Cold Spring Village Board close to finalizing 2012-13 Budget
By Liz Schevtchuk Armstrong
A dramatic escalation in the cost of employee benefits and the challenges of infrastructure demands occupied the Cold Spring Village Board last Tuesday (April 17) at a public hearing on the tentative 2012-13 budget. The hearing, heavy on both details and decorum (in contrast to last-year’s hearing with heated board sparring), took up most of a two-and-one-half-hour session.
Covering the bulk of village government activity, the proposed $2,652,554 general fund budget anticipates a tax increase of 1.96 percent. The rate-per-thousand (charged for each $1,000 of a home’s assessed value) would increase from $9.94 in 2011-12 to approximately $10 for the coming year. Of the $2.6 million general fund total, the budget calls for raising $1,424,937 in taxes. With payment for the Firemen’s Service Award, a form of annuity or pension for volunteer firefighters, factored in, the tax burden climbs to $1,472,886. The overall budget package also includes separate budgets of $813,200 and $465,600, respectively, for the water department and sewer department, which rely on user-fees, not taxes. The new fiscal year begins June 1.
A nearly 60 percent upswing in retirement costs
The draft budget demonstrates the starkly accelerating cost of employee retirement benefits, up by 58 percent from only two years ago, as well as other personnel costs and the growing outlays for the Fireman’s Service Award. “The costs of employee benefits are increasing rapidly throughout New York State and nationally,” Mayor Seth Gallagher said in his official budget message, read aloud. He pointed out while the village paid $91,305 for retirement benefits in 2010-11, for the upcoming fiscal year “the village expects to pay over $145,000.” As required by state law, all full-time employees participate in the retirement system.
The general fund benefit hike for the coming year -– about $26,000 — means reducing other budget categories, he added. “In order to keep the general fund-tax increase from exceeding 2 percent, the village can only raise total general fund expenditures by $18,000,” he explained. “To do that, the remaining three-quarters of the general fund budget had to be cut by $8,000,” achieved by revising spending for the Comprehensive Plan effort, equipment for street maintenance, parks and recreation celebrations, and more. In part, according to the mayor, pension woes stem from downturns in retirement-fund investment income, once pegged at 6 percent but lately not even reaching 1 percent.
The new budget incorporates a different method for allocating the share of health-care costs paid by employees: Instead of paying 1 percent of their income toward health insurance, employees will pay for 7.5 percent of the insurance premium. To help cushion the shock, they will get slight raises. Trustee Ralph Falloon suggested that for the next year the board ask for only 5 percent of premium. “With the 7.5 percent, some employees get basically a zero raise,” he told his board colleagues. “I know times are bad, but a zero raise –- I don’t think it’s fair.” Falloon proposed they cushion the impact to begin, knowing the village cost “is spiraling out of control and we will probably be asking for a contribution every year.”
“If we change” from 7.5 to 5 percent “then our numbers won’t add up for what we need to put into it,” Gallagher commented. The board left the 7.5 premium share alone, at least for the moment.
As presented in the tentative budget, the Fireman’s Service Award would go from $65,570 for 2011-12 to $70,270 for 2012-13. However, the amount paid by other local governments would rise from $15,456 to $18,232, reflecting a new calculation approach. Previously, the mayor explained, the non-Cold Spring portion reflected the number of service calls; henceforth, it will be based on a percentage of taxable assessed value of property. Responding to a question from the audience, he said the fire-service program does not constitute an “unfunded mandate’ imposed by the State of New York. “We volunteered for it. The Village of Cold Spring voted to have that,” he said. He attributed the higher costs to more firefighters participating and staying active for longer periods of time, plus the insufficient investment returns.
Summing up the financial situation, Gallagher said that “the village is working hard to keep any tax increase to a minimum,” regardless of inflation, currently 2.7 percent nationally. “At 1.96 percent, the tentative tax increase for the general fund budget has been kept well below that rate,” he said.
