Mayor Michael Villa submitted his proposed budget for the upcoming 2018-2019 fiscal year yesterday. The budget calls for a property tax rate of $17.05 per $1,000 of assessed value, which is a 7.32% increase over the current year, making it one of the biggest proposed increases in at least ten years, one which would exceed both state and local tax caps.
The proposed property tax levy of $5,689,556, along with sales tax, state aid, fees, and a $1.2 million transfer from the water fund, balances $16,638,365 in general fund expenses, which have risen by $347,175 over last year.
Residential flat user fees for sewer and sanitation services are proposed to increase by 4.02% and 4.96% respectively. However total flat user fees would drop from $912.79 per year to $860.87, an overall 5.69% decrease, due to a $17.43% decrease in flat water fees.
At a budget workshop meeting held Wednesday evening, council members Jim Martuscello and Chad Majewski questioned both the large tax increase and steep water rate drop. Majewski pointed out that under the proposed budget, the city stands to lose $110,981 in metered water revenue to the Town of Florida, and $113,008 to the Town of Amsterdam. Martuscello suggested raising the rate close to what it was last year, and increasing the transfer from the water fund to the general fund in order to lower the tax rate.
Four council members (Alderman Bill Baaki was absent) agreed unofficially to remove $300,000 in revenue from the general fund attributed to the expected sale of the Chalmers property on the city’s south side to KCG Development. While council members all expressed support for the project and hoped the sale will be completed, they expressed concern that the revenue had already been budgeted for the current year, but had not yet been realized.
While city officials had been hopeful the sale would be completed by June 2018, neither the original letter of intent nor the purchase contract signed last year required KCG to close before the end of the fiscal year. While Stacy Kaplowitz of KCG said last week that she hoped the sale to be completed by the end of 2018, under the purchase contract, KCG can back out of the deal at any time during the “inspection period” which the developer has the option to extend out as far as April 2019.
Taking into account the reduction in revenue, Controller Matthew Agresta said the council will need to cut expenses or find revenues totaling approximately $600,000 in order to bring the property tax rate under the state cap.
The council has until June 1 to pass changes to the proposed budget. The mayor can then submit the equivalent of line-item vetoes or “objections” to any of the council’s changes. The changes can be overridden by a two-thirds majority vote by the council. A public hearing for the budget is also required to be held before May 15.