By LIZ BUTTON
The proposed 2014 Rye City operating budget comes in at $50.3 million, which carries a 2.52 percent property tax rate increase if passed.
Rye’s acting city comptroller, Joe Fazzino, presented City Manager Scott Pickup’s recommended budget at the Nov. 6 City Council meeting. The budget shows continued improvement in fund balance after the 2008 recession and $2 million worth of spending on capital projects, according to Fazzino. The proposed budget projects $34.6 million worth of general fund spending.
If the budget is passed in its current state, the city will increase the property tax levy to $21.1 million. This amount is $566,206 over the 2013 tax levy. But, according to Fazzino, the total tax levy increase is $37,144 under the tax cap.
The proposed tax levy increase falls under the state’s 2 percent cap for property tax levy increases, which this year the state has calculated at 1.66 percent due to the consumer price index rate running below 2 percent; this affects Rye because the reformulated cap applies to all municipalities in which the next fiscal year begins Jan. 1, 2014.
The proposed property tax rate is $152.67 per $1,000 of assessed valuation. The average household will pay an additional $92 in property taxes per the new rate.
Fazzino described Rye’s financial outlook as “mostly a positive budget situation for 2014.” This is in part because the city once again has the ability to fund capital projects, some of which the city put off until conditions proved financially prudent to undertake them.
Looking at the use of fund balance for capital improvements from 2007 to 2014 reveals a steady decrease through the years; such expenditures dropped to zero in 2012. Then, in 2013, the use of fund balance for capital expenditures began increasing again to $195,000 and now, in 2014, has risen sharply to $2 million.
The city sold the 1037 Boston Post Road property in May, leading to less rental income in 2013 but also to less expenditures in building maintenance, thereby helping the city to restore fund balance to fund new capital projects.
In the 2014 budget, capital improvements in the amount of $2 million will form the bulk of expenditures from unassigned fund balance, which totals $5.2 million as of the end of 2012.
Proposed capital projects that will use money from the city’s capital projects fund in the amount of $650,000 include a $50,000 Blind Brook study to assess the possible need to repair walls that sustained damage during the April 2007 floods. It also includes $50,000 for a study on replacing the Rye Nature Center Bridge, $100,000 dedicated to sidewalk repairs and another $100,000 dedicated to sewer improvements, as well as $50,000 for a study of a master plan for Disbrow Park, which would explore how to better segregate public works facilities from park operations.
An amount of $200,000 has been allocated for street resurfacing in 2014, thereby restoring the level of funding the city was allocating for the work prior to the 2008 recession.
The city will also be paying $100,000 for a study to revitalize the city’s master plan, which was last revised in 1986, Fazzino said. An update was begun in 2000, but this was never finished. The $100,000 would go toward consulting services for a plan involving community outreach, document preparation and environmental review.
The most money to be spent on capital improvements, $1.25 million, which comes from unassigned fund balance has been reallocated from the building and vehicle maintenance fund to pay for improvements to the joint police and court building. Deficiencies in the current facility were identified by the Office of Court Administration and are part of the city’s current Capital Improvement Plan.
Apart from these capital projects, the specific projects included in a $1.7 million bond referendum passed last year will be designed and bid during 2014.
When it comes to employee benefit costs, Fazzino, said, that “for the time being, pension rates have stabilized,” but health insurance costs continue to go up.
New York State employee retirement rates for 2014 have actually gone down, representing a positive development for the city, which has been experiencing double-digit rate increases since 2010, he said.
Personnel costs are expected to increase by $997,050 or 4.7 percent over the current budget.
In part, these costs rose due to the fact that all of the city’s union contracts will expire at the end of this year.
These rising costs include employee health insurance expenses, which will rise by $306,000 or 14 percent from the current budget, and an increase in salaries for Rye City employees, which are up by $582,000 or 4.8 percent.
This year the city has 146 staffing positions, and this year has budgeted for 149 full-time equivalent positions. The city plans to spend $70,000 to $80,000 to add an assistant building inspector position and $61,000 to hire an additional police officer to stand in for a longtime injured member of the force.
In terms of 2013 profit projections, Fazzino reported the Finance Department expects the city to have a profit of $1.5 million in 2014, which is largely a result of the city revenues rebounding from the 2008 recession.
A number of these city revenue streams performed better than budgeted for in 2013 and will go toward offsetting 2014 expenditures. The city can thank this year’s real estate market boom for an increase in revenue: The mortgage tax delivered $975,000 better than budgeted for in 2013.
Other city revenues outperformed budget as well. Revenue from building permits increased due to a rise in construction activity, bringing in $605,000 more than was budgeted for last year. The city also received $704,000 in unbudgeted revenues from FEMA reimbursements for Hurricane Sandy.