PART 4: PRIORITIES AND HARD CHOICES

By Supervisor Susan Siegel

As I put together my 2011 budget, I’ll be weighing all of the Town’s needs vs. the ability and/or willingness of our taxpayers to provide funding for them. Doing so will require my setting priorities and making hard choices. The only sure thing I know is that I won’t be able to please everyone.

I’ll start the process with the same level of services and expenditures that we currently have. Then I’ll add the projected 2011 increases in state pension costs and employee medical benefits (costs beyond our control). BOOM – just like that, the tax rate will increase 7.76% – without any additional benefits to taxpayers.

A potential tax rate increase of that magnitude is out of the question.

If I add any additional expenses to the budget, such as making crucial infrastructure repairs (fixing a leaking roof, repairing dangerous bridges), the increase will be even higher.

Again, totally, out of the question.

Of course, one way to offset rising costs is to raise revenue projections, but other than property taxes, which represent 56% of the Town’s revenue, there aren’t any pots of money out there waiting to come to our rescue. Given the continuing weak economy, it’s not likely that I’ll be able to responsibly raise revenue projections for any of our other major revenue sources. In fact, over the past three years, many of our significant revenue streams have declined dramatically.

In 2007, building permit fees totaled $623,000. Projections for 2010 are less than half that amount. Similarly, in 2007 revenue from the mortgage tax totaled $2.4 million, but in 2010, we’re hoping we’ll receive $1 million. Interest earnings in 2007 were $711,000, but for 2010, it’s projected that they’ll be less than $250,000.

So, if revenues are down, the only other option we have for keeping the tax rate increase to an acceptable level is to reduce costs and cut expenses, something my administration started doing from day one.

To date, we’ve instituted a town-wide purchase order system that controls expenditures before, not after, they’re made. We’ve tightened up our RFP (Request for Proposal) and bidding procedures in order to get competitive prices on the goods and services we purchase, and we’ve consolidated service contracts in order to leverage greater cost savings. Just this month, we passed a law that will close a loophole in the planning review process that has cost taxpayers more than $115,000 in outside legal fees since 2008.

We are also actively eliminating wasteful spending by selling off small town-owned parcels we have no use for. This reduces the Town’s tax bill for school and county taxes and also puts these parcels back on the assessment roll paying taxes. For other properties with tax liens that we can’t foreclose on or sell, we plan to lower the assessments in order to reduce our tax exposure.

But, while these cost cutting and long overdue financial “housecleaning” measures are important, by themselves, they will not be enough to significantly lower the potential property tax burden for 2011.

It is very likely, therefore, that it may be necessary to cut services and/or the Town’s workforce. Cutting staff is a decision not entered into lightly and one that will only be used as a last resort. Asking employees to do more with less is a popular refrain in recent years, but many departments are already operating with reduced staff. Just this year alone, five positions have gone unfilled due to attrition and five more positions will be eliminated by the end of this year as a result of the special early retirement incentive we offered.

As I contemplate the possibility of cuts in the Town’s workforce, I’m painfully aware of the fact that such cuts will likely also mean cuts in services – either less will get done or it will take longer to get a task done with fewer people to do the work. These are not happy times.

It will also be necessary to borrow money to pay for some of the infrastructure projects that simply can’t wait for the economy to rebound. With the current depleted level of our fund balance, bonding will be the only option we have to pay for work that needs to done. A $1 million borrowing costs approximately $100,000 a year in debt service, or the equivalent to a half of one percent tax increase.

Priorities and hard choices. That’s what I’ll be agonizing over for the rest of October as I put together my tentative budget for 2011. In the last installment of this five-part series, I’ll share with you my proposals and how and why I made them.