The Southold town board will be discussing the preliminary 2016 budget Wednesday, prior to a vote, Town Supervisor Scott Russell said — and the talks could result in a slight tax increase, with an eye toward restoring the highway fund balance.
The board will hold a work session Wednesday at 9 a.m. and a town budget hearing at 4 p.m., with another following at 7 p.m., prior to the town board meeting. Those meetings are taking place Wednesday instead of Tuesday because Town Hall is closed tomorrow for Election Day.
“I am asking the board to discuss the fund balance, prior to a vote on the budget,” Russell told SoutholdLOCAL. “Having to transfer $250,000 from the highway fund right before the adoption of the preliminary budget has me concerned, and puts us in a tough spot,” he said.
He added, “Obviously, restoring money into the fund would result in an increase in taxes. I bring the issue up now because the election is Tuesday, but the work session is not until Wednesday — and the public should know, prior to the election, that the board may take further action on the budget, that may raise taxes.”
If the board adds $250,000 to replace the money that was just transferred from the highway fund to help Highway Superintendent Vincent Orlando commence with road repair before the winter months, taxes would go up to 2.16 percent, meaning that the tax on that line would be 2.16 percent, total, Russell said.
The supervisor emphasized that any increase would be for those specific accounts, “but the overall tax rate will still be substantially less than last year.”
If the board opted to add $500,000 to the general fund, taxes would go up 2.93 percent. Based on how the New York State tax cap is calculated, he explained, “we could actually add $1.25 million to the budget, which would raise taxes by 5.38 percent. Obviously, I would never support such a dramatic increase”, which would leave the town $82,00o under the cap.
“I don’t know what the board wants to do but, at the very least, we should restore the $250,000 that we had to move into the highway fund,” Russell wrote in an email. “That would raise the overall increase to 2.16 percent.”
None of those figures, he said, include the “reduction of the chargeback line”, or the money paid back for over-assessments.
The reason why the town would comply with the tax cap, which is .73 percent this year, is because the chargeback line “went down about $1.3 million,” he said. “That’s a reduction of about 60 percent.”
Last week, Russell addressed the public at a forum convened to discuss the 2016 preliminary budget.
The supervisor discussed the main changes to the $42.9 million budget since he first proposed the document to the town board for review.
Primarily, he said, the town has added about $92,000 in appropriations, mostly small expenditures, except for $50,000, which was added for road resurfacing in the highway department’s budget.
“We also had to revise revenue by decreasing earlier estimates,” Russell said. “We anticipate approximately $150,000 less revenue next year chiefly due to a drop in income in the solid waste district and less zoning board of review applications.”
Before any changes this week, the preliminary budget reflects a tax rate increase of 1.36 percent and a proposed reduction in spending of approximately $300,000.
When asked by Robert Hanlon, president of the Orient Association, what he was most “worried” about, the supervisor said his concern focused on the fund balance, currently at approximately $4 million.
“That’s still very healthy, and far exceeds the fund balance policy of keeping more than 10 percent, but I don’t like to see numbers drop,” Russell said.
Recently, he told the public, the town drew approximately $250,000 from the fund balance for necessary road repairs after last year’s brutal winter.
Russell said when numbers decrease it’s “exceedingly difficult” to comply with the New York State imposed tax cap. “If you see numbers like that continue, we’ll probably have to pierce the cap in the near future,” he said.
But, the supervisor said, the town could raise taxes for the current year well over three percent and still come in quite a bit under the tax cap.
This year’s state-mandated tax levy cap is 0.73 percent.
“The fund balance is the cash on hand and it is critical to maintaining our bond rating and good fiscal health,” he added.
“It has dropped over the past two years due to unforeseen circumstances. The fund is fluid and is bound to rise and fall over time. We had two years of decreases and, although the fund is healthy, we need to look at trends and make any necessary adjustments,” Russell said.
The budget also calls for a $250,000 bond for drainage and flood control, Russell said, but those funds don’t need to be factored into the budget until the following fiscal year, since it’s a proposed capital project.
New hires, Russell said, include a new police officer to replace an officer who retired, a full-time laborer for the Fishers Island highway department, which has a “skeletal” crew, a full-time account clerk for the comptroller’s office, where two part-time positions were eliminated, and a full-time code enforcement officer. In addition, the budget calls for a part time youth bureau director and a part time wildlife manager, both of which are positions defined by civil service, with duties statements.
Anne Murray of the East Marion Community Association asked about the full-time code enforcement officer; Russell said the town hired one additional part-time officer this year with the plan to hire another full-time individual in the coming year.
Councilman Jim Dinizio said the plus is that the new part-time code enforcement officer can work nights and weekends, when quality of life complaints tend to come in.
Hanlon pointed out the increases of almost 100 percent in New York State retirement costs since 2010 and asked why the upswing was so notable, and if those numbers will continue to rise.
The supervisor said a “dramatic increase” has been seen over the course of a few years. “New York State obviously took a hit during the downturn of the economy, and had to recapture that money,” he said, adding that the town has no ability to impact New York State’s retirement and pension system.
Russell said the town needed to begin looking at an employee’s overall compensation package, including insurance and retirement benefits, and not just salary.
Councilman Bill Ruland said there needs to be pension reform at the state level regarding the retirement fund because it’s driving costs. “It irritates me because we have no say,” he said. “I don’t think it’s right.”
The town actually pays into two separate retirement funds, including the New York State pension and retirement system and one committed solely to the police department, Russell said, but while it’s his understanding that the fund is starting to see some earnings, “We haven’t seen any decline in our obligations to New York State.”
Hanlon asked what Ruland would suggest. “It’s going to take a public uprising or the system going bankrupt, like Detroit,” he said.
The budget is the tenth for Russell, who has served as supervisor since being elected in 2005 and is running for office in the upcoming election.
For a prior story outlining budget highlights, click here.
To see a copy of the preliminary budget, click here.
