SUPERVISOR’S BUDGET MESSAGE (Revised for Preliminary Budget)

The Preliminary 2006 Budget submitted herein contains a detailed analysis of the Town’s financial condition and complete estimates of expenditures and revenues for 2006.

CURRENT 2005 TOWN WIDE FUND BALANCE PROJECTIONS

Table 1 presents a detailed analysis of projected revenues and expenditures for the two town-wide funds for 2005, and compares these projections to actual revenues and expenditures for 2004.  This table shows that General Fund expenditures are expected to increase by $41,648 in 2005 over the amount expended in 2004.  Of this increase, the amount of $18,556 is attributable to personal services increases, which consist of salary increases and an increase in hours worked by part time clerical staff in the Town Court, Town Clerk’s Office and Planning/Zoning.  Benefits costs for employees paid from the General Fund are projected to increase by $6,443 (primarily health insurance, retirement and social security related to increased salaries and hours).  The costs related to the preparation of an updated Town Comprehensive Plan will cause an increase in spending of nearly $8,500 in 2005.  Costs for legal services will also increase, as will the cost of parks equipment and contractual services, which is partially offset by an increase in grant income.  Centralized services costs are expected to decrease by $3,900 from 2004 to 2005.

Total General Fund expenditures are projected to come in approximately $24,000 over the amount budgeted.  These increases include the aforementioned costs related to parks and the update of the Town Comprehensive Plan; purchase of computer equipment; newsletter production and mailing costs; and operating costs for the Town Hall and Highway Garage, some of which is driven by higher energy costs.

Actual Non-property tax revenues for 2005 are expected to exceed the amount received in 2004 and the amount budgeted for 2005.  Justice Court revenues will exceed 2004 receipts and the budgeted amount for 2005.  This may be in part attributable to the Town’s purchase and loan of a laser speed detection device in late 2004.  Mortgage Tax revenues should also exceed the 2005 budget, in spite of rising interest rates.  The Town has experienced a one year spike in Building  Permit revenues, mainly due to the construction of the new Serta Mattress facility.  Higher interest rates have also increased interest income.  The Town has also received grant funds originally pledged in 2002 for the construction of a bulkhead at Cornell Park, the cost of which is reflected in the parks equipment cost increase referenced earlier.  It should also be noted that the Town is no longer eligible for assessment administration aid from the State, due to withdrawal from the Sustaining Equity Program, thereby eliminating this source of revenue.

 Overall, General Fund revenues are expected to exceed the budget by approximately $156,000, and this will represent an increase of $84,457 above the amount received in 2004.

The increase in revenues over budget, offset partially by spending above the amount budgeted, should result in a General Fund operating surplus of approximately $74,834, as opposed to the budgeted use of $57,000 from the accumulated fund balance, yielding a positive variance of approximately $132,000 from the adopted 2005 budget.  When this projected surplus of $74,834 is added to the accumulated fund balance as of December 31, 2004, the projected General Fund balance as of December 31, 2005 will be approximately $237,957, of which $105,000 (44%) will be used to offset the impact of budget increases for 2006.

The second set of columns in Table 1 provide spending and revenue estimates for the Highway Fund.  Overall expenditures in the Highway Fund for 2005 are now projected to increase by $135,579 over the amount expended in 2004, and approximately $30,000 above the amount budgeted for 2005.  Please note that these amounts do not include road reconstruction funded from the Road Reconstruction Bond approved in 2003 by the Town Board.  To date, from the $385,000 bonded for road reconstruction, over $240,000 has been expended for road reconstruction projects and an additional $3,000 was used for bond issuance expenses, leaving nearly $142,000 available for future use for the remainder of 2005, and if funds are leftover, into 2006.

The most significant increase in spending in the Highway Fund is related to the repayment of the Road Reconstruction Bond, which added over $76,000 to the 2005 budget.  Other increases include payroll costs resulting from cost of living increases and the annualization of a new employee salary, and benefits, primarily related to health insurance and retirement.  The Town has also expended additional funds for highway repairs attributable to flooding which occurred in April, 2005 and which is being funded by  Federal Disaster Assistance administered by the Federal Emergency Management Agency (FEMA). 

For 2005, Highway Fund revenues will be increased by a modest increase in Consolidated Highway Improvement Program (CHIPS) funding, and the aforementioned Federal Disaster Assistance.  This will increase revenues by approximately $55,000 over budget, and result in an operating deficit of $10,552 to be funded from the Highway Fund accumulated fund balance, which is a positive variance compared to the budget, which had pledged $35,000 from the fund balance.

