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HomeMy WebLinkAboutAgenda 02-13-2023 TOWN OF ITHACA BUDGET COMMITTEE Monday, February 13, 2023 - 12:00 p.m. Town Hall - Aurora Conference Room Join Zoom Meeting https://us06web.zoom.us/j/5063713554 AGENDA • Set 2023 Budget Committee meeting dates. • Discuss 2023 Budget Committee priorities. • Review and Discuss Town's Reserve Funds/Accounts as of December 31, 2022. - Parks, Recreation and Open Space Plan Reserve Account - General Benefit Reserve Account - Inlet Valley Cemetery Account - Land Preserve Maintenance Account - Land Stewardship Account - Highway Equipment Reserve Account - Risk Retention Fund - Sewer Fund - SJC Account • Update on 2022 Sales Tax and Mortgage Tax collections. • Update on 2022 Interest Revenue and Investments. • Review and Discuss Property Tax Exemptions (Capital, Infrastructure and Volunteer Firefighter/EMS). • Review and Discuss Projected Fund Balance for 2022. • Other Items Next Meeting: Monday, March 13, 2023 - 12:00 p.m. Town of Ithaca Budget Committee 2023 Meeting Schedule Budget Committee meetings are held monthly, scheduled for the second Monday of the month. Meetings will begin at 12:00 noon and will be held at Town Hall in the Aurora Room and/or via Zoom. January 9: No meeting. February 13: Set meeting schedule for 2023. Discuss Committee priorities for 2023. Review and discuss Town's Reserve Funds/Accounts. Report on 2022 Sales Tax & Mortgage Tax Collections. Report on 2022 Interest Earnings. Review 2022 balance of reserve funds. Review projected fund balance for 2022. March 13: Financial Report for the Year Ended December 31, 2022. Review Preliminary Five- Year Financial Projections for 2023 - 2027. Review Town’s Procurement Policy. April 10: Discuss possible 2023 BAN/Bond Issue (if needed). Review of Long-Term Debt and Debt Service schedules. Review 2022 Fund Balance. Continue discussion on Procurement Policy. May 8: Review draft Five-Year Capital Improvement Plan for 2023 – 2027 and update on current year projects. Review and discuss the Capital Budget Process. Discuss potential elimination of Lighting Districts. Continue discussion of 2022 Fund Balance and potential uses. Continue discussion on Procurement Policy (if needed). June 12: Discuss Property Tax Cap Override for FY-2023. Report on 2023 Sales Tax & Mortgage Tax Collections. Report on 2023 Interest Earnings. July 10: Review Five-Year Capital Improvement Plan for 2024 – 2028. Review 2023 Budget to Actuals. August 14: Discuss 2024 Water & Sewer Rates. Discuss 2024 Water & Sewer Benefit Fees. Initial review of Tentative 2024 Budget. September 11: Continue review of Tentative 2024 Budget. Thursday, OCTOBER 5 - 5:30 PM: Town Board Budget Meeting October 9: If Needed – no meeting scheduled. November: No Meeting December: No Meeting DRAFT Town of Ithaca Budget Committee 2023 Budget Committee Priorities - Review Reserve Funds and Accounts. - 2023/2024 Bond Issue - Review of the Town’s Long-Term Debt and Debt Service Schedules. - Consideration / Recommendation for the Town's contribution to:  Reconsider contribution to TCAT. - Review / Revision of the Town’s Investment Policy and Investing of Town Funds. - Review / Revision of the Town’s Procurement Policy. - Five-Year Financial Projections 2024 - 2028. - Property Tax Cap for FY-2024 and recommend 2024 Property Tax Levy. - Five-Year Capital Improvement Plan 2024 - 2028 and 2024 Capital Budget. - 2024 Ithaca Town Budget. - Prioritizing Town’s Weatherization Project. 