March 18, 2010
Honorable Peter Swiderski, Mayor and Honorable Board of Trustees
Village of Hastings-on-Hudson
Hastings-on-Hudson, New York 10706
Dear Mayor Swiderski and Members of the Board of Trustees:
I hereby submit for Board of Trustees consideration the 2010-11 Village Manager’s General Fund Budget that totals $12,934,459. At this spending level the budget would require an estimated tax rate of $233.38. Village assessed values dipped to $41,952,385 experiencing a decrease of $319,318.
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 additional funding, but I 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 $344,430. Village taxes, while small in comparison with other taxing authorities, offer the greatest potential for local control. We are sensitive to this condition and appreciate the support of Village taxpayers in providing funds
for the delivery of necessary municipal services.
The proposed budget (general fund, library, pool, and Draper Park) translates into an overall increase of $410,517. This represents a 3.2 increase in expenditures and requires a 7.9% 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. The budget also provides for
undetermined wage adjustment for members of the Police Department (represented by the Police Benevolent Association). The Village and the police union have not reached agreement on a successor contract which expired May 31, 2009.
We are exploring the feasibility to supplement financial operations through the use of part time, or on call support. This position would be established to assist in transitioning the part-time treasurer out of financial oversight responsibilities.
BUDGET OVERVIEW: REVENUES
As mentioned, the Village’s assessed taxable property base experienced a slight loss. This means that even if we were offering a budget with no increase in any program, the budget would still require an increase because of the 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 service, 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 other classes 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 overburdensome and consumes a greater portion of disposable income. In the short term this statement depicts the situation in the Village.
While residential development on Route 9A was approved, building permits have not yet been issued. While approval was provided for the rehabilitation of 555 Warburton Avenue was granted, only an interior demolition permit has been provided . The vision needed to pull out of this financial restriction is necessary, but there is no relief near-term. The waterfront holds the greatest potential for strengthening the economic health of the Village, but that opportunity is into the future.
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 a $240,000 increase in contribution to fund both the police, civilian and fire department pension plans. This increase alone represents a tax increase of 2.6 percent. The cost to provide medical health insurance requires an increase in premium contribution in the amount of $38,000 and the payroll tax (Social Security and MTA tax) requires an increase of $96,000. These three items alone represent an increase in the budget of $407,000 when compared to last year’s appropriation. However, overall the general fund budget is suggested to increase $403,067 or
3.2% due to steps taken to reduce expenditures.
The Village is also faced with declining sales tax and mortgage tax revenues, specifically the sales tax has been reduced downward by $100,000 and the mortgage tax is anticipated to realize $75,000 less next year and that which we anticipated to secure this year. Additionally last year we were able to rely on a one-time cash infusion of $120,000 from monies to offset debt service and that source of revenue no longer exists. Staff had the responsibility to seek out the means of revenue generation to off set certain expenditures that were specific to the service provided. For example, most recently the cost to pick up commercial rubbish, street opening permits, fingerprinting, and several other minor costs were raised. The goal is to have the cost to provide the service covered by the user, rather than the general taxpayer.
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 for 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.
Contained within the operating budget is $35,000 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 in the amount of $60,000 for the writing of the Plan. The additional money is requested to complete that portion of the project requiring environmental review of the work.
Other Capital improvement projects which would normally appear in the operating budget for funding, are currently being packaged for Board of Trustees consideration as a bond anticipation note. These include purchase of a one ton dump truck complete with plow,salt brine anti-icing equipment ($81,420). Due to the importance and staff recommendation for the purchase of several major capital equipment items, I wish to provide explanation as to why they were not included for funding. The Department of Public Works, as part of a program of planned replacement of heavy equipment, offered convincing arguments for the purchase of both large and small dump trucks. However, given the competing needs and declining assessed value experienced over the past twelve months it is my recommendation that these purchases be delayed. In the past, mention has
been made of the Village’s financial position as relates to bonded indebtedness and the limiting affect it has on the capacity to expand upon the delivery of services or to reduce the property tax burden. While interest rates are low and there presently exists a favorable environment for municipal borrowing, the strain this future debt places on the operating budget is too severe for consideration at this time.
We believe that because of the steps the Board of Trustees took two years ago to properly fund the cost of utilities, the budget reflects those sound estimates generated through review of the historical trends experienced in the use of natural gas, electricity and water. It was staff time well spent collecting usage data that yielded the ability to make better, more accurate estimates on what the financial needs will be for the next fiscal year as relates to utilities, medical insurance, and the cost of production material (asphalt, salt, motor fuels and service contracts).
This budget should be viewed as a transitional budget. With the deterioration of the revenue base and the heavy dependence upon external revenue sources we must rely upon the willingness of Hastings residents to support the service priorities and expectations 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 their family 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 and Budget Work Sessions. Staff is prepared to make sure the Board of Trustees receive the quality information needed to set priorities, make judgments and choose among alternatives.
Francis A. Frobel
Village of Hastings-on-Hudson
7 Maple Ave, Hastings-on-Hudson, NY 10706
Cable Station Channel 75 - WHoH-TV
Phone: (914) 478-3400