Village Administrator, Larry Shopfer presented three scenarios, projecting what could be available to carry forward into next year’s budget, as allowed by New York State. The 2014/2015 budget was below the tax cap by almost $285,000 and so the question became how much to carry over to next year in case it’s needed, while still remaining compliant by staying within the tax levy cap. The three choices presented to the Board for their consideration were:
1. Adopt the tentative budget as the final budget, a 1.99% increase with no changes. The carry forward maximum limit is $201,000.
2. Target a specific tax rate of 2.43% increase as opposed to 1.99% that is still $43,000 under the tax levy cap with $201,000 carried forward.
3. Come in with a tax rate $201,000 underneath the tax levy cap. The rate of increase for this is 2.64%. Carry forward $201,000.
There was much discussion about projecting expenses for the next budget. Big-ticket items to be factored in were almost all personnel, union and non-union increases as yet unknown — assumed to be 2%. Retirement costs were projected to lead to a small increase. Health insurance was assumed to be 10% — neither high nor low. These fixed costs add up to $400,000 in increases for 2015/16, up 30% in expenses over 2014/2015.
Further discussed were revenues. Revenues increased in 2013-2014 – adjustments went from $2,820,000 to $2,916,000, a $96,000 difference. Revenues are not predictable, therefore are not relied upon as a spending plan.
Irvington’s unrestricted fund balance is $2 Million – healthy, but not excessive. It is considered to be low risk to appropriate $120,000 of this amount this year to offset taxes. Historically, Irvington has maintained the fund balance even in harder times. It has been used to offset new taxes when applicable.
One Board member felt that, “A healthy fund balance is an essential component of conservative budgeting.“
The Board also talked about new legislative changes that will begin next year regarding the tax cap. Incentives were added to the tax cap legislation by NY State that will result in small rebates to residents whose government entities, i.e., village governments and school districts, stay within and do not override the tax cap levy, set at 1.48% this year.
The Board circled back to budget options a number of times, seeking to make the best decision possible for residents without compromising on services or leaving the Village short of funds in case of an emergency situation. Questions were asked if the budget this year will constrain the budget next year and how the carryover allowed will affect that. Larry explained, “In a general sense, the State sets the limit of the amount of tax levy. This year it is 1.48% over the previous year. In actual dollars, our tax levy can be raised by $13,250,000.”
For the 2014/2015 budget, $13,407,000 was allowed. The Village Board proposed a budget of $13,121,060. This Board has been less focused on the tax levy cap and more inclined to impose the lowest possible tax on residents, and desire to give a rebate to the taxpayers now, by not overtaxing them in the first place. There were no projected constraints that would prevent the tax levy cap from being met next year.
A motion was made to adopt the tentative budget as the final budget for 2014/2015 with a 1.99% tax increase. This 1.99% increase averages $112 per property owner. The final budget for 2014-15 reflects a tax rate of $287.58 per $1000 of assessed valuation, an increase of $5.61 per $1000, up 1.99% over last year. Mayor Smith stated in his budget summary, “Unfortunately the Village’s costs for water continue to rise from our wholesale supplier, New York City, that is proposing to increase certain rates in July 2014 from 5.8% to 7.8%.
The impact will result in an increase in water and sewer rates by approximately 3.25%.”
Due to the recent State legislation, the Board did not override the tax cap by resolution as they have done in the past as a precaution.
A motion to amend the budget to increase “contingency” by $41,040, increasing the tax levy from 1.99% to 2.43% and reducing reliance on the fund balance, was made. As there was no second to the motion, the amendment failed and the 2014/2015 budget was voted on and approved.