1 TOWN OF ITHACA RESERVE FUNDS AND ACCOUNTS PARK, RECREATION AND OPEN SPACE PLAN RESERVE ACCOUNT - The Fund Balance of the General Townwide Fund includes funds designated for the purpose of future park development and the purchasing of development rights, as outlined in the Town’s Park, Recreation and Open Space Plan, as adopted on December 12, 1997. As of 1/01/22, the balance of this account was $724,763. During FY-2022 this account was increased by a $100,000 re-designation of fund balance and $137,250 from NYS-Parks for the 2018- 2019 Babcock property purchase. There was also $3,283 in interest income and an additional $5,047 in accrued interest from a certificate of deposit. No funding was allocated from this account in FY-2022. The balance of this account as of 12/31/22 was $970,343. This account is funded by the Town Board making an annual re-designation of a portion of the Fund Balance of the General Townwide Fund from unreserved to reserved. Additional income is received from interest earnings. An additional $100,000 in unreserved fund balance was designated as reserved for this purpose by the Town Board in January 2023. No maximum amount has been established for this reserve. It was recommended that the question of a maximum designated amount be revisited when the balance reaches $1,000,000. GENERAL BENEFIT RESERVE ACCOUNT - The fund balances in the General Townwide Fund, General Part- Town Fund, Highway Part-Town Fund, Water Fund, and Sewer Fund includes reserves established for managing unanticipated increases in employee fringe benefit costs (e.g. NYS Employee Retirement System, Health Insurance). The aggregate balance of this reserve as of 12/31/22 was $350,000 plus $3,532.87 in accrued interest on a CD maturing in July 2023. The balance by fund is as follows: Certificates Accrued Balance as of Deposit Interest of 12/31/2022 General Townwide Fund 154,000$ 1,554$ 155,554$ General Part-Town Fund 77,000 777 77,777 Highway Part-Town Fund 80,500 813 81,313 Water Fund 21,000 212 21,212 Sewer Fund 17,500 177 17,677 Total as of 12/31/2022 350,000$ 3,533$ 353,533$ General Benefit Reserve In 2015 the Town Board established the maximum of this reserve be set at $350,000. Balance in excess of the limit at year-end to be returned to the unreserved fund equity of the host funds. INLET VALLEY CEMETERY ACCOUNT - In 2017 the Inlet Valley Cemetery Fund was closed and the remaining assets transferred to the General Townwide Fund, to be used in maintaining the Inlet Valley Cemetery. For the year ended 12/31/22, the balance of this account totaled $4,505, plus $45.43 in accrued interest from a certificate of deposit. Future income for this reserve will be limited to interest earnings. No maximum amount was established for this account. PRESERVE MAINTENANCE ACCOUNT - The Fund Balance of the General Townwide Fund also includes funds designated for the maintenance of the Pine Tree Wildlife Preserve, donated to the Town by a local family in 2013. In conjunction with the donation of the land, the amount of $40,000 was also donated to provide for future maintenance of the preserve. As of 1/01/22, the balance of this account was $41,652. During FY-2022 this account was increased by $101 in interest income and $421 in accrued certificate of deposit interest. There were no expenditures from this account during FY-2022. As of 12/31/22 the balance of this account totaled $42,174. Future income will be limited to interest earnings. As this account is expected to decrease over time, no maximum amount was established. 2 LAND STEWARDSHIP ACCOUNT - In 2014 the Town purchased the development rights to the Indian Creek Farm with financial assistance through a State of New York grant. This grant included $10,000 to be held by the Town, designated for the future stewardship of the Indian Creek Farm lands. As of 1/01/22, the balance of this account was $10,095. Revenue for FY-2022 totaled $13 in interest income and $101 in accrued certificate of deposit interest. For the year ended 12/31/22, the balance of this account totaled $10,209. Future income for this reserve will be limited to interest earnings. As this account is also expected to decrease over time, no maximum amount was established. HIGHWAY