Towns 2008 Proposed Budget

TOWN OF TONAWANDA
2008 TENTATIVE BUDGET MESSAGE

Ronald H. Moline, Supervisor

As supervisor and chief fiscal and budget officer of the Town of Tonawanda, it is my responsibility under state law to obtain the 2008 departmental requests from the various department heads and to compile those requests into a tentative budget. The 2008 tentative budget has been filed with the town clerk’s office and will be distributed to members of the Town Board for their review.

The budget process began in June when I prepared and submitted to the department heads a set of 2008 tentative budget assumptions and guidelines to be followed when preparing their budget requests for 2008. These budget assumptions and guidelines basically requested the departments heads to submit their budget requests with no more than a 3% increase over their 2007 net operating budget exclusive of certain fixed appropriations over which they have no control, such as employee benefits, debt payments, interfund transfers and interdepartmental charges. The budget assumptions and guidelines also provided for the same level of full-time employees in all departments as their 2007 operating budget. These assumptions and guidelines were substantially complied with by the department heads when they submitted their departmental requests, and the tentative budget is based upon these requests with some minor changes made in subsequent meetings held with the supervisor and the town comptroller.

Although the 2008 tentative budget provides for a 3% increase in net operating appropriations for all departments, total spending is up by 3.9% for all funds and special districts when certain fixed appropriations such as employee benefits, debt payments, interfund transfers and interdepartmental charges are included. The budget totals $80,610,183 compared with $77,587,599 in the original 2007 budget, an increase of $3,022,584. The increase in the budget is due primarily to increased contributions to the liability and workers’ compensation self-insurance reserves, equipment purchases, hospital and medical insurance, negotiated wage increases for town employees, interdepartmental charges and the addition of certain senior recreational activities that must now be included in the budget.

The largest spending increase is for higher contributions to the liability and workers’ compensation self-insurance reserve funds. The proposed 2008 budget provides for $2 million to be transferred to these self-insurance reserves, an increase of 47%, or $642,000 over last year’s budget of $1,358,000. The 2008 tentative budget includes an additional $140,000 to purchase seven new police vehicles. Funds are also included in the budget to purchase one dump truck and one garbage packer for the Highway department. Additional equipment purchases to be made during 2008 from our various capital reserves include a paramedic vehicle and a signal platform truck with lift for the Police Department, another dump truck and front end loader for the Highway Department and two crew trucks for the Water Resources Department. The hospital and medical insurance costs for our employees and retirees will be increasing by $100,000. The proposed budget provides $8.6 million for this benefit, which represents over 10% of the total
budget. The budget was also increased by $347,000 for interdepartmental charges and by $277,000 for senior recreation activities as previously noted. Both of these amounts are offset by increases in estimated revenues.

Estimated non-property tax revenues for 2008 are $38,083,440, compared
with $36,907,388 for 2007, an increase of $1,176,052. The increase is due
primarily to increases in water and sewer rates based upon independent studies completed two years ago and a slight increase projected for sales tax revenues. There was also an increase in interdepartmental charges and senior recreation charges as noted in the above paragraphs.

The 2008 tentative budget includes $3,000,000 of appropriated fund balance,
which is the same amount as the 2007 budget. Fund balance will be used to
provide financial resources to help pay our bills and our employees for the first six weeks of 2008 until our real property taxes are collected in mid-February, so it is important to maintain this source of revenue. We expect that our fund balance will begin to grow at the end of the 2007 budget year.

Because the $3.0 million increase in spending is only partially offset by the
$1.2 million increase in estimated non-property tax revenues, it is necessary to increase the tax levy by 4.9%. The total tax levy for 2008 is $39,526,743
compared with $37,680,211 for 2007, an increase of $1,846,532.

The total town tax for all funds and special districts for the average homeowner living in a home assessed at $50,000 will be $1,114.95 compared with
$1,070.22 for 2007, an increase of $44.73 or 4.2%. This percentage is slightly less than the total tax levy increase of 4.9% because there was a slight increase in the assessed valuation on a townwide basis in the homestead and non-homestead tax categories and a slight change in the base proportions between the homestead and non-homestead tax categories. The small increase in assessed valuation is the result of new building activity, not the result of updating assessments on a townwide basis.

Under this proposed budget, the 2008 cost of town government per day for
the average homeowner living in a home assessed at $50,000 will be $3.05, up 12 cents from the $2.93 per day cost in 2007. This is 81 cents higher than the $2.24 per day cost in 1997, resulting in an average annual increase of 3.3% for each of the last eleven years.

The town budget is actually a total of nine different budgets: the General
Fund-Townwide, General Fund-Town Outside Village, Highway Fund-Town
Outside Village, Lighting Districts, Water Acquisition and Storage District, Fire
Protection Districts, Sewer Consolidated District, Drainage Consolidated District and Refuse and Garbage Consolidated District. The cost to taxpayers for each of these functions can be based upon assessed valuation, frontage, area, water and sewer usage or a combination of these factors.

I believe that this budget will provide department heads with the resources
they need to continue delivering the highest quality of services, programs and
facilities to our residents. The Town of Tonawanda has long been known as a
premier residential community by offering quality services that are unmatched and running government in an efficient manner. This budget should continue this tradition. The proposed 2008 town budget, with the cooperation of our department heads and employees, will maintain our reputation of providing the highest quality of service at the lowest possible cost as we continue to look for additional ways to become more efficient.

Two budget workshops will be scheduled for October for the Town Board to
review this document and to bring any new information that was not available
earlier. I am hopeful that their input will serve to strengthen the town’s fiscal
condition and tradition as one of the finest residential communities in Western
New York.