Overall, the Town is projected to realize an operating surplus of $64,282 for the 2005 budget year.  This will increase the projected accumulated fund balance in the Townwide funds up to $270,231.  Of this fund balance, a total of $125,000 is being appropriated in the 2006 Town Budget to reduce the impact of budgeted cost increases in 2006.

2006 TOWN BUDGET

Table 2 contains a summary of items that impact the overall spending proposed in the 2006 Preliminary Budget.  General Fund increases include proposed spending for recurring expenditures such as personal services, benefits, centralized services, programs and other non-personal services.  The proposed appropriation increases for recurring items is $40,465.  This includes an increase of $15,015 for personal services, of which $9,450 is for the Town Court staff, to support an increase in workload requiring additional hours for a part time Justice Clerk.   Other salary increases include a 4.5% increase in part time hourly staff and the annualization of the cost of a leave policy for part time hourly staff; modest increases for part time elected officials, and a 4.5% increase for salaried positions.

The increase in benefits costs ($5,150) is attributable to higher health insurance premiums.  The increase in departmental non-personal service ($900) is primarily caused by an increase in mileage reimbursement driven by increased energy costs.  There is a proposed increase of $2,000 for legal services to reflect costs not covered under the Town’s retainer with the Attorney for the Town.  Recurring centralized services cost increases include the operation of the Town Hall and Highway Garage (energy costs), printing (cost for publication and mailing of town newsletter), insurance, and elections inspectors (2006 budget includes cost of primary election, since 2006 is a statewide election year).  The 2006 budget includes an increase of $8,500 in parks contractual expenses to allow for the contracting out of parks maintenance.  This is offset by a decrease in budgeted personal services for parks maintenance.  Upon consultation with the Superintendent of Highways, he has recommended that this work be contracted out, as it is increasingly difficult to find qualified help and the current equipment is aged and no longer functioning properly; the cost to replace the existing tractor would exceed $25,000.

The 2006 Preliminary Budget includes one time non-recurring increases of $60,285 in the General Fund.  An increase of $14,500 is proposed to complete the consultant services required for the update of the Town Comprehensive Plan.  An increase of $34,785 is proposed to repay the remaining principal balance of the Water District Planning Bond authorized in 2003.  This one time expense is offset by a $25,000 legislative grant secured by Senator Seward for this item.  An increase of $7,000 is proposed for a new copier/network printer/scanner for the Town Hall.  An increase of $4,000 is proposed for transfer to the Highway Fund.

In the Highway Fund, a total of $44,807 in spending increases are proposed in the Preliminary 2006 Budget.  The budget includes a proposed increase of $10,900 in employee personal services.

The Preliminary 2006 Budget for the Highway Fund also includes a proposed increase of $16,300 for benefits, increases for road repair materials ($10,000) and machinery costs ($10,000) to reflect energy costs.  The budget reflects a net decrease of $4,893 in debt service costs.

The combined townwide increase in budgeted expenditures for the General and Highway Fund combined is $145,557, which is offset by revenue increases of $48,150, and an increase of $33,000 in the appropriated fund balance from $92,000 to $125,000.   With a projected fund balance of over $270,000 in these funds at the end of 2005, the pledge of $125,000 for tax stabilization in 2006 appears to be reasonable.  Assuming that 2006 revenues and expenditures are close to budget, this will retain a fund balance of approximately $145,000 at the end of 2006 which will be available for future tax stabilization and contingencies.

By using a portion of the accumulated fund balance for tax stabilization in 2006, the overall property tax levy is proposed to increase by $64,407.  This increase, when factored in with growth in the tax base resulting from new construction, will result in an overall tax rate increase of 2.36% for town-wide expenditures.  Table 7 contains a comprehensive analysis of changes in the tax levy for 2006, and is discussed later.

GENERAL FUND BUDGET

Table 3 contains a detailed presentation of the proposed expenditures and revenues for the General Fund contained in the 2006 Preliminary Budget.  The expenditures are grouped to combine items within specific categories of Personal Service, Benefits, Departmental Non-Personal Service, Professional Services, Centralized Services, and Programs.  The line item budget required by law, which is not categorized in this format, can be found at the end of this submitted Preliminary 2006 Budget.

The 2005 General Fund Budget includes an overall increase of $5,140 for salaries for elected officials.  The Supervisor’s salary is proposed to be increased from $7,700 to $8,200, a change of $500.  Town Board salaries are proposed to be increased by $150, from $3,600 to $3,750.   Salary increases are also proposed for the Town Justices (an increase of $300 from $9,450 to $9,750) , Tax Collector (an increase of $300 from $5,650 to $5,850).   A salary increase of $1,900 is also proposed for the Town Highway Superintendent, from $42,600 to $44,500, and an increase of $1,040 is proposed for the Town Clerk, from $23,120 to $24,160.  A table of salaries in other towns is included for comparative purposes.

