The following is a letter submitted to the Mayor and the Village Board of Trustees by the on April 6.
The League of Women Voters of Scarsdale (“the League” or “LWVS”) held a membership meeting on Monday, March 26, 2012 to evaluate the proposed 2012-2013 Scarsdale Village Budget. We thank Village Manager Al Gatta, Village Treasurer Mary Lou McClure and Trustees Brodsky, Harrison and Steves for attending the meeting and addressing our questions on the proposed budget.
The League supports the proposed FY 2012-13 budget and commends the Village staff, Mayor and Board of Trustees (the “Board”) for a budget that fairly balances the needs of the community with the necessity of fiscal restraint in this challenging economic environment.
This was the first budget the Village has created since the enactment of the NY State 2% tax cap last spring. As such, all parties involved put extra effort into this year’s budgeting process. The Village Manager began work several months earlier than usual by directing each department to look at what their budgets would look like under a ‘worst case’ ten percent cut. This exercise created clearer parameters for establishing the proposed budget where, quite remarkably, overall departmental budgets would decrease 0.32% from the current fiscal year.
The initial pass at the budget came in under the NY State tax cap. The League feels this was also an important effort because it showed exactly what it would mean for Scarsdale to comply with the cap. The Board ultimately chose to listen to the needs of the community and added back monies for capital projects. The League supports the Village Board’s addition of these funds to the initial budget to support badly needed capital expenditures for important projects such as sanitary sewers, the Hutchinson River Collection System repair and road repaving.
The proposed tax increase is 5.497% ($1,061,000), or approximately a $260 increase for the average median household. Highlights of this budget increase include the following:
- No service or staffing cuts are anticipated in the budget;
- The outlook for non-property tax revenues, specifically sales tax, mortgage tax and interest income in the coming year, remains weak;
- Expenditures such as debt service, pension costs and library contributions have increased;
- The continued growth of pension costs (which are dictated by the state and not under Village control) is a major concern. Part of the increase in pension costs is exempt from the 2% tax cap formula. Pension costs are expected to increase $1,164,000 this year which is more than the total proposed tax increase of $1,061,000. This represents a 37% increase in pension costs from last year and will create an astounding 96% increase in pension costs over two years.
The League applauds the Village for moving ahead with tax reassessment for the municipality’s 5,900 properties. Values have changed greatly since Scarsdale’s last reassessment was done in 1969, and this revaluation is long overdue. This process will even out the inequities in our tax base and should better enable the Village to defend certiorari challenges from taxpayers. There has been a surge in Scarsdale’s certiorari claims recently, with 227 grievances in 2008, 757 tax appeals in 2010 and 595 in 2011. The number of Scarsdale’s assessment claims, and the resulting administrative burden to the Village, should also decrease as a result of the revaluation.
The League initially supported a tax reassessment in 1991 and has repeatedly reiterated its support in the intervening years. We commend the Village for hiring the professional firm of Tyler Technologies to conduct the reassessment. Hiring a professional firm will further minimize challenges and expedite the procedure. It is our understanding that the Village is creating a dedicated website on the reevaluation, is planning to hold public hearings and community forums to hear concerns from residents, and will be creating a public information campaign. The LWVS supports these plans and encourages any others that will increase the community’s timely understanding and awareness of the reassessment process. Finally, we urge the Village to proceed with sensitivity to the needs of low-income residents who may find themselves burdened with significantly increased property taxes as a result of the reassessment.
The LWVS supports the Board’s attention to Scarsdale’s capital needs that is evident in the proposed budget even if it comes at the cost of noncompliance with the NY State tax cap.
The proposed capital budget for next year totals $10, 283, 350, not all of which is funded. Sources of funds for capital projects include current revenues from the General Fund, use of capital surplus, water-fund service charges, fees and grants.
Debt Service in the proposed 2012-13 budget will increase $336,000 from capital projects such as the tax reassessment reevaluation, South Fox Meadow Drainage Project and a modest equipment bond.
Many of the capital projects deferred for next year remain a concern, particularly the library roof and Freightway garage projects. However, the continued deferral of these and other projects seems prudent in the current economic environment.
Use of Undesignated Reserves
There is discussion among the Village Board about allocating additional funds from the undesignated fund balance to lower the tax rate and allow the Village to comply with the NYS tax cap. The League does not support this idea for the following reasons:
- Any number of contingencies could arise under the proposed bare-bones budget where additional funds from the surplus would be needed;
- The tax cap is an artificial number that does not necessarily reflect what is in Scarsdale’s best interest;
- The use of undesignated surplus could potentially be viewed negatively by Moody’s and result in a downgrade of our AAA bond rating;
- Taking funds from the undesignated reserves would negatively impact next year’s budget.
Doing More with Less Under a Bare Bones Budget
Over the past three decades the Village has eliminated 10 positions. At the same time, there has been a dramatic increase in the amount of work to be done by Village employees. This includes increased inquiries for information from residents, and a rapid growth in state mandates and requirements. The League commends the Village for continually looking for ways to cooperate locally with other groups and to work more efficiently. One small example of this trend that the LWVS was pleased to see implemented, per its recommendation to the Village last year, is the reallocation of some crossing guards who are no longer needed at noon-time due to full day kindergarten.
At its consensus meeting, League members discussed a potential issue with the bare bones budget. When fewer employees are doing more work and are operating under a bare bones budget, the League has some concerns that the Village may have (or be perceived by residents to have) inadequate resources to enforce existing laws and regulations. One manifestation of this perception by the public might be found in the recent petition received by the Village regarding the Building Dept. This concern includes other areas of our community life (except parking tickets), such as enforcing the tree law, noise, idling, etc. LWVS is not making a specific recommendation to the Village regarding this concern, but would ask that it be considered in the year ahead.
Given challenging economic conditions, the proposed Village budget is a solid plan for addressing Scarsdale’s needs in the year ahead. Should service cuts be anticipated in the future, the League again recommends that the Village solicit widespread community input and educate residents about proposed service cuts. We would also restate our desire for the creation of a matrix setting forth services and their related costs to facilitate this community discussion.
The League is very grateful for the openness and cooperation between our organization and the Village Manager, Treasurer, Mayor Levitt Flisser and the Trustees. Scarsdale is lucky to have such a committed group of employees and volunteers. Thank you for considering our recommendations as you finalize the budget.