Village of Hastings-on-Hudson Proposed 2017-2018 Budget

VILLAGE OF HASTINGS-ON-HUDSON

PROPOSED 2017-2018 VILLAGE BUDGET

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March 10, 2017

Dear Mayor Swiderski and Honorable Board of Trustees:

I hereby submit for Board of Trustees consideration the 2017/18 Village Manager’s General Fund proposed budget that totals $15,085,454. At this spending level, a tax rate of $6.27 is required. That represents a 2.1% tax levy increase. The Village property value assessments are estimated to reach $1,721,032,359. This budget, if adopted unchanged would require a tax levy of $10,796,010. The budget is in compliance with state law setting the levy because of the unused tax levy capacity carried forward from this year’s tax levy and assessment growth. Under these regulations, Hastings-on-Hudson’s tax levy is allowed to reach $10,959,061.

This budget reflects the application of the 2016 Town assessment roll. This is the first year in which the Village has relinquished its property assessment function and now relies upon the values resulting from the town wide revaluation. Due to that transition, it is difficult to precisely calculate the increase in the property tax rate when compared to last years. Based upon increasing the Village’s 2016 assessment roll of $42,897,899 and applying an equalization rate of 2.86%, we are of the opinion that the proposed tax rate compared year to years reflects a 3.31% tax decrease.

A word of caution is advised. Individual property owners need to test this statement by comparing the old property value against the new value and applying the applicable tax rate for the two years.

As stated for the FY18, the general fund budget is in the amount of $15,085,454 (includes the library fund in the amount of $902,593) is recommended. This budget proposal represents a 2.52% increase over the current year adjusted budget of $14,714,117. The functional breakdown of the expenditure and revenue statements for the proposed FY18 budget is contained in a series of exhibits in the complete budget document. For a taxpayer with a home assessed at $642,474 (average assessment), this spending plan would require a $140.00 annual property tax decrease.

Revenues

The budget reflects the projection that non-property tax revenues will experience growth and indications are that the state and county economy is strengthening and consequently can expect to see a continuing shift from dependence upon the property tax to other sources of revenue. Our analysis indicates that we can expect an increase in sales tax ($100,000); building inspection fees ($25,000); and steady mortgage tax receipts ($20,000). These revenues indicate a greater reliance upon non-property tax receipts.

Quarterly sales tax proceeds over the past several budget cycles now are in excess of the levels municipalities realized prior to the recession while the mortgage tax has not yet fully recovered. It is however showing a healthier rate of receipt then realized several years ago.

Locally generated revenues will continue to be examined as we research the appropriateness of increasing them to cover the cost to provide specialized services. Presently, staff is looking at the rate charged for annual parking permits and hourly on street meter rates, along with code violation enforcement penalties and building permit fees. The goal is to have the end-user, or violator cover the cost to provide the service.

The Village’s outside independent auditor has affirmed the unassigned fund balance as of May 31, 2016 at $1,824,320. This demonstrates steps taken to increase the fund balance to guard against future unanticipated expenses. This budget does not require a budgetary transfer from the fund balance to the operating budget.

The Board of Trustees has funded the capital reserve fund from the unassigned fund balance in the amount of $200,00. This payment placed in the reserve, will be available for off-setting capital equipment or project funding requirements. The goal is to have available surplus funds to reduce the dependence upon the need to borrow money to pay for the equipment or project. The task is to continue to navigate our way to a position of fiscal strength to have in reserve a fund balance in excess of 10% of the operating budget. Municipal credit rating agencies require a greater percentage in a reserve fund and while that is the ultimate goal, we are working to increase the fund incrementally.

The approach to revenue development will continue to be cautious and conservative. It is risky to project locally generated revenues aggressively. The danger of revenues falling short causing a deficit position is too great a danger to pursue a policy of over optimistic revenue projections.

The State of New York Comptroller’s Office has developed a matrix to determine the level of fiscal health among municipalities. Hastings-on-Hudson has been categorized with a low fiscal stress score which is good. The area we need to show continuing improvement is the ratio of fund balance to operating budget. Additionally, Moody’s Investor Services (Village rating of Aa3), as part of their continuing monitoring of local government financial conditions, in their most recent annual comment on the Village finances indicated that despite the moderately sized tax base, light debt burden, a mid-range pension liability and reflects a favorable financial position. They did caution, however, that the governmental operations are approximately break even, but has a balance financial operation indicating sound financial management.

