One thing appears to be a certainty: budgets aren’t going to get any easier for Rotterdam in the near future.
Town Comptroller Jacqueline Every and financial consultant John Paolino presented a Five Year Financial Forecast for the town covering 2013-17 2017 during a Town Board meeting on Wednesday, March 28.
A budget timeline was also proposed that calls for initial budget preparations to start Monday, April 9, and a 2013 Tentative Budget to be filed on Sept. 28. Paolino said the five-year period was selected because financial data becomes significantly less valid beyond five years.
The projection aims to provide solid statistics and figures, but Paolino said the document will need to change over time.
“This is a living document — it is going to change,” Paolino said.
The projections say the town’s assessed property values will remain level, with homestead totaling $1.8 billion and non-homestead totaling around $700 million. Paolino admitted there has been some growth in town, but added there are some “major” tax litigations pending.
Supervisor Harry Buffardi said the town is facing a tax certiorari issue and property assessment challenge with General Electric that will be “very difficult.” GE is the largest taxpayer in the town, Buffardi said, with around 75 percent of its local plant property within Rotterdam. The assessed value of GE is currently around $141 million, with $3 million exempt for their own water and sewage and snow plowing, according to Buffardi.
“We have had it lowered in the past and we haven’t paid the difference,” Buffardi said.
He said the issue goes back to 2003, and the town has spent around $300,000 so far fighting tax certiorari and will likely spend around $200,000 this time.
The five-year forecast has the property tax levy increasing by 2 percent each year. Sales tax revenue is projected to grow 1 percent annually. Town Clerk fees and other permit fees are increased by 1 percent annually. Also, inter-fund transfers would be around $366,000 annually.
Fund balance usage also would dramatically decrease from what was seen in the 2012 budget, from $800,000 to $200,000, which leaves a significant $600,000 gap. Budgeted fund balance usage in 2012 was $600,000 less than the previous year, too.
“If you look at your budgets … your budgets are not balanced, they are far from it,” Paolino. “You are balancing your budget by applying fund balance.”
Every said the fund balance at the close of 2011 for the general fund was $1.8 million and the highway fund had $320,000. Paolino said the numbers are “solid” but the board needs to continue to move away from fund balance usage.
Outside of contractual step increases, the budget forecast doesn’t include any increase in salaries. Paolino said a 1 percent increase in salaries for town staff works out to $91,000 per year.
Buffardi said he is in ongoing talks with union representatives and intends to allow the union heads to look at the town finances.
“The pie is only so big and we will have to portion out the slices,” Buffardi said.
No money is budgeted for equipment purchases for the five-year period because it is recommended the town implement a five-year replacement plan, so equipment expenses and be budgeted for consistently.
Buffardi said he had worked with Paolino and Every on the forecast, so he wasn’t surprised by the numbers.
“I think the glass is half full,” Buffardi said. “I think we are looking towards some tough times, but I also think we can make it and stay under the 2 percent tax cap and still provide healthy services to the residents. “