EQUIPMENT RESERVE ACCOUNT - The Fund Balance of the Highway Part-Town Fund includes funds designated for the purchase/replacement of highway equipment and machinery. The balance in this account as of 1/01/22 was $399,477. Revenue for FY-2022 totaled $935 in interest income and $4,032 in accrued certificate of deposit interest. Balance of this account as of 12/31/22 was $404,445 with $4,445 moved to Highway Part-Town Fund balance to keep the reserve balance at $400,000. This account is funded by sale of surplus machinery and equipment, with additional income from interest earnings. In 2015 the Town Board established the maximum of this account be set at $250,000. In 2018 the Town Board increased the maximum to $400,000. Balance in excess of the limit at year-end to be returned to the unreserved fund equity of the Highway Part-Town Fund. RISK RETENTION FUND - This fund is used to account for expenditures for 1) direct employee health and wellness expenditures, including training, work-related emergency room and clinic health care visits, and 2) repairs to equipment and facilities not covered by insurance, or until reimbursement from insurance is received. Income for this fund is derived from annual budgeted inter-fund transfers, plus insurance recoveries and interest income. Fund balance as of 12/31/22 was $149,978. The Town Board has established the maximum fund balance of the Risk Retention Fund be set at $150,000. Balance in excess of the limit at year-end to be returned to the unreserved fund equity of the contributing Funds. SJC ACCOUNT IN SEWER FUND - The Fund Balance of the Sewer Fund includes funds designated for SJC purposes. In 2015 these purposes were defined by the Town Board as 1) to pay for expenditures related to the improvement of jointly-owned sewer interceptor lines, and 2) to pay the Town’s share of the City of Ithaca’s bonded debt issued to pay for Ithaca Area Wastewater Treatment Facility (IAWWTF) improvements. The balance in this account as of 1/1/22 totaled $1,559,693. Revenue for FY-2022 totaled $21,089 in interest income, resulting in a 12/31/22 balance totaling $1,315,056. 1) Jointly-owned Sewer Interceptor Lines: Interceptor sewers convey sewage from the Town through the City of Ithaca for treatment at the IAWWTF. These interceptor sewers are jointly owned with the City, and the Town is responsible for a portion of the maintenance and replacement costs of these lines. The Town of Ithaca and the City of Ithaca must initially approve all capital projects and related expenditures before any construction can take place. With the replacement of the State Street Interceptor completed in 2018, the last of five projects originally agreed to between the Town and City, $63,228 of the SJC account balance remained for this purpose. The 2022 Budget includes $86,205 for the Stewart Park Pump Station Rehabilitation which will utilize the balance of this fund. 2) IAWWTF Bonded Debt: In 2015, the Town Board determined it would be prudent for the Town to designate funds to pay part of this debt in the event of future economic hardships. As of 12/31/22, the amount available in the SJC account for this purpose was $496,465. 3) Capital Projects: In 2022, the Budget Committee discussed designating $1,000,000 for Sewer Capital Projects. In 2022 the Town contributed $265,720 for the Boiler Replacement Project at IAWWTF and credited the $21,089 in interest income, leaving a balance of 755,363 on 12/31/2022. General Highway Part-Town Part-Town TOTAL Liability Month B1120 DB1120 Month Collected 1,618,000.00$ 1,632,000.00$ 3,250,000.00$ 0.4978 0.5022 1.0000 January April 174,047.04$ 175,553.00$ 349,600.04$ February April 149,584.22 150,878.52 300,462.74 March April 197,517.17 199,226.22 396,743.39 April June 174,664.44 176,175.76 350,840.20 May June 182,274.67 183,851.83 366,126.50 June August 164,462.76 165,885.80 