Expenditures

As noted, the budget continues the delivery of municipal services which Village taxpayers expect. Staff went about the process of developing next year’s spending plan with a sensitivity to maintain a low property tax rate increase. Improved productivity and enhanced delivery of services has been and will continue to be the commitment of Village municipal employees.

Toward that goal, the operating budget reflects an overall increase of $371,336 or stated another way a 2.52% increase when measured against the FY16 budget. We have been able to keep that increase low while addressing necessary personnel and capital outlay needs because of growth in the assessed values and increased non-property tax revenues.

The budget reflects converting two part-time staff to full-time positions and places an emphasis on needed capital outlay repairs which have been delayed over recent fiscal years due to financial constraints. Even though these trends are now beginning to reverse, we continue to exercise a conservative approach toward the restoration of job positions. In other words, besides creating a full-time position in the Treasurer’s office and the Parks and Recreation Department, other operating departments offered convincing arguments for additional staff which were denied.

Municipal Building.

The budget includes funds ($10,000) for the additional repairs to the heating system which serves Village Hall and the Library.

Parking Plaza Pay Station

Included in the budget is placement of two parking meter pay stations ($20,500); one at the ConEd commuter lot and a second one at the Boulanger Plaza.

Police Department

Contained in the operating budget capital overlay is the purchase of one (1) truck mounted plate reader, two cameras ($11,500).

Road Resurfacing Program.

The budget includes funding ($275,000) to continue the annual Village wide road resurfacing and curb program. The basis for the decision on which roads should be resurfaced will be determined as a result of the comprehensive village roadway engineering study which was commissioned last year. The results of this report serve as the basis in the development of a multi-year plan to determine where financial resources should be placed in the decision-making process for infrastructure repairs.

Utilities.

Costs continue to be a matter for concern. We have been instructed to anticipate a 9.5% overall cost increase for both the purchase of electricity and the delivery charge. The cost for natural gas to heat village facilities is anticipated to remain stable. While motor fuel and engine lubricants costs have declined of late, there is still uncertainty as to what we can anticipate in terms of the product cost during the term of the fiscal year.

Streetlights.

The complete conversion of all streetlights, with the exception of the downtown decorative lamps is complete. The budget account includes payment for the capital investment for the street light conversion. This is a multi-year financial arrangement whereby the cost for the capital investment will be offset through the savings in the electric bill.

Personnel Costs

This budget reflects a reduced obligation in the amount required to contribute to the employee pension plan. This plan administered by the State of New York when considered in combination with the Length of Service Award Program provided to the Village volunteer firemen has seen dramatic increases over past fiscal years. This is the lowest required payment recently witnessed. We have been advised to plan for a 9.1% increase in the cost to provide medical/dental healthcare insurance coverage. That also reflects a smaller cost rise than we have experienced in recent budget cycles (the healthcare rate increase was 12.1% on January 1, 2017). The budget reflects wage settlements for the police officers and a proposed wage adjustment for the DPW employee groups and recommends a similar cost-of-living increase for the non-union employees.

Debt Service

Sound decisions were made to refinance and call bonds during the past fiscal year which yielded savings in the cost to borrow previously issued authorizations.

The Village total debt includes library and pool service payment ($985,904) remains stable with the addition of the payment for the bond anticipation notes ($64,345) soon to be issued to cover the cost of heavy equipment, capital projects and firefighting apparatus purchased during the previous fiscal year.

Capital Improvement Budget

Trustees during the course of the fiscal year will be asked to update the five-year capital improvement plan. At the time of this writing, we anticipated recommending consideration during the course of FY18 the following items: Police Department firing range ($71,271); sanitation vehicle ($217,000); Village Hall window replacement; and Fire Chief vehicle ($60,000).

Contingency Account

Traditionally the Village has maintained a small contingency account within the general fund budget. This year the contingency account ($147,000) includes tax certiorari settlements and salary adjustments.

Closing Comments

I want to close this letter of transmittal by thanking the department heads for the conscientious job they took in the preparation of the department budgets. They are the front-line in the delivery of public services and are in the best position to recommend the level of funding necessary to continue the mission of their operation. The management team stands ready to present this budget during the scheduled public hearing to be held March 21, 2017. We also look forward to the examination by the Board of Trustees during scheduled budget workshops leading up to adoption budget no later than April 28, 2017.

On behalf of Village employees, I wish to thank the Trustees for their support by providing the necessary resources to ensure the highest level of public service we can offer to insure the quality of life for the community.

Very truly yours,