The 2014 executive budget prepared by Jamestown Mayor Sam Teresi is under the state's tax levy cap, but does include a tax increase.
On Tuesday, Teresi presented his proposed budget to the public during a meeting in the Mayor's Conference Room in City Hall. The tax levy increase - money raised through property taxes - is $386,920, or 2.68 percent. The tentative tax levy total is $14,824,747. The tax rate is being proposed to increase by 55 cents, to a total of $22.18 per $1,000 assessed property value. The total budget increased $385,014, or 1.6 percent, to a total of $33,603,149.
The release of the executive's budget is the start of a three month process. By Dec. 1, the Jamestown City Council needs to pass a budget or the original executive budget goes into effect for the city's fiscal year, which is Jan. 1 to Dec. 31. Teresi said the legislative branch - City Council - has authority over the budget. The council will start budget worksessions on Monday, Oct. 21, and work through each department's budget to finalize a spending plan. If the council adopts the budget by the Dec. 1 deadline, Teresi then has a week to decide if he will veto any line item in the budget. If Teresi does veto an item, the council then will have a chance to override with a supermajority vote.
Jamestown Mayor Sam Teresi delivers his executive budget speech to members of the Jamestown City Council and department heads in the Mayor’s Conference Room in City Hall.
P-J photo by Dennis Phillips
Salaries for city workers increased by $436,532, or 2.9 percent, in the
P-J file photo
The James Prendergast Library will receive $7,000 less.
P-J file photo
The capital budget would increase from $750,000 to $920,000.
P-J file photo
''It is a difficult process and there is a fine line ... to make this a city worth living in and working in,'' Teresi said about the budget process.
One of several positive aspects of the budget Teresi discussed was a surplus fund balance. He said due to tight day-to-day management of city operations by department heads and staff, the city ended 2012 with a $2,820,312 fund balance - $1,020,512 of which falls within the unassigned category. Teresi said this number isn't robust, but it is better than the $1,371,007 fund balance deficit the city had in 2001.
''It is a difficult process and there is a fine line ...
to make this a city worth living in and working in."
|Expenditures 2013 Budget 2014 Proposed Budget|
|Salaries $14,866,801 $15,303,333|
|Benefits $10,208,000 $10,057,000|
|Contractual $4,660,050 $4,756,550|
|Debt Service $2,260,984 $2,093,566|
|Agencies $403,800 $396,000|
|Capital $750,000 $920,000|
|Equipment $68,500 $76,700|
Because of the surplus fund balance, Teresi will use $305,000 for the 2014 spending plan. Even though this use of fund balance offsets a possible larger tax increase, Teresi said the use of fund balance is also a concern for city officials. The city also used $390,000 of fund balance in the 2013 spending plan. He said if the use of fund balance is unchanged in the budget, by the end of 2014, the city will only have $420,000 left. The mayor said he would urge city council members to use ''extreme caution'' in proposing to use any more of the city savings in the 2014 budget.
''A positive fund balance we do have, which a lot of municipalities do not,'' he said.
Another positive Teresi said is utility revenues from the five enterprise funds operated by the Jamestown Board of Public Utilities. He said the revenues are projected to be $4,194,000. The mayor proposed to use a portion of the revenues as a profit dividend to put toward the 2014 budget. He said $400,000 will be used from the electric and $75,000 from the water.
Last year, for the first time in 50 years, the city used the same BPU profit dividend toward the budget. In the 2013 budget, $300,000 was used from electric and $120,000 was used from water revenues.
''We built the profit into the budget,'' Teresi said.
More good news for the city included an increase in assessed property values. Teresi said the city's assessment went up $1,122,357. Teresi said there was no new large addition accounting for the increase. He said it was due to small, steady and modest gain in an improving housing market.
''There was no silver bullet,'' he said.
Another positive is the city being in compliance with the state's tax levy cap. Teresi said the city is $63,505 under the tax cap that is 3.1 percent for the 2014 Jamestown budget. The state's property tax levy cap law went into effect in 2011. Under this law, the growth in the property tax levy is capped at 2 percent or the rate of inflation, whichever is less. The mayor said because the rate of inflation is lower than 2 percent, the state's tax cap for all municipalities is 1.6 percent. This cap can also be adjusted for each individual municipality based on several factors from municipal bond debt payments to how much lower the city was under the previous year's tax cap. Teresi said the actual cap for the city in next year's fiscal plan is 3.1 percent.
However, Teresi said this is the financial ''snapshot'' now for the city. He said with revenue projects changing and the City Council still to determine the final city budget, this picture could change.
One of the main concerns in the executive budget is the cost of employee salaries and benefits. Teresi said salaries for city workers increased by $436,532, or 2.9 percent, in the proposed budget. Under benefits, the cost for retirements will also increase in 2014. Teresi said several scheduled retirements will increase appropriations even more. He said the city's retirement package includes payments like vacation and sick time for days not used by the employee. He said sometimes these buyout package payments exceed the employee's annual salary.
Another challenge is the ever-increasing state retirement system obligations. He said the costs for the retirement system has increased 4,000 percent since he took office in 2000. Teresi said the city will be making an alternative payment option instead of paying the full amount in 2014 for retirement benefits. The amortization payment was the only option for the city or it would have exceeded its constitutional tax limit. However, Teresi said if things improve and extra revenue is found, city officials will make a larger payment toward its retirement system obligation.
Another point of interest in the 2014 executive spending plan is a decrease of $7,800 toward three city agencies - the James Prendergast Library, Fenton History Center and the Jamestown Area Senior Citizen Center at Jamestown Community College - assisted with allocations in the city budget. Teresi said the library will receive $7,000 less, Fenton will have a $300 reduction and the Senior Citizen Center will lower by $500.
Greg Rabb, Jamestown City Council president, said the executive budget goes into great detail and is a useful way to start budget deliberations. Rabb encourages the public to get involved in the process by attending budget work sessions or by viewing the document, which can be found at the Prendergast Library and at City Hall in the mayor's and clerk's offices. The executive summary for the budget can be viewed at jamestownny.net/uploads/FY2014%20Budget%20Center/FY2014%20City%20of%20Jamestown%20Executive%20Budget.pdf.
''The hearings are open to the public ... take time to look at this because there is a lot of detail,'' Rabb said. ''We could always use more eyes.''