330,348.56 July August 191,593.39 193,251.18 384,844.57 August November 178,515.29 180,059.93 358,575.22 September November 228,503.86 230,481.02 458,984.88 October December - 350,174.18 350,174.18 November January - - - December January - TOTAL COLLECTIONS:1,641,162.84$ 2,005,537.44$ 3,646,700.28$ TOTAL - 2022 BUDGET:1,618,000.00$ 1,632,000.00$ 3,250,000.00$ % of 2022 Budget Collected:101.4%122.9%112.2% COMPARISON PERIOD 2019 2020 2021 2022 TO PRIOR YEAR January 269,396.32$ 266,756.00$ 241,976.77$ 349,600.04$ 144.48% February 225,039.78 241,529.18 220,287.15 300,462.74 136.40% March 310,009.67 294,969.05 392,202.28 396,743.39 101.16% 1st Quarter 804,445.77$ 803,254.23$ 854,466.20$ 1,046,806.17$ 122.51% April 256,261.09$ 193,919.94$ 281,825.36$ 350,840.20 124.49% May 268,201.64 181,781.59 284,332.00 366,126.50 128.77% June 418,808.26 279,411.53 431,611.13 330,348.56 76.54% 2nd Quarter 943,270.99$ 655,113.06$ 997,768.49$ 1,047,315.26$ 104.97% First 6 Months 1,747,716.76$ 1,458,367.29$ 1,852,234.69$ 2,094,121.43$ 113.06% July 295,250.32$ 254,742.19$ 314,638.93$ 384,844.57 122.31% August 287,577.63 248,307.40 312,514.79 358,575.22 114.74% September 335,180.68 437,518.95 472,220.61 458,984.88 97.20% 3rd Quarter 918,008.63$ 940,568.54$ 1,099,374.33$ 1,202,404.67$ 109.37% First 9 Months 2,665,725.39$ 2,398,935.83$ 2,951,609.02$ 3,296,526.10$ 111.69% October 273,032.77$ 269,331.84$ 292,143.63$ 350,174.18 119.86% November 303,027.78 231,274.86 302,394.38 - 0.00% December 355,376.48 381,304.49 436,657.63 - 0.00% 4th Quarter 931,437.03$ 881,911.19$ 1,031,195.64$ 350,174.18 ANNUAL TOTAL 3,597,162.42$ 3,280,847.02$ 3,982,804.66$ 3,646,700.28 91.56% COMPARISON PERIOD 2019 2020 2021 2022 TO PRIOR YEAR April/May 202,754.85$ 100,391.42$ 158,060.48$ 134,965.47$ 85.39% October/November 198,192.03 196,709.44 224,517.51 269,365.59 119.98% ANNUAL TOTAL 400,946.88$ 297,100.86$ 382,577.99$ 404,331.06$ 105.69% TOWN OF ITHACA SALES TAX COLLECTIONS For the Year Ending December 31, 2022 2019 - 2022 COMPARISON OF SALES TAX COLLECTIONS Mortgage Tax Collections FUNDS JANUARY FEBRUARY MARCH APRIL MAY JUNE JULY AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER TOTAL General Fund 513.42$ 606.45$ 682.03$ 3,095.80$ 635.88$ 1,222.82$ 9,415.76$ 9,819.72$ 10,459.48$ 16,688.53$ 12,083.61$ 23,410.15$ 88,633.65$ Open Space Plan Reserve 69.70 61.06 67.63 57.51 67.54 175.47 206.04 370.02 455.30 2,394.08 559.54 4,822.68 9,306.57 Land Preserve Maint. Reserve 0.04 0.04 0.04 48.61 0.03 0.11 51.51 156.56 264.86 521.80 Land Stewardship Reserve 0.02 0.01 0.02 0.04 12.49 0.12 0.15 37.67 0.18 63.67 114.37 Inlet Valley Cemetery 0.43 0.38 0.42 12.06 0.42 1.09 0.51 0.01 16.88 0.01 28.56 60.77 General Part-Town Fund 115.18 89.08 90.66 758.00 120.13 641.19 2,129.17 2,197.72 3,117.44 5,950.79 4,230.10 9,613.17 29,052.63 Highway Fund - DA 84.13 97.56 97.60 429.86 82.01 210.96 826.59 649.91 746.07 2,394.43 577.93 3,795.15 9,992.20 Highway Part-Town Fund - DB 185.34 194.82 207.62 2,038.23 231.01 1,186.68 4,391.59 3,204.36 3,651.97 9,672.44 2,714.29 13,231.27 40,909.62 Highway Equipment Reserve 2.45 2.15 2.38 442.83 2.38 6.18 470.40 0.95 1.17 1,499.37 1.43 2,536.04 4,967.73 Water Fund 216.37 260.68 274.25 1,469.34 282.20 633.54 2,927.29 2,785.26 2,372.46 5,709.01 2,666.40 8,684.52 28,281.32 Sewer Fund 135.46 114.61 120.11 136.82 125.47 364.33 970.46 1,314.03 1,277.53 4,029.80 2,799.38 6,296.18 17,684.18 Sewer - SJC Account 53.57 46.94 51.98 1,226.02 51.92 134.88 1,880.59 1,559.17 1,961.55 4,422.46 2,983.05 6,711.26 21,083.39 Risk Retention Fund 5.21 4.18 4.36 121.82 4.25 10.98 142.99 26.65 13.79 566.49 3.29 948.22 1,852.23 Fire Protection Fund 230.24 408.94 451.61 1,066.84 353.93 730.42 3,133.61 2,909.65 3,047.38 4,947.78 2,643.84 6,924.42 26,848.66 Debt Service Fund 5.19 3.75 3.16 430.27 19.81 50.52 568.88 169.12 155.26 1,491.76 102.20 2,349.53 5,349.45 Light