Plan derided by board as a ‘shell game’
The Town of Bethlehem has a tentative 2011 budget on the table, and while Supervisor Sam Messina has called it a prudent plan for the future, his colleagues on the Town Board are panning it as a compilation of risky accounting tricks.
The tentative budget calls for $40.2 million in spending, about the same as budgeted in 2010. There has been a fair amount of disagreement related to the first-time inclusion of a capital plan with the budget, as well as the viability of some of the assumptions made for the coming year.
The bottom line
Under the plan, the tax levy would increase 1.8 percent, a relatively low year-to-year jump for the town. Property owners’ blended tax rate would increase 0.19 percent with the change.
The tentative budget calls for about $800,000 in cuts, including a reduction in part-time and seasonal personnel, a 3-percent reduction in contractual spending (which could include anything from paper use to maintenance projects) and a 2-percent increase in the employee share of health care costs.
Reductions are painful. Our budget was already lean, said Deputy Supervisor John Smolinsky, who presented the budget for Messina at a public meeting, as the supervisor was absent. `We need to plan now and act now to secure Bethlehem’s financial security and quality of life.`
There are also a number of new revenue items totaling $220,000. The major piece is a change in the cable franchising fee structure to the tune of $130,000, but also proposed are a false alarm fee for the police department, increased dog licensing fees, increased usage fees for park facilities and a start to charging for notary service at the Town Clerk’s office.
There is a 1 percent raise for town employees in the budget, and a contractual 2.5 percent raise for police department personnel. Members of the Town Board, Planning Board, Zoning Board of Appeals and the supervisor would take a 10 percent cut in pay for about about $27,000 in savings.
Messina called the budget a prudent response to tough times, and one that sets the town up for future stability.
`This budget did what it needed to do for 2010, 2011, and get us reasonably prepared for where we need to be in 2012,` he said.
Budget panned by Town Board
But other members of the Town Board contended the exact opposite is true, saying many of the practices in the budget would put the town on its heels should another tough year come.
`The fact of the matter is this budget spends more, taxes mores, borrows more and hides more,` Councilman Kyle Kotary said. `We’re spending a lot more than we did in ’09, we’re spending more than we did in ‘010…that just causes me great concern as we’re going forward.`
Members criticized an amortization of pension contributions, a new measure allowed by the state to offset the massive pension contribution costs municipalities are encountering (Bethlehem will see its pension costs rise 39 percent in 2011). That $144,000 sum would be deferred from next year’s payment and spread out over the next 10 years, plus interest.
While there is no planned use of town savings in 2011, the budget does make use of interfund transfers, where the four funds essentially charge one another for services. This would smooth out projected deficits in some funds and surpluses in others.
The budget presentation also included a proposal to address the town’s anticipated 2010 revenue shortfall through the use of savings. The gap is expected to run nearly $1 million.
Councilwoman Joann Dawson expressed reservations about the plan, noting it would bring saving levels close to 15 percent of the entire budget. The 2011 budget doesn’t call for them to be used at all, a point she characterized as overly optimistic.
`How could we possibly predict that next year’s going to be better than this year?` Dawson said.
The tentative budget includes a decrease in receipts of sales and mortgage taxes.
Dawson also objected to having the plan be built into the 2011 budget, when just a few weeks ago Messina indicated he would like to wait until more concrete tax receipt information emerges later this year.
Messina said it’s a proper practice to spend savings to close the gap.
`I think prudent fiscal management for the Town of Bethlehem is to make sure we don’t drop below the 15 percent level, but stay close to that level,` he said.
Disagreement over capital plan
Especially at issue is the inclusion of a 4-year capital spending plan, a measure the town has been working towards for several years. Though an informal schedule has been examined before, this is the first time it’s been attached to the budget itself, and it has caused some squabble over exactly what should be considered an expense for the town.
The plan mostly charts out spending on equipment and repairs, some of which would be borrowed on to spread the cost out over the lifetime of the equipment. The capital plan calls for $4 million in spending in 2011, including $1.4 million in borrowing and $2 million in the spending of capital reserves.
Projects include upgrades to the Clapper Road Water Treatment Plant and several new police cars, to name just a few items.
Capital reserves are built and spent separate from the budget as a whole and targeted at specific projects, said Comptroller Suzanne Traylor, and have been in past years, as well. The reserves are funded through interest, transfers and bonding.
`We already have 2 million sitting in a reserve fund. We’re just saying, here’s what we want to spend it on,` Traylor said.
But members of the Town Board said this amounted to an effort to keep these expenses off the budget sheet. Councilman Mark Hennessey compared the tentative budget to a `shell game.`
`It seems like this budget looks under every mattress to find money left behind,` he said. `It’s a borrowing, binging and spending budget.`
But Traylor said the only difference this year is the board is seeing the reserve expenses and borrowing up front, instead of granting approval later on.
`We don’t typically show how we plan to spend reserves for the year,` she said. `It’s no different than in previous years. The only difference is that we’re telling everybody about it.`
Last year, for example, the town expended nearly $2.7 million in capital reserves, much of which was for improvements to the town’s sewer pump stations. The town is slated to spend about $1.7 million of its capital reserves this year.
These monies are organized into 10 funds, each with a specific purpose. They totalled about $6.4 million at the end of 2009.
Also built into the budget is the assumption the town will begin delivering water from the Clapper Road Water Treatment plant into the water supply at large. Should the town pursue another option to meet approaching federal guidelines, costs of $1 million or more could be added to the budget. The debate is ongoing.
The budget will now see several weeks of examination before a final proposal is vote on. There will be a public hearing on Wednesday, Oct. 27, at 6 p.m. at Town Hall. The board is slated to adopt a budget at its meeting on Nov. 10.
Copies of the tentative budget are available for review at the Town Clerk’s office, libraries in town and on the town’s Web site, www.townofbethlehem.org, under the comptroller’s department.“