(Editor's Note: The following is from Nicholas Episcopia, chair of the Garden City Board of Trustees Public Information Committee regarding the village's budget process. Trustees were slated to vote on the budget April 6.)
The 2009-2010 village budget process presented the board of trustees with a set of problems not faced in many years. The steep economic downturn has affected all levels of government, from federal to state to local. Garden City is no exception. Village revenue losses are significant.
Nevertheless, through serious reductions in the capital and operating budgets and various revenue enhancements, trustees have been able to reduce the village tax increase to 5.9 percent from a possible 10 percent, resulting in an estimated annual tax hike to the average household of approximately $300.
The village budget for 2009-2010 has been reduced to $52,800,000, a decrease of $5,166,000 from the original village budget of $57,966,000 proposed by the department heads.
It should be noted that a certain level of services must exist in order to maintain the quality of life residents of Garden City have come to expect. Most importantly, our primary responsibility as a government is to maintain public health and safety. Thus the funding, at a responsible level, of police, fire and public works services must be our first concern. We believe this difficult budget process has achieved these principal goals.
As in recent years, the board of trustees has taken into consideration suggestions presented by the Citizens Budget Review Committee (CBRC), as well as other residents. The board of trustees understands that no one likes tax increases. But Garden City is not a private sector corporation, where management can simply cut costs by eliminating people and positions at will. As a municipality, Garden City is subject to New York State laws, rules and procedures, in addition to union contracts and civil service regulations. This combination can be burdensome to taxpayers but must be followed.
What follows is a review of the facts of the village budget process: revenue losses, the capital and operating budgets, expense cuts and revenue enhancements. We urge all village residents to familiarize themselves with these facts that have combined to produce the current budget problem and the board of trustees' response to it.
Our revenue from interest earned on short-term investments and mortgage-recording taxes was more than $900,000 less than forecasted. This was due to unprecedented low interest rates (average earned below 1 percent compared to 3 percent plus forecasted) combined with the decline in home sales and resulting financings. The drop in these first two revenue sources is unprecedented in recent years. In addition, tax certiorari actions equated to a loss of approximately $800,000.
It should be noted that our revenues last year were augmented by using the $1,700,000 St. Paul's reserve fund to lower the tax burden, and it can be said that this amounts to simply returning the taxpayers' money to them. But it can also be argued that keeping some of this money in reserve would have enabled its use to offset part of the unanticipated declines in revenue this year.
Therefore, to offset the current loss in revenues, not only was it absolutely necessary to make substantial reductions in every part of the 2009-2010 operating and capital budgets, it was also necessary to raise certain fees and implement new ones.
The initial 2009-2010 capital budget presented to the board of trustees by the village department heads totaled $5,038,930. The major items in this presentation included over $3,000,000 in parking lot, roadway, sidewalk and curb repairs or replacements; replacement of vehicles and other equipment for the police, fire and public works departments; installation of synthetic turf playing fields; and improvements in technology which would have produced certain savings in energy costs. This proposed budget was deemed far too excessive and was sent back to village staff for a reduction.
The first reduction brought the capital budget down to $3,238,326. The major item eliminated was the replacement of certain parking lot surfaces and some road repairs, as well as the elimination, or deferral, of such items as the installation of synthetic turf ball fields. After careful analysis, the revised capital budget was also returned to village staff for further reductions.
After much analysis and discussion by both village staff and trustees, the number was cut by over 40 percent to $1,872, 862. Major items eliminated were a new fire truck, several new police cars and public works equipment, all new synthetic turf playing fields, all library capital requests and over $1,000,000 in sewer, road, curb and street repairs.
Although the deferment or replacement of capital items not considered totally necessary this year helped to minimize the tax increase, many of these capital projects and purchases cannot be delayed for an extended period of time. Our long-range five-year capital plan should not be dismissed as maintenance of our infrastructure is critical. Hopefully, the current drain caused by the loss of interest and recording taxes will abate with a revived economy. This, combined with new fees and surcharges, should ease the tax burden in future years, when these capital expenditures must be incurred.