The 2006 General Fund Budget includes an overall increase of $9,875 for employee personal service for appointed positions.  This includes a 4.5% salary increase for all hourly employees, and the annualization of the leave benefit policy adopted by the Town Board earlier in 2005.  An increase in hours has also been budgeted for the Deputy Justice Clerk to reflect an increase in the Court’s clerical workload.  The budget includes an increase of 4.5% for salaried clerical staff.  A salary increase of $800 is being proposed for each of the three current staff in the Building Department, bringing the total budget for Building Department salaries up to $17,400.  By comparison, a survey of other neighboring towns indicated that Greenville’s budget for 2005 is $25,500; Athens’ budget is $19,800; Cairo’s budget is $23,082 and Catskill’s budget is nearly $75,000.  Coxsackie pays its one Building Inspector $9,629 in 2005; with these proposed increases, our primary Building Inspector will be paid $5,000.  The personal service cost for parks maintenance has been decreased to reflect a proposal to contract out most parks maintenance.

The 2006 General Fund Budget includes an increase in benefits costs.  It is estimated that health insurance premiums will increase by approximately 14-16% in 2006.  The General Fund budget includes health insurance for the Justice Clerk, Highway Superintendent and retirees.  State Retirement contributions are expected to stabilize, after significant increases in the last two budget years.

The 2006 General Fund Budget includes a net increase of $15,400 in departmental non-personal service costs, most of which is attributable to a one time increase of $14,500 (from $4,000 to $18,500) in comprehensive planning costs.  Other increases in departmental non-personal service costs are related to projected increases in mileage reimbursement costs due to energy cost increases.

Other increases in the 2006 General Fund Budget include $2,000 for legal services, $3,000 for insurance, $1,300 for election inspectors (includes costs for primary election for 2006), $3,000 for Town Hall and Highway Garage operation (fuel cost increases), $1,700 for printing (newsletter production and mailing), a one time increase of $7,000 for the purchase of a new copier/network printer/scanner for the Town Hall, and a one time increase of $35,000 for repayment of the Water District Planning Bond which is partially funded by a $25,000 legislative grant from Senator Seward.  The 2006 General Fund Budget also includes an increase in $8,500 for parks maintenance to contract out this work instead of buying a new commercial tractor and hiring staff to maintain all of the town parks.  An increase in the transfer from the General Fund to the Highway Fund of $4,000, from $56,000 to $60,000 is also proposed.

The 2006 General Fund Budget includes revenue increases for Justice Court Fines ($15,000), Interest Earnings ($5,000), Mortgage Tax Revenues ($3,000), Property Tax Penalties ($1,000), State Per Capita Aid ($750).  Budgeted revenues are decreased for County Comprehensive Plan Support ($4,000), as this was a one time revenue source, and Building Permit fees are reduced by $3,000 to reflect the fact that 2005 revenue included a large sum from the construction of the Serta Mattress Facility.  State Aid for Assessment Administration is reduced by $3,900 to reflect the elimination of this aid to the Town, and a reduction of $400 in State Aid for Youth Programs.

HIGHWAY FUND BUDGET

Table 4 contains a detailed presentation of the proposed expenditures and revenues for the Highway Fund contained in the 2006 Preliminary Budget.  The expenditures are grouped to combine items within specific categories of Personal Service, Highway Improvements and Repairs, Machinery, Snow Removal/Other Road Maintenance, Benefits, Debt Service, and Fund Transfers.  The line item budget required by law, which is not categorized in this format, can be found at the end of this submitted 2006 Preliminary  Budget.

The 2006 Highway Fund budget includes a $10,900 increase in personal service, reflecting a proposed increase of 4.5% in the Highway Department wage scale.  Under the current wage scale, most Highway Department employees are classified as Heavy Mechanical Equipment Operators and are paid $13.72 per hour.  The wage rate in other Greene County towns surveyed (Cairo, Catskill, Coxsackie, Greenville) range from $15.00 to $16.11 per hour, and will increase in 2006.  While the proposed increase will not bring New Baltimore employees to the level of the other towns, the wage gap will be narrowed if this proposed increase is adopted.

The Preliminary 2006 Budget for the Highway Fund also includes a proposed increase of $16,300 for benefits, which includes an increase in health insurance premiums and the cost of adding the newest Highway Department employee to the Town’s health insurance program (net of a required 20% employee contribution as required by policy adopted in 2002).

