JAMESTOWN – Mayor Sam Teresi has released his proposed 2016 city budget, calling it a “crisis” budget with little left to cut in the way of expenses, while also relying on a significant property tax increase in order to balance the numbers.
On Wednesday afternoon the four-term mayor presented a $35,120,412 budget that increases spending by just .3 percent over the 2015 city budget.
Jamestown Mayor Sam Teresi (left) presents his Fiscal Year 2016 Executive Operating Budget on Wednesday. City Comptroller Joe Bellitto (second from left), Ward VI Councilman Tom Nelson, and Ward III Councilman Alfonso Pagan also appear in the photo. (Photo from JamestownNY.net)
However, due to a depleted fund balances along with lower revenue from other funding sources, the proposed budget is calling for an increase in property taxes by $1.27 per $1000 assessed value, bringing the new proposed tax rate to $23.94 per $1000, equating to a 5.6 percent tax rate increase.
The total proposed property tax levy is $15,923,550, $700,000 over the NYS tax cap for the city.
Teresi said that he’s aware the proposed tax increase is significantly high, and expects that it will be reduced in the coming weeks once the city council begins budget deliberations.
“The council members and I are going to be looking at things both on the longer-term basis, but we’re also going to continue to look at things within this budget that I didn’t feel comfortable with at this juncture, bringing forth unilaterally, but I am going to be bringing forth discussion to the council members, other things that can be done on a short-term basis within the confines of this budget.”
CONTRACTUALLY OBLIGATED SALARIES, BENEFITS DRIVE COSTS
According to the mayor, salaries and benefits for city employees continue to be the primary expenses for the city, comprising 77 percent of total spending in the budget. And the mayor said that the vast majority of those salaries involve the city police, fire and DPW workers, who the city is contractually obligated to pay.
Mayor Sam Teresi during Wednesday’s budget presentation.
“The only salary increases that will be in this budget are those that the Triborough Amendment of the NYS Taylor Law protects for salary step increases for employees that are not already at the stop of their salary schedules,” Teresi said. “No management employee, no council member, no mayor, no employee of the city – that is not Triborough Protected – do we have any money in this budget for salary increases for 2016.”
The mayor also said that due to state law, the city is not able to change what it is contractually obligated to pay its workforce, adding that much of the healthcare and retirement benefits employees now receive are the result of lock-in agreements that were made 30 years ago.
“Quite frankly it’s panned out that some of the decisions that have been made, have been suicide,” Teresi said. “They’ve hurt us in the long run. What seemed like what made a lot of sense in 1986 and 1987 doesn’t make a heck of a lot of sense in 2015 and 2016, and is basically the lion’s share of what is dragging this budget down.”
The mayor also noted that cutting the workforce isn’t an option, because it is already as low as it can possibly go without the city having to pay a large Impact penalty and overtime that would drive up costs even further.
PROPERTY TAX LEVY REACHES CONSTITUTIONAL TAX
The 2016 proposed city budget also creates a problem for future spending plans, with the tax increase bringing the city to 99.9 percent of its constitutional taxing limit, meaning that state law prevents the city from raising taxes any higher, even if it wanted to. That’s not only an issue in 2016, but also an issue in future years as well. Unless the city is able to bring in new taxable properties or the overall assessed taxable property value goes up, the tax rate won’t climb any higher than where it is in the proposed 2016 budget.
Other highlights of the proposed budget includes:
- No increase in fees or fines;
- A Nearly 50 percent decrease in the profit dividend payment from the Jamestown Board of Public Utilities (the city used $482,000 in 2015, but the executive budget calls for a dividend payment $250,000 for 2016);
- The complete use of the city’s remaining undesignated fund balance ($409,753), meaning the so called “rainy day” fund will be completely depleted after 2016;
- A projected 2 percent increase in projected sales tax revenue ($5,875,000 in 2015 to $5,990,000 for 2016).
The mayor said there may be a silver lining to the budget situation and he will be rolling out several recommendations for structural changes in city government to address the challenges the city will face in the coming years, adding that he’s confident some of them will be implemented. But he added it won’t be in time for 2016, making it a crisis budget year for the city.
The city council will review the budget in the coming weeks with all department heads to try and identify additional savings. A copy of the budget presentation can be found online at JamestownNY.net. Line by line copies of the budget can also be found in the city treasurers office at city hall as well as at the Prendergast library.
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