tax is anticipated to realize $50,000 more next year from that which we anticipated to secure this year.
BUDGET OVERVIEW: REVENUES
Staff is constantly on the lookout evaluating and monitoring the fee structure and pricing for specialized services and penalties levied for law violations. During the course of the year, we will be recommending to the Board of Trustees suggestions for increasing several of these fees and services.
We continue with the conservative philosophy of projecting revenues based upon trends and expectations of what the future holds. We have witnessed sales tax receipts stabilization and, consequently, we anticipate an increase over the near-term. We do not see an increase in the mortgage tax revenue.
The Village has joined with neighboring communities with a commitment to seek out cost-cutting measures. These include subcontracting services and joint purchasing of products and materials used in municipal operations. Efforts are currently underway to explore the feasibility of consolidating services with neighboring communities as we aggressively pursue means to both improve and reduce the cost of delivery of services. The New York State Office of the Comptroller, in its report comparing cost for services, places Hastings-on-Hudson favorably when compared to neighboring communities. We realize there is still room for improvement in reducing the cost of the services provided to our residents.
Potential savings will continue to be the focus of operations. Development of a long-term strategy to strengthen and expand the tax base must continue to be part of an overall economic development effort. The Village has been hamstrung in the ability to realize revenues other than property tax because of a heavy dependence upon mortgage and sales taxes as to the critical source of revenue to operate.
When the budget was adopted last fiscal year, Board of Trustees agreed with the staff recommendation that hard realistic decisions were needed in terms of projecting anticipated revenues. Because of that approach Hastings on Hudson is in a better position when compared to neighboring communities in the current fiscal year. This conservative sound approach toward estimating revenues worked to our advantage, in a difficult financial environment. This year we have continued that approach by taking a critical look at revenues by anticipating a continuing downward trend.
Special Project
Contained within the operating budget are funds intended to cover the cost for the second phase of the drafting of the Comprehensive Plan. The Board of Trustees approved the initial award of the contract to Phillips Preiss Shapiro Association for the writing of the Plan. The additional money is requested to complete that portion of the project requiring environmental review of the Plan.
Capital projects
Other Capital improvement projects which would normally appear in the operating budget for funding are currently being prepared for Board of Trustees consideration as a bond anticipation note.
During the course of FY12, the Board of Trustees will be presented with a list of capital projects. These will include the purchase of dump trucks for the department of public works and parks department. The Village has held off purchasing heavy equipment in these two departments while focusing attention on addressing the capital needs of the fire department. These purchases are necessary and need to be considered. Additionally, we are looking to purchase three, four-wheel drive vehicles. These would be assigned to the Superintendent of Public Works, the Fire Chief and the Police Department. The legal office also advises that, during the course of the next fiscal year, we should anticipate a payment of $150,000 for tax certiorari matters.
New to the list of capital projects is removal and replacement of the underground fuel dispensing system currently located at the Department of Public Works garage. This has been a matter of investigation by the County and has been determined that, while the tanks are not leaking, they are aging and are required by federal law to be replaced. The estimated cost of the capital project could reach $170,000.
The list also includes relocating the Police and Fire Department emergency radio system from its current location on the rooftop of Andrus nursing home to another location at the same facility. The project is planned to be funded over two budget cycles. Last year funds were included in the amount of $10,000 to initiate the work in the Fire Department budget. It appears this project will cost in excess of that, and plans include another $10,000 in the budget for this year. At this time, a cost estimate has been developed, and it could reach $70,000. It is possible that if the cost exceeds an amount reasonably accommodated in the operating budget, then it would be necessary to include this project in a bond anticipation note as well.
While exploration continues to determine the feasibility and advisability of combining public works operations with another municipality, the fact remains that the heavy equipment needs are at a point where we can no longer delay vehicle replacement. If we fail to address the underground fuel storage system, the Village could face federal fines.
The total cost of these proposed capital projects will be in the vicinity of $850,000.
Closing Comments
With the deterioration of the tax base and the heavy dependence upon external revenue sources, we must rely upon the willingness of Hastings tax payers to support the service levels and spending priorities we have traditionally provided. Relief will come about when the economic turn-a-round arrives. In the short term we should not take apart sound programs because of this changing economy.
Successful communities, during this period of economic turmoil will seek out ways to build sustainable programs. The time for creative thinking has never been more evident than now. Hastings-on-Hudson has fashioned budgets in the past that have relied upon uncovering ways to continue and improve the quality of life for everyone. The goal now is to continue that approach and ensure that as the economy rebuilds this community will continue to be a place where people can afford to live, raise families and enjoy the many municipal programs and amenities offered. The next twelve months truly presents that challenge as we aggressively uncover funding sources independent of the property tax to ensure that programs do not suffer because of the diminution and inability of the economy to offer revenue sources we
have become accustomed having available to us.
Many persons are owed a note of thanks for the skillful and conscientious manner they went about the task of developing the budget. Each department prepared a financial plan based upon their needs, with a sensitive awareness of the difficult financial straits the Village is operating. Numbers were checked for accuracy and completeness. Any error found in this document is my responsibility. The Department Heads and I stand prepared to discuss the budget’s financial and service level implications during the scheduled Public Hearing. Staff is prepared to make sure the Board of Trustees receives the quality information needed to set priorities, make judgments and choose among alternatives.
Respectfully submitted,
Francis A. Frobel
Village Manager
Village of Hastings-on-Hudson
7 Maple Ave, Hastings-on-Hudson, NY 10706
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