District Funds 4.52 4.47 3.94 3.24 3.73 9.49 25.48 38.77 47.20 53.30 56.07 69.41 319.62 General Benefit Reserve - Receiver of Taxes - TOTAL - Operating Accounts 1,621.27$ 1,895.12$ 2,057.81$ 11,337.25$ 1,980.71$ 5,378.70$ 27,153.36$ 25,045.45$ 27,306.76$ 60,031.35$ 31,421.32$ 89,749.09$ 284,978.19$ Investment Balance Interest Rate Maturity Savings 1,008,732$ 3.00%n/a CD - 12 Mos.8,106,418 3.85%7/4/2023 CD - 12 Mos.5,019,530 4.50%12/27/2023 CD - 24 Mos.53,839 0.35%10/25/2023 NYCLASS 27,122,981 4.35%n/a Investments as of 2/9/2023 TOWN OF ITHACA - INTEREST INCOME FOR FY-2022 Real Property Tax Law Section 421-f: Capital Improvements One- and two-family residential buildings that are reconstructed, altered, or improved under certain conditions are exempt from taxation and special ad valorem levies to the extent of an annually declining percentage of at least some of the increase in the property’s assessed value attributable to the reconstruction, alteration, or improvement. No exemption is allowed for special assessments. Local taxing jurisdictions may limit the types of construction projects eligible for exemption and the percentages of exemption. • The extent of the exemption is determined by the exemption base and the percentage of that base allowed as exempt each year. The exemption base is defined as the increase in assessed value as determined in the initial year of the term of exemption . • Property must be used as a residential building for not more than two families. • The value of the construction project must exceed $3,000 and must be of the type allowed exemption by the taxing jurisdiction (see below); the project may not be one of ordinary maintenance or repairs. • The greater portion of the building, as measured by the square footage, of the building reconstructed, altered or improved, must be at least five years old. Local Options: 1. The governing board must pass a local law or ordinance to adopt the exemption after a public hearing. 2. Any taxing jurisdiction may reduce the percentage of exemption allowed in each year by state law (see table above). 3. State law limits the exemption to a maximum of $80,000 in increased market value. Local taxing jurisdictions may reduce this maximum to any amount not less than $5,000. 4. A taxing jurisdiction may limit the forms of reconstruction, alteration, or improvement eligible. The County also included a provision that the exemption must be applied for within 1 year of completion of the project. Year of exemption 1 2 3 4 5 6 7 8 62.5 50 37.5 25 12.5 Percentage of exemption base 100 87.5 75 Real Property Tax Law Section 485-g: Residential Subdivision Infrastructure Residential building lots which are part of a subdivision for residential development which includes infrastructure intended to be dedicated to a municipality are exempt from taxation to the extent of the increased assessed value of such lots resulting from the addition of such infrastructure but are liable for special ad valorem levies and special assessments. The duration of the exemption extends from the time the exemption is granted until the issuance of a certificate of occupancy, but in no event longer than three years following the granting of the exemption. • Property must be owned by a private individual or organization. • Property must be located on residential building lots which are part of a subdivision plat for residential development which includes infrastructure intended to be dedicated to the municipality. • The owner of the subdivision must file a subdivision plat which shows the facilities which comprise the infrastructure eligible for this exemption – i.e. streets, storm and sanitary sewers, drainage facilities and any other facilities required by the municipality. Local Options: 1. The governing board must pass a local law or ordinance to adopt the exemption after a public hearing.