Infrastructure needs, whether village office tools or ferreting out causes of extraneous water seeping into the sewer system, also color the budget picture. Citing a basic example of how aging infrastructure hinders economization, Falloon noted that the village wanted to move to a “paperless office,” but discovered its out-of-date computers made that impossible. The exercise “found out all our deficiencies,” he said. “The paperless office went to the back burner. We found this stuff had to be done first.” Above the offices, the outdoor cupola needs attention, too, Gallagher added. “The roof has been leaking. It’s a historic part of the building” and thus the budget includes $11,500 for urgent renovation, he said. In the firehouse, it’s the floor, not roof, that needs prompt attention and the draft budget includes $20,000 for that. The draft general fund budget likewise provides $7,000 for public washroom repairs and $17,000 for a new garbage-truck compactor.
Resident Kathleen Foley asked about charging for garbage pick-up, at least for households that produce more than a basic amount of trash weekly. “It’s not popular,” but could be helpful, for both the village and the environment, she said. “It’s a tax, but you’re taxing the person using the system more.” Households that recycle paper, bottles, cans and plastics and compost kitchen scraps tend to generate less garbage and trash. The village earns money from the sale of recycling.
Gallagher told Foley that “you’re certainly welcome to bring a proposal forth” for the board to consider. A garbage fee “certainly is a way to encourage better use,” Trustee Matt Francisco observed. But a resident of the Marion Avenue neighborhood said that when Beacon or another area town imposed a garbage fee, some of its residents snuck into Cold Spring by night to dump their garbage sacks behind the Foodtown grocery.
Capital projects plan
To help deal with infrastructure costs, the mayor and trustees discussed creation of a capital projects plan. “It would require the board looking at this and figuring out our priorities” and how to fund them over time, Gallagher said. “It helps to prioritize things,” agreed Francisco, a board newcomer and professional in the field of project management. “I think it sounds like a very good budget discipline. It does make sense to have a much farther look than just a year” out. Trustee Chuck Hustis suggested the board establish a citizen advisory panel to develop priorities, but Trustee Bruce Campbell doubted the value, saying that village departments already have a good grasp on what should be done. The mayor recommended that Hustis get input from the state and such groups as the New York Conference of Mayors on the best ways to proceed.
Sewer and water budgets
Several significant infrastructure items fall under the sewer and water budgets. Under the proposed sewer fund budget, household charges would be $2 more quarterly, to augment the sewer fund balance and help with ongoing costs of fixing inflow and infiltration (I and I) problems. In I and I, excess water from heavy rain and other potential sources floods the sewer system, which can overwhelm the sewage treatment plant and force discharges into the river. Illegal under state law, excess-water dumping can trigger state fines of $37,500 a day per infraction. Specifically, Gallagher said, the problems have involved “release of partially treated water into the Hudson during a storm. The system just can’t handle it. The water going out might actually have been clean, but our permit doesn’t allow that much water to go out at one time.” Despite persistent attempts since 2006 to pinpoint the origin of the extraneous water, “I and I continues to occur and remains a serious problem that must be addressed” through such means as smoke-testing, comparing sewer system flow in dry periods against the level during storms, cleaning and video inspection of pipes, replacement of sewer mains, and similar steps, he said.
Answering a question from the floor, he said the state Department of Environmental Conservation (DEC) knows the village seeks to correct the I and I. “The fines would be based on us not taking the problem seriously,” he said. He mentioned some of the frustrations: One exploration, to check for illegal sewer-system hook-ups and leaks, “cost us $35,000 to $40,000 but we didn’t learn very much. We’re kind of investigating as fast as we can” while striving “to keep everything else going. And the state is aware of that.” The proposed $8 annual fee increase “would allow the village to address the urgent concerns of the DEC and save thousands of dollars in the short and long run,” he said.
A big-ticket item in the water department is installation of a new master control panel in the clean-water treatment plant. The department expects to pay some $120,000 of the expense during 2012-13; it is paying a portion of the project total of $139,000 in the current fiscal year, which ends May 31.
With the board scheduled to vote on the budget on Tuesday (April 24), village officials continued to review figures on Monday, to ensure the tax increase did not inch up, a possibility linked to the Fireman’s Service Award. On April 2, the board shaved $732 from the Fireman’s Service Award budget line, realizing it had originally over-compensated there. Later, “the amount raised from taxes for the general fund was increased by the amount the service award was reduced,” Gallagher said Monday evening. Leaving things that way pushes the level of tax increase to 2.01 percent. Consequently, “we will need to reduce another expenditure by $732 to get back to the 1.96 percent,” he said. Photo by L.S.Armstrong