Taxes and Fees
Lancaster approves 2011 budget, Part II: Resident input
By Lee Chowaniec
Nov 17, 2010, 11:20
Prior to Town Board resolution consideration the public is given a half hour of time, 5 minutes each, to comment on the proposed resolutions. Several spoke on the 2011 proposed final budget. Although they agreed that the $556,777 cut in the preliminary was a good thing, they requested the board table the resolution and seek further cuts that would reduce the overall budget spending.
Depew resident Dan Beutler opened his comments by affirming that the $556,777 budget reduction was a step in the right direction. “As a resident of Depew, I will not be paying as much in taxes as some people outside the villages. But I am a public employee and work for ECMC and have not had a raise since 2005. However, my taxes have gone up. I didn’t get that 2.75% salary increase like the town employees and white collar employees and the town elected and appointed officials will receive.”
Beutler then made mention of the attorney fees paid to Jeff Swiatek FOR negotiation union contracts, contracts in his opinion that favored his interests, the towns, and not so much the taxpayers.
Police will again receive a 3% wage increase as they have for years. “We taxpayers are paying the bill and as someone who will retiring next year I would hope the board does better in future contract negotiations.
Resident Lee Chowaniec then addressed the board and commented on the budget.
Mr. Giza stated at the work session that the budget was cut by over $500,000. That would have been true had $130,000 not been removed from the budget and appropriated back into the fund balance. I see the reduction as $426,777.
Where some see the $426,777 cut in the Ad Volorem preliminary budget that had an 8.94% spending increase in the town fund portion as a significant decrease, I see a final budget proposal that still increases spending by 6.33%, $1.35 million.
This budget proposal remains fiscally irresponsible, especially considering the possibility of a future tax cap, and especially considering what cuts were made and to what fund. It is made more onerous by the cut back in reserve use, by $130,000.
For those that take comfort that the $426,777 adjustment reduces taxes for everyone because the 2011 tax rate of 8.11 is lower than the 8.19 tax rate of 2010, think again. After reval, and especially like the one that took place in Lancaster where total property valuation increased by $300 million, the tax rate always falls below the previous year’s. In 2005 there was a reval. The 2006 all Town Funds portion of the budget increased by 6.90%. It is my opinion the budget needs further cutting.
This Ad Volorem budget proposal still increase spending at a 6.33% rate and is a slap in the face to all taxpayers that are paying the highest taxes in the nation and where many of them are struggling to make ends meet. It is a slap in the face to those who don’t make the salaries, who don’t receive free health care and do not have the retirement programs town employees have but have the obligation to pay for them.
I would encourage this board to review the proposal and make more cuts. to table this resolution this evening.
In the work session, I asked whether fund balances could be transferred from one fund to another; whether you could transfer money from the police fund to the highway. I was told no that that process is illegal.
In last year’s budget, spending increased by only 2.1%, yet we used $1.6 million of fund balance reserves. This year in the preliminary Ad Volorem budget spending increased by 8.94%, has since been decreased to 6.33% and we are only using $978,735 in fund balance reserves.Why are we using less in reserves at a time when we are spending more?
Supervisor Giza responded that the town tries to recoup the reserves that are used with the anticipation that revenues and expenditures will allow that to happen.”When I took office reserves were not only not there but was in the arrears by about $75,000.It is healthy to have a decent reserve in case emergencies arise. And, it does get a little interest that does provide revenue. We are in a comfortable position considering the size of our budget. I don’t think we have anything out of the ordinary in reserves.”
Chowaniec interjected that the reserves last year were at $4.2 last year and that $1.6 were used to help offset a budget spending increase of only $1.8%. Yet this year we have $4.02 million in reserves, are increasing spending by three times as much as last year and not even using $1 million in reserves. There should be some wiggle room in some of those funds to further reduce the budget. The money in the fund balance is taxpayer money and should be spent to lower taxes for people who no longer can afford to pay more in taxes and to lower taxes for those who can pay more but should not have to. I still believe a 6.33% spending increase in the budget is onerous.
Resident Mike Fronczak commented that he too was pleased with the half million cut in spending, but requested the board take their magic pencils and find some other money.”I also believe this issue should be tabled. It is mind boggling to me that a half million dollars could be found in a matter of two weeks. That indicates to me that there is still some room to make further cuts. The taxpayers of the town are owed the town’s consideration that we have gone to extremes to keep the taxes down for the people who did not get raises.”
