Thursday, March 5, 2009
Catherine Wilson, Bureau Chief
Scrutinizing 2009/2010 Town Budgets
Local towns are currently working on their budgets for the upcoming 2009/2010 fiscal year. Most of the pending budgets that the Guardian reviewed reflect the impact of the recession on the local economy. Most towns are holding their total budgets to their current 2008/2009 levels, offsetting increases in salaries and benefits in current employee contracts by reducing staffs in other areas and decreasing or defraying
The Town of Yorktown posts their budget on the town Comptroller’s website: www.yorktownny.org. The town’s total salaries and benefits for 2009 are expected to be $17,730,762, a slight decrease from their 2008 levels of $17,859,287. At first blush, this would appear to be a good thing for local taxpayers, but the total decrease disguises several significant increases in the budget, compensated for by major cutbacks
in several areas.
Most town departments in Yorktown have minor or no changes in salaries planned for 2009, among them, the town’s Legislative Board, the Tax Collector, the Town Clerk, Public Safety, and the Parks Department. However, some departments are anticipating increases in salaries that exceed the standard 3% - 4% increases in pre-recession government contracts. The Town Hall staff costs are projected to increase from $47,129 to $63,766, a 35% increase; the Police Department will increase from $6,830,005 to $7,147,001, 4.6%; the Skate Park staff costs
will increase from $16,000 to $21,000, 31%; and Section 8 staff will increase from $82,488 to $95,171, 15%. The town did not explain the reasons for these increases in costs. Are they stemming from necessary additional staff or are the current staff receiving extraordinary raises in these difficult times at local taxpayer expense? Yorktown’s budget does not provide a headcount by department so that the town residents cannot even determine how many individuals are on their tax rolls.
In order to keep total town costs down, Yorktown has decreased costs on other departments to compensate for the increases above. The Assessment staff costs will decrease from $560,448 to $358,418; the Legal department staff costs will drop from $356,125 to $179,644; the
Engineer’s department will drop from $490,449 to $396,118; Elections staff will drop from $15,080 to $8,000; the Building Department
staff costs will decrease from $784,648 to $741,140; Civil Defense is eliminated; Recreation, Parks, Camp, Youth Programs, Conservation Board, Open Space Committee, and the Beach & Pool staff all anticipate decreases.
The town does not explain if these decreases are possible due to improvements in efficiencies or computerization of old manual systems, or if they are the result of program and service cutbacks. The town also does not explain what alternatives they researched to avoid service and program cutbacks. Were contract salary increases renegotiated with the union employees and employee benefits revised to reflect current
economic conditions? Employee benefits make up an extraordinary part of Yorktown’s total staffing budget, $3,205,000 out of the $17,730,762 total, or 17% of the total staff expense.
That trend is also evident in the town’s Highway department budget. The $27,000 increase in this department’s staff cost over 2008 levels is almost completely due to increases in benefits; salary costs are offset by reductions in snow removal expenses. But while the Highway department’s benefit costs are consistent with the town’s benefits costs for police and town staff, both at 17%, the library staff functions with benefits that amount to 15% of their salary levels. Why is Yorktown treating their staff differently? If Yorktown can manage to offer acceptable benefits to their library staff that cost 15% of their salaries, why can’t they offer the same level of benefits to the town, highway, and police departments to lower costs and taxes for local struggling residents?
Offering consistent benefit packages to all town employees would decrease Yorktown’s costs by $967,000, enough to restore the staff lost due to any dropped services and programs. Like most towns, Yorktown splits their annual costs into multiple budgets but adds all of these
budgets together into a top, summary budget. However, a local taxpayer looking at only the top summary budget without delving into the details on the individual budgets would miss the line item on Yorktown’s 2009 Sewer department budget of $238,000 in extraordinary benefit costs. That cost is in addition to $338,981 of normal benefits, a combined total of $576,981 planned for 2009, compared to $214,500 in benefit costs in 2008, an increase of $362,481 or 69% over the prior year. Yet the budget provides no explanation for this extraordinary increase. While Yorktown’s summary budget provides all of the costs involved, the town provides no written explanations of these costs to their residents.
Yorktown does provide their anticipated equipment expenditures by department for 2009 compared to 2008 spending, but does not provide a listing of their existing and proposed equipment. Therefore, local taxpayers cannot determine if the reductions in spending in the 2009 equipment budget is due to cutbacks, or if there is already sufficient equipment in the town’s departments.
A listing of existing equipment, including their dates of service, would allow residents to determine the age of the equipment and if the current replacement schedule and maintenance programs are reasonable. Most governments establish a capital plan, usually for five years, and an analysis of equipment replacement and maintenance needs. The Yorktown budget does not provide copies of either of these plans. One major area of each town budget that will become more critical in future years is the debt portion of the budget. This is the amount of interest each town must pay each year on the funds borrowed for capital programs and equipment budgets. Major programs, such as the building of a new school or the repair of a road or town building, are too expensive to be passed through to taxpayers in one year so local towns borrow funds for these projects and spread their costs over multiple years.
