Budget error underestimated Woodstock tax hikes

A week after severe spending cuts by the Town Board yielded a preliminary 2012 municipal budget that would raise taxes by about 4 percent for the general fund, Woodstock supervisor Jeff Moran acknowledged that he had miscalculated a mandatory expenditure and, as a result, the projected tax increase was actually more than 7 percent.

The error was discovered by councilman Bill McKenna and the town bookkeeper, Pam Boyle, on October 27, and promptly confirmed by Moran in an e-mail to board members. Apart from passing references to the higher estimated tax increase, however, no direct mention of the mistake was made during the board’s November 1 public hearing on the preliminary budget. Thus, residents who spoke at the hearing, almost universally against further budget cuts, were presumably unaware of the recent error and its implications. Without elaboration, the board voted to recess the hearing until its next meeting, on November 15.

The supervisor’s mistake involves a $115,000 understatement of the town’s mandatory 2012 expenditure for employee pension benefits. Moran’s estimate was $301,583, while the actual estimated amount due is $416,683. The increased appropriation would partly or entirely account for a revised estimate — to 7.7 percent, up from 4.25 percent the previous week — of the tax increase for the $4.3 million general fund. According to Moran, ever-increasing mandatory pension contributions currently account for nearly 10 percent of the town budget.

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The Town Board plans further alteration of the budget before it adopts a final spending plan at the November 15 meeting, in advance of a November 20 state deadline. McKenna announced at the public hearing that he would propose measures that could reduce the general fund levy by some $65,000. Meanwhile, the recent miscalculation compromised the board’s October 25 efforts to produce a budget that came reasonably close to meeting the state-mandated 2 percent cap on property tax increases.

The board voted at the October 25 meeting to adopt a local law to override the tax cap if necessary. In light of recent developments, implementation of the measure appears increasingly likely, if not inevitable.

The budget’s major elements are the general fund and the highway fund, as established by the Town Board; the library budget, which voters must approve; and the fire district budget, which is subject neither to voter approval nor modification by the Town Board. Together, the four elements compose the townwide levy, the portion of the total municipal budget to which all taxpayers contribute.

Voters in September approved a library budget with a 2 percent tax increase. The fire district budget carries a similar tax hike. Under the current preliminary town budget, the tax levy for the general fund would rise by 7.7 percent and for the highway fund by 2.1 percent. The tax increase for the general and highway funds combined would amount to 5.9 percent, while the townwide levy would rise by slightly less than 5 percent. The preliminary budget includes no cuts in personnel.

Far from endorsing the tax cap, most speakers at the sparsely attended public hearing urged the board to forgo proposed budget cuts or, in certain cases, even increase spending. A proposal to eliminate health insurance for six part-time elected officials — two town justices and four Town Board members, excluding the full-time supervisor — drew particular scrutiny in the case of five-term justice Frank Engel, the town’s longest-serving elected official.

A provision in the town’s recently revised employee handbook stipulates that the two sitting justices, Engel and Richard Husted, are to receive health insurance for as long as they remain in office. Therefore, said some of the speakers, the recent proposal to eliminate the benefit amounts to a broken promise and a revelation that might have led Engel to reconsider his current bid for reelection.

Court clerk Kathy Longyear, residents Lori Ruff and Jane Kelly, former police officer Carol Sas, and town clerk Jackie Earley urged board members not to jettison medical coverage for the two judges, who were described as creative and sympathetic in their administration of justice and singularly committed to the service of the town. (Kelly also recommended a restoration of funding for Family of Woodstock.) Noting that the justices are frequently summoned when they are not officially on duty, the speakers maintained that it was inaccurate to classify them as part-time employees.

Said Engel, who participated in the revision of the employee handbook: “There is no such thing as a part-time elected official; this is my life. A quid pro quo agreement was made to ‘grandfather’ me and Richard Husted to receive health insurance as long as we served. Promises were made. I have no other source of health insurance. It’s huge. I just want you to know from my heart that this is my life. I am dedicated to this court and this town.” Engel added that his upcoming eligibility for Medicare would reduce the town’s obligation to him.

Councilwoman Cathy Magarelli recommended that the board explore ways to accommodate the judges. McKenna agreed, adding that any solution should apply not only to the justices, but equally to their counterparts on the Town Board. “Perhaps there is a middle ground, whereby the justices and the board members would increase their health insurance contributions, from (the current) 15 percent to 30 or 40 percent.” Moran estimated the cost of retaining health insurance for the six elected officials as $46,000, or about 1 percent of the general fund budget.

Councilman Jay Wenk strenuously objected to the “part-time” designation for elected officials, which he deemed arbitrary, ridiculous, unethical, and immoral. “Everybody who gets a check from the town is an employee,” he said, citing the handbook’s distinction between employees and certain elected officials. The latter group, said Wenk, routinely interacts with constituents during off-hours and puts in time that goes unnoticed by the public.

 

Saving suggestions

Other speakers at the hearing touched on different subjects. Weston Blelock and Julia Blelock exhorted the board to restore at least half of the town’s previous $10,000 annual contribution to the Woodstock Arts Consortium, whose activities include promoting the town as a “cultural tourism” destination. Jay Cohen cited three suggestions, from a list of 23 that he has forwarded to the board, for increasing revenue: sell Town Hall for a prospective buyer’s offered price of $800,000, with the proviso that the deed designate the building for historic preservation; reduce attorney fees by paying a single town attorney on a retainer basis; and pare energy costs at the highway garage, beginning with a mechanical engineer’s analysis of heat loss at the facility.

Steve Grenadir endorsed a proposal, long championed by Wenk, to increase revenue by charging for parking at the town-owned Mountain View lot. “I would like to see a minimal amount of money in the budget to at least experiment” with paid parking, he said. “It’s a good idea, a win-win. I doubt that any visitors to town would object to paying $5 a day for parking.” Wenk put the estimated cost of preparing the lot for paid parking at $23,000, excluding the installation of guardrails. He predicted that the lot would generate a minimum of $10,000 in annual net revenue.

Iris York recommended that the town save about $12,000 by abandoning a plan to test the water system in order to receive a state permit for an expanded water district that would include the Woodstock Commons affordable housing project under construction by the Rural Ulster Preservation Company (RUPCO). The district’s current customers would pay the cost of any testing. “If you polled the water district users, they wouldn’t want their taxes to increase at all for RUPCO’s benefit,” said York. “The town had a viable alternative: withdraw the permit application and let RUPCO build its own wells.”

In remarks before the public hearing began, York expressed outrage that Moran and McKenna had met with a state Department of Environmental Conservation (DEC) official about water testing without informing or involving the other Town Board members. Magarelli and councilwoman Terrie Rosenblum confirmed that they had not been apprised of the meeting, while Wenk objected to his own exclusion from the process.

Moran responded that funds to cover testing were already included in the water district budget, which is a separate taxation entity from the overall town budget. Robin Segal, disputing Moran’s contention that the DEC had endorsed the proposed method of testing (see Woodstock Times, October 27, 2011), maintained that the town was now incurring fines for failing to meet DEC deadlines for water tests.

At the outset of the public hearing, resident Tom Jenkins voiced surprise at the relatively low turnout, given the hot-button issue at hand: taxes. He spoke again near the end of the session. “Woodstock is a beautiful town that provides great services. I don’t think that there should be cuts in anything,” Jenkins said, noting that he had received critical assistance from the dispatch and fire departments over the years. “People should either accept that taxes go up, or support a special assessment to balance the budget.”++

 

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