Fronczak addressed Supervisor Giza personally and commented that it continues to be a big issue of his that the Supervisor still receives a health care stipend ($6,000) for not taking town provided health insurance.”Is that health care stipend still in the budget?”
Giza answered that it was.
“Are you ever going to consider not taking that stipend since you have outside insurance provided you,” asked Fronczak? “Are you going to do this as a symbol for others to follow?”
Giza replied that he could take the health insurance provided by the town but that he was informed it would cost the town more money.
“So despite your getting free health care (Lancaster Boys Club) you are still going to take the stipend, asked Fronczak?
“I work hard for my money,” replied Giza. There are people that have more money in town than me and I never say anything about it. I am happy where I am. So I am not going to defend myself to you or anyone because I earn every penny I get.”
At this time Supervisor Giza announced that the half hour segment of the public comment session on the prefiled resolutions had ended.
Councilperson addresses board
Council Member Donna Stempniak requested to speak. She declared that she had questions for Mr. Chowaniec. “When you quoted $4 million in reserves, are you adding all reserves?”
Chowaniec: “Yes, excepting debt service reserves.”
Stempniak: “But you are adding the recreation fees, the police fund, the highway fund, the fire, the lighting?”
Stempniak: “But that gives an incorrect picture, an estimation that says we are sitting on something that we can use for anything we want; and we can’t. There are some funds that don’t have a generous fund balance so we wouldn’t be able to use that to offset some taxes. Funds for lighting mean exactly that, funds for lighting, fire for just fire protection. Some fund balances may be larger but when you say we have $4 million dollars it sounds like we are sitting on this huge bank account but it’s not really true.”
Chowaniec: “When I was looking at fund balances, I was looking at apples to apples, from one year to the next using same accounts”
Stempniak: “But you lumped them (fund balances) all together. If you are looking at apples to apples, when you speak to the board and the public it behooves you to do it in the correct manner.
Chowaniec: “I am saying there is money in some funds that can be appropriated to reduce the budget further. The police fund budget was reduced by only $21,530 (from the preliminary budget proposal). $280,000 of a police fund balance that has $845,146 is being used; 33%. That leaves $565,146 in fund balance reserves. I believe there is more money in some funds that could be used in this budget to reduce the tax levy and tax rate. I understand your position on maintaining healthy reserves for the future, at the same time taxpayers need consideration as well.”
Stempniak: “But when you compare things, make sure it’s apples to apples.”
Comment: Ms. Stempniak was correct. I did not understand where she was coming from at that time. I have been made to understand that fund balances cannot be transferred and that certain fund balances are self sustaining and not part of the tax levy – like the Miscellaneous Revenue Funds; Recreation Fee, Tree Planting, Memorial Garden and Police Asset Fort.
I have come to learn that the Town’s rule of thumb is to use not more than one-third of each fund balance asset to lower the tax levy. I have learned many things over the past few days, but I am still of the opinion that more reserves could have been used to offset a budget that increases spending by more than threefold from last year and where less fund balance reserves were used this year- $1.67 million in 2010 and $1.06 million in 2011, a $601,000 difference.
As to the general rule of using only one-third of fund balance, last year (2010) the following were the unreserved fund balances and the amounts appropriated into the budget:
General Fund –Townwide: $1,022,470 in fund balance reserves and $500,000 was appropriated into the budget; 48.9%
General Fund- Town Outside of Villages: $351,746 in reserves and $200,000 was appropriated into the budget; 56.9%
Police Fund: $1,160,311 in fund balance reserve and $525,000 was appropriated into the fund balance; 45.3%
Highway Fund – Townwide: $172,707 in fund balance reserve and only $50,000 appropriated into the budget; 28.9%.
Highway Fund – Town Outside Villages: $586,232 in fund balance reserves and $250,000 appropriated into the budget; 42.6% used to offset a decrease in spending spending fund (-1.12%).
Why was so much fund balance used to decrease the tax levy and tax rate last year when spending was nowhere near this year’s level? I would hate to think as others do that it was political – election year. Some voice that next year three board seats will be up for election and that this is a political move to tax now and come in with a responsible budget before next year’s election.
Lastly, I wish to acknowledge my error in saying the budget cut was only $426,777. It was cut by $556,777. I failed to understand the formula used in the Recreation Fee Filling portion and did not do the simple math that I always speak of.
Two other residents wanted to speak but were told the half hour time limit had expired and that we had to move on. They presented their comments at the public comment session at the end of the meeting and will be published in Part III.
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