The current national economic stimulus program will incur major interest expense costs on the funds borrowed, due to the enormous size of the $790 billion package and the $2+ trillion bailout packages, the interest costs on these packages are anticipated to affect several generations
of U.S. taxpayers. Many local governments, including Westchester County, are also currently borrowing against future generations to cover today’s expenditures. A local resident, reviewing their town’s budget, must ask if the money borrowed justifies the years of interest that will be due and the programs and services that will need to be cut in future years to pay this interest.
Yorktown’s debt service costs for 2009 are $3,562,992, their fourth highest cost in their total budget for 7% of their costs overall. Most governments set a policy that their total debt cannot exceed a certain percentage of the value of the local taxable property. Yorktown’s debt service schedules do not provide a copy of the town’s policy or a comparison of the total debt costs to the value of the local taxable assets.
Mt. Kisco is currently starting their budget for their 2009/2010 fiscal year which runs from June 1 2009, through May 31, 2010. And although their budget is not yet available, Mt. Kisco residents, in comparison to Yorktown, can readily review the basis for the budget and the schedule online.
The Mt. Kisco Finance department provides all background information as to how the town invests local funds, its debt management policies, how it schedules purchases, and develops its budget in its Financial Goals and Policies available in full at: www.mountkisco.org.
Mt. Kisco’s budget commenced on February 20 when the Village Manager was required to submit a capital improvement proposal to the Board of Trustees. The schedule for the entire Mt. Kisco budget is: February 8: Village Manager shall notify in writing the department heads of the necessity for and form of estimates of revenues and expenses for the ensuing fiscal year; March 1: Department heads shall submit budget estimates to the Village Manager; March 20: Village Manager shall file the tentative budget with the Village Clerk; March 31: Review and amendments to tentative budget shall be made by Village Board; April 15: Notice of public hearing on tentative budget shall be published at least five days prior to public hearing; April 20: Public hearing; May 1: Adoption of budget.
Any Mt. Kisco resident interested in becoming involved in the local budget has a wealth of material available to them on the town’s website. The Finance Department provides detailed budgets for the two prior fiscal years as well as copies of the Town’s annual audits. Included in the Town’s budgets are comparisons going back to 2006, written explanations, and line-by-line cost details. An interested resident can
see how much each Town department is spending on telephone costs or what the Police Department charged for overtime or attending events.
Not all of Westchester’s towns operate on the same budget schedules. North Castle (Armonk) adopted their town budget for 2009 in December, 2008. Any North Castle residents who are anxious to lower the town’s spending, and the taxes needed for that spending, will have
to wait almost another year for changes to be made unless they can convince the Town to adopt a revised interim budget for the remainder of 2009.
Likewise, Ossining has already approved its budget for 2009. Unlike other are towns, however, Ossining is projecting increases in both
spending and taxes for their residents. Ossining provides an overview of the major changes in the current year’s budget on its website,
www.townofossining.com. Some of the major changes for Ossining are:
• 23.5% reduction in Mortgage Tax revenue; $1,050,000 in 2008 to $850,000 for 2009;
• -0.42% reduction in Interest & Earnings; $225,000 in 2008 to $130,000 in 2009;
• 25% increase in police overtime;
• Increase in Appraisals, Litigation and refunds for Certioraris;
• 23% increase in salt expenses for roadways during inclement weather;
• Increase in Electric costs from $164,000 in 2008 to $221,000 in 2009;
• 6.6% increase in Health Insurance premiums.
While the town budgets have an impact on the amount of local taxes paid by Westchester residents, the school budgets have an even greater impact. Local residents seeking to lower their tax bills to compensate for lost jobs, lower income, and drops in retirement savings, should participate in the hearings for their school budgets to possibly reduce district spending.
All local schools operate on the same fiscal year, July 1 to June 30. The budgets must be voted on in May, so local residents have the months of March and April to make their opinions heard. The school districts are already facing pressure from their employees to cover the shortfalls in the retirement funds due to the declines in the stock market. However, many local taxpayers have added at least a decade to their own work years to compensate for recent losses of 33% and more to their 401K’s and will be unwilling to continue to fund retirement contracts that allow school staff to retire at age 55 with minimal, or no contributions from those staff members to their retirement accounts.
Indeed, many local residents now want a reduction in their school taxes to compensate for the additional contributions they now have to
make to their own retirement needs. Local residents should obtain a copy of previous years’ budgets from their school districts along
with a copy of the budget proposals for 2009 and the teacher and staff contracts with full benefit and retirement provisions, in order to
determine what costs the local taxpayers should be asked to bear. All of this information is already on hand at each school district, or on
the district website, and should be available to local residents without the need for submitting a Freedom of Information Act request.
The Guardian will analyze the school budgets and the district contracts for our readers throughout March and April as they become