The 2006 Highway Fund Budget includes an increase of $10,000 road materials and an increase of $10,000 for machinery operation and maintenance to reflect fuel cost increases.  An increase of $4,000 is proposed for road salt, offset by a decrease in contractual services for brush and weeds, reflecting the purchase of a new tractor and mower.  Budgeted debt service will decrease by approximately $5,000 to reflect the retirement of the debt on the Town’s Excavator (offset by a lesser amount of new debt on the tractor and mower). 

The 2006 Highway Fund Budget includes $15,000 for transfer to the Capital Reserve Fund for Highway Equipment.  With transfers during 2005 and 2006, a total of $30,000 will be set aside for future equipment purchases.

SPECIAL DISTRICTS

Sewer District

Tables 5 and 5A contain a presentation of the Sewer District Budgets for 2006.  Table 5 is a presentation of the Sewer District #1 Budget (Hamlet), and Table 5A is a presentation of the Sewer District #2 Budget (Kalkberg Commerce Park).  The 2006 Preliminary Budget for the Sewer District #1 includes a decrease of $3,872 in overall spending, reflecting a decrease in debt service, offset by increases in personal services (including $1,500 for part time laborer) and contractual services, to reflect anticipated increases in electricity costs.  Insofar as the 2005 Budget used accumulated fund balance to fund a projected deficit, the overall decrease in spending for 2006 will eliminate the need to use fund balance, but will not decrease user fees, which are anticipated to remain relatively stable, depending on changes in points assessments across the district

Sewer District #2 (Kalkberg Commerce Park) is newly created, and all anticipated expenses will be charged back to the existing tenants, which as of 2006, will be Serta Mattress only.

Lighting District

Table 6 includes a presentation of the budget for the Lighting District.  The 2006 Preliminary Budget includes a significant increase in anticipated electricity costs, which will result in a 17.62% anticipated tax increase, which translates to about 5 cents per $1,000 assessed value for residents of the Lighting District. 

Water District 1

Table 6 includes a presentation of the budget for Water District 1.  The 2006 Preliminary Budget includes no change in the amount budgeted or in the tax levy.

Water District 2

Table 6 includes a presentation of the Preliminary 2006 Budget for Water District 2.  The 2005 Budget included the final payment of debt service on a 30 year bond for the original piping of the Water District.  To allow for the Water District to have sufficient funds to pay for water usage while awaiting the relevy of unpaid bills, the 2006 Preliminary Budget includes a small appropriation to be funded by a property tax levy to provide an adequate reserve for non-payment of water bills.  The overall property tax levy will decrease by 80% for 2006 and should be eliminated in 2007.

Water District 3

Water District 3 includes Kalkberg Commerce Park.  All anticipated expenses will be charged back to the existing tenants, which as of 2006, will be Serta Mattress only.

Ambulance District 1

The Preliminary 2006 Budget includes a significant increase for Basic Life Support to be provided under contract by the Ravena Rescue Squad, based on their decision to employ paid staff during daytime hours.  This increase will be partially offset by a decrease in the cost of Advanced Life Support to be charged by Greene EMS.  The overall increase in expenditures is budgeted at $2,206 for Ambulance District #1, which is expected to increase taxes by 1.7 cents per $1,000 assessed value.

Ambulance District 2

Because of a reduction in

expenditures is budgeted at $2,206 for Ambulance District #1, which is expected to increase taxes by 1.7 cents per $1,000 assessed value.

Ambulance District 2

Because of a reduction in expenditures for Advanced Life Support Services for 2006, budgeted expenditures will decrease for Ambulance District #2 by $2,895, resulting in an overall reduction in the property tax levy.

2006 TAX LEVY

Table 7 shows the 2006 levy resulting from the Preliminary 2006 budget, and compares these levies to the 2005 amount.  Table 7 lists the tax levies attributable to county chargebacks for community colleges and other items separately.  It should be noted that the tax levy for county chargebacks will decrease

As indicated previously on Table 2, the overall increase in the tax levy for the combined total of the General and Highway Funds (these are the two town-wide funds), net of the use of available fund balances, is $64,407, which when combined with the increase in tax base from new construction would result in a tax rate increase of 2.36%.  For a home assessed at $100,000, this increase would equate to approximately $11.39 for 2006.  This increase will be partially offset by the decrease in county chargebacks.  Table 7 lists the other tax levy impacts for the Special Districts. 

FUND BALANCES

As required by law, Table 8 includes a listing of all projected fund balances as of December 31, 2005, along with projected revenues and expenditures for 2005.