The wrench in Olive’s budget

The tentative $4.3 million “wish list” budget for the town of Olive was presented as an easy lift of 1.867 percent over current spending amounts at a special meeting at the Olive Town Hall in West Shokan Friday, October 5. But then, according to town supervisor Sylvia Rozzelle, two issues were introduced.

“One’s minor, one’s major. Together they push us above the state’s tax cap, no question,” Rozzelle noted in a phone conversation as she prepared for the October 9 regular town board meeting. “The ‘minor’ item is a final bill for the police retirement agreement that we signed in August that requires us to put in an additional $18,000 for the year.”

The major item was a return to assessment issues involving the New York City-owned Ashokan Reservoir that makes up much of Olive’s taxable property, and a New York State Office of Real Property Services announcement this past summer that said reservoir has been undervalued by the town to the tune of $81 million. 

“It’s kept me tossing and turning all night all weekend,” Rozzelle said of the potential assessment nightmare that could put Olive in a legal vise, squeezed between New York City and the State. “The city is happy, the town is happy, but the state’s not happy? We’ve been in this stuff for 100 years now. I want to go with interim assessor, go to city, and come up with an agreement to go to the state with…in its last lawsuit state said we had it overvalued…what’s changed?” 

If the assessment were higher, New York City would pay more taxes. “But we’d get a lawsuit, too. It can’t be justified,” said Rozzelle. 

Almost ten years ago, New York City and Olive came to a historic agreement on the Reservoir’s value, which sets the amount of taxes. “They’re the largest taxpayer in Ulster County, total value of  $553,663,657…that’s a big chunk, but that’s in the agreement. They’re happy and we’re happy. We need to sit down with the city and say listen, let’s see what we can work out with the state. They have the resources to help us with the state. 

“At worst, this could result in a million dollar lawsuit or our equalization rates going bananas…and from what we’re hearing it’s all based on a feud between [New York Governor Andrew] Cuomo and [New York City Mayor Bill] de Blasio…I’m not saying it is, but nobody is saying it isn’t.”

Rozzelle added that discussion among town board members present at the tentative budget presentation on October 5, and the October 9 board meeting, were leaning towards setting aside between $75,000 and $100,000 in the 2019 budget to cover the legal and accounting costs associated with “a sit down with City officials who are in agreement that this needs to be fought.” That’s partly because such discussions, and legal battles tie-in with Olive’s need to renew the 10-year agreement with New York City regarding the evaluation of the reservoir property that comes up in the coming year. But also due to the fact that, as Rozzelle put it, “we just don’t have a half million available to do another reval, like ORPS (the state) suggests.”

Complicating matters, Rozzelle said, was also the fact that when the town’s attorney on such assessment matters, Albany-based David Murphy, went to the New York State Office of Real Property Tax Services (ORPS) on July 31 to discuss their undervaluation claim, the state agency claimed it had lost “many of its file boxes” during a recent move.

“We brought them boxes and boxes of material backing up our figures and they replied with two 8½ by 11 sheets of paper with two lines of typing on each,” the supervisor added, her voice rising. “Then they talk as though doing revals is easy, and such $400,000 to $450,000 costs aren’t a hardship for a small rural town like Olive.”

New assessor in training

As for actual town budget figures, to be discussed as Olive moves towards a preliminary and then a final budget in scheduled budget talks set to take place October 11, 15 and 18, Rozzelle said that the key thing to remember is that every new $43,000 in spending without new revenues represents a 1 percent hike in the budget’s tax levy. But she added that the police retirement agreement had already put Olive above the mandated tax cap; now the question was how much higher the town would be forced to go over.

“Fortunately, this being my last year in office, I don’t see us fighting on the board about this,” the supervisor added, acknowledging the majority plus one requirement for enacting budgets over the tax cap mandate. “By next year, though, I expect the town’s politics to get loud again.”

She added that the current assessment issues come at a sensitive time, with the town’s interim tax assessor, Bob Breglio, training a new assessor, Dianna Carchidi, as major shifts in that department are underway for the coming year.

“We’re between a rock and a hard place,” Rozzelle said. “It would be nice if the county or Onteora school district stepped in here to help out the Olive taxpayers.”++