Ulster town officials posted the details of a tentative 2017 municipal budget this week, an $11.26 million spending plan that would increase spending by 0.57 percent over the current budget, and would increase residential property tax by 0.93 percent. Including special districts, the tentative budget has a 0.59 percent overall tax levy increase, below the 0.68 percent tax levy increase cap.
Town Supervisor James E. Quigley III said the budget was difficult to craft, but less so because of fiscal decisions made over the past few years.
“In prior years I’ve chosen to be conservative in budgeting for items like court fees, mortgage recording tax, building permits, planning board revenues, third party reimbursements for expenses, things like that,” he said. “This year I had to pull out all the stops and basically put in what I was comfortable with, and some of it’s a little aggressive and some of it’s going to be a challenge, but we’re going to have to push for it.”
Quigley added that while personnel matters continue being costly for the town, they’ve found ways of keeping costs down as much as possible with both salaries and benefits.
“Previous decisions that we’ve made over the years include employee incentive for early retirement, and we replaced those employees with younger employees that were in different medical brackets, they were in different pension brackets, and that’s been able to give us some cost savings,” he said. “We’ve switched around some of our medical insurance and have been successful in negotiating greater employee contributions towards their medical insurance; not that it’s a great savings in the total number, but it is a start. We now have in the general town employees’ contract an obligation of the employee if he wants health insurance to go to what is currently the lowest-cost insurance program that the town offers. Those actions are bearing some fruit, so to speak, in providing us some cost relief.”
In the tentative spending plan, the supervisor’s annual salary would remain static at $44,000, with town board members’ salaries holding steady at $10,000. Highway Superintendent Frank Petramale’s salary would increase to $63,673, while Town Clerk Suzanne Reavy’s salary would rise to $50,938; both are 2 percent increases. Elsewhere, the two town justices would receive 1.96 percent increases, bringing their salaries up to $42,448 each.
But Quigley added that employee benefits are getting tougher to manage, especially after retirement.
“Every time there’s a retirement and the town goes to fill the vacant position with a full-time employee, you’re effectively doubling up on health insurance,” Quigley said. “If there’s anything that is the biggest weakness that we’ve seen over the last couple of years … post-retirement healthcare town-wide has almost doubled. We have two scheduled retirements in the next year, and there’s whispers in the wind of other retirements. You never know when they come. For example, if two police officers were to retire, that’s $50,000 in post-retirement healthcare, and that’s a 1 percent tax increase, and when that happens I’m challenged in finding other areas to find cost efficiencies, and it’s becoming increasingly difficult.”
Total retiree healthcare in the town came in at $322,887 in 2013; in the tentative 2017 budget, that total has risen to $761,612. “What’s driving this budget is basically employee compensation and benefits,” Quigley said.
But there are other concerns as well. An April decision by the Appellate Division of the New York State Supreme Court reduced the assessments for 22 parcels at TechCity, dropping their overall value by over 26 percent to roughly $30 million. What that means for the town is a refund owed to TechCity of around $785,000 and a loss of taxable assessment value of around $14 million. But Quigley added that because property taxes in the rest of the town increased, the town’s tax roll only fell by $6.85 million to a total of $1.02 billion.
“And that’s because there has been strong growth in other areas, and there are underlying projects that will come on the tax roll in 2018, 2019, 2020, that will help mitigate the losses from TechCity,” Quigley said.
In July, Quigley detailed a plan to shift a series of fund balance surpluses in the town to cover around $646,000 in refunds.
While the appellate decision was viewed as a win for TechCity, most of the money refunded by the KCSD and the town won’t be paid to Alan Ginsberg, the owner of the business center; Ulster County paid the town back taxes when TechCity didn’t always meet its obligations during the period covered by the settlement.
In July, Quigley said that the fund balance process, while laborious, was possible because of the town’s relative fiscal health.
“These numbers and the audited financial statements that have been presented tonight to the Town Board and which will be published on the town’s website, indicate that at the present time the town is in a healthy financial condition,” he said.
This week, Quigley said issues with Liverpool, New York-based PCK Development Co. LLC, the owner of the Hudson Valley Mall which defaulted on a debt of nearly $50 million earlier this year and saw the property foreclosed upon, are looming in the future. An increase of $50,000 in the legal expense line item in the assessor’s office on the tentative budget would be earmarked for fighting tax certiorari litigation.
“These provisions are much greater than they have been in the past because there is a problem coming and we’re anticipating it,” Quigley said. “And we’re trying to provide for it as best we can.”
“I just want to be clear,” the supervisor added. “The potential PCK loss from the Hudson Valley Mall tax assessment case is equivalent to the assessed value that Niagara Water would have had in place had they built in this town. That just goes to show you how critical from a tax base [perspective] that the loss of that project was.”
A public hearing on the budget is expected to be set for the Town Board meeting scheduled for Thursday, Oct. 20.