Before going into the major components of the operating budget, it should be noted that out of approximately 300 village employees, only eight are not subject to the conditions of either a union contract or civil service regulations. We are acutely aware that labor costs are high. However, we cannot address the situation in the manner some residents continue to insist that we follow. For example, comparisons to steps taken by distressed corporations, such as General Motors, are simply not correct. Garden City cannot make arbitrary personnel changes that conflict with existing agreements, and we cannot declare Chapter 11 bankruptcy in an attempt to negate union contracts or civil service provisions.
We have thoroughly investigated various ways to reduce labor costs by eliminating certain full time positions. However, one labor contract forbids excessing full-time personnel until all part-time personnel have first been eliminated. While certain full-time positions could be eliminated, there are also seniority provisions in the contracts, which protect long-term employees. Likewise, assigning volunteers to handle certain responsibilities of paid employees is subject to strict rules of the contracts.
Garden City has just settled a two-year retroactive contract with our police union, which expires in May 2009. This summer, negotiations will begin on a new contract. We have been in negotiations with the firefighters for approximately 12 months and the CSEA contract has approximately one year remaining.
In some of our union contracts, if no compromise is reached, then binding arbitration is the law. Both mediation and binding arbitration involve payments to third parties. There is also no guarantee that the village would benefit. A prime example was when Nassau County went to arbitration, and the final decision actually was worse for the county than the original proposed settlement.
Residents, especially those who attended our budget work sessions, as well as union representatives, should remember that the board of trustees and senior village staffs are, first and foremost, concerned with health and public safety issues. Garden City now has a response time of two to three minutes, which is critical when lives and property are at stake. Some residents have ardently suggested that we use some type of national benchmark of a 10-minute response time to a fire alarm. Garden City cannot be compared to a rural area and we will not apply this type of benchmark. Likewise, it was suggested that volunteers, rather than paid firefighters, staff the two substations on weekends and at night. This change was studied, but not implemented for personnel and contractual reasons. The closing of the fire substations was also discussed and rejected because residents in the southeast and western areas of Garden City would have a much longer response time without these substations. The exact amount of the increase in time would depend on traffic conditions and closed railroad crossings.
The Garden City Police Department is not only an effective crime fighter and deterrent, but also the first responders to many medical emergencies. Here again the police response time is between two and three minutes. Additionally our police and associated civilian employees are substantial producers of revenue. In 2008, a combination of parking and various moving traffic fines generated close to over $1,100,000 in revenue. When staff is reduced and officers are moved from traffic enforcement to patrol duty, there almost surely will be a decline in fines.
With these contract constraints and public health and safety in mind, trustees and senior staff decided on a wide variety of expense cuts. We are not replacing four vacant police positions and considering a possible restructuring of posts and tours to reduce overtime. Two paid firefighter positions are not being filled, and fire truck crews have been restructured to reduce overtime. $180,000 was cut from the library's operating budget. An estimated $122,000 will be saved by not heating St. Paul's. Non-personnel expenses were reduced across the board and overtime cut in Purchasing, Public Works and the Recreation Department. Part-time and seasonal employees in Public Works and Recreation have also been eliminated. Unfortunately, this will result in reduced winter programs at Cluett Hall, the elimination of ice skating at Lake Cornelia, as well as some summer, evening and noon time concerts. These actions resulted in the elimination of approximately 11 positions and a reduction of close to $1,500,000 in operating expenses.
In addition to these budget cuts, village staff was required to submit suggestions for new revenues. These enhancements were forecasted to increase village income by over $800,000. Major new increases are $286,000 for commercial rubbish pick up, $121,000 in overweight truck fines and $55,000 in charges by our Fire Department for LIRR, LIPA and National Grid emergency calls. Others are increases in various building permits, site plan approvals and a $50 increase in the annual railroad parking permit fee. Items still being discussed will be some type of fee for playing field usage and charges for special residential rubbish pick ups. The above actions reduced the village tax increase from a possible 10 percent increase to 5.9 percent, with an estimated annual increase to the average household of approximately $300.
Residents should understand that the budget and spending process is ongoing. Simply because an item is budgeted does not mean it has to be spent. Items still under consideration are contributions by non-union staff to the medical plan, a reduction in the number of village-owned cars, strict review of employee travel for training and seminars and charges to groups sponsoring parades and street festivals. Although no one is happy with the tax increase, taxpayers should recognize that the average tax increase over the last four years was 3.20 percent, with a 0 percent increase in 2007-2008. The board of trustees will remain ever diligent in searching for ways to continue reducing expenses.