HomeMy WebLinkAbout2019 budget-narrative 1 10/29/18
TOWN OF ULYSSES 2019 Budget Process and Narrative
BUDGET PROCESS September through October is budget time and the Town Board of Ulysses has worked many hours to assess and determine the most responsible way to budget funds for the upcoming year. The Town Board is very aware of the terrific burden property tax has become. Increasing expenses, compounded with cuts in state aid, make for difficult budgeting decisions at the local level. Expenses can be unpredictable, as can sources of revenues, so the town’s aim is to carefully budget to cover necessary services while keeping property tax rates as stable and affordable as possible. Within the Town of Ulysses is an entirely separate government--the Village of Trumansburg--which adds another level of complication to the budgeting process since NYS determines that certain costs will be borne by all of the town, including the village (A and DA funds), and others are paid for by only those living in the town outside the village (B and DB funds). See Table 9 for a visual explanation of the various funds, and the glossary for a description of terms. Budgeting is an inexact science, based on estimates from the current and past years. The tentative budget prepared by the Town Supervisor is reviewed by the Town Board. They weigh the importance of the services against the potential for a tax increase, to create a responsible spending plan. Once all the requests for funding and potential revenues are entered into the budget, the levy is calculated. The tax levy is the difference between other revenues (income primarily from sales tax and fees), and appropriations (expenses). This monetary gap is filled by taxing property owners. The rate at which property owners are taxed is determined by dividing the tax levy by the total assessed value (TAV) of the town’s property. The tax levy is what NYS requires towns to cap (unless overridden) and for 2019 the Town is allowed a maximum of a 2.92% increase. Tax Rate = (Tax Levy ÷ TAV) x 1,000 Towns can budget closely to their expected needs but there are unexpected events that occur, such as above average snowfalls, flooding damage, unexpected equipment maintenance, lawsuits, etc . In addition, towns cannot always foresee how much revenue will come from sales tax, or mortgage taxes (based on real estate sales). Further complicating the equation is not knowing when revenues will be available. When the snow is falling in December at the end of its fiscal year, a town needs enough in its bank account to cover the costs of keeping the roads clear. With this in mind, towns are expected to maintain a balance in their accounts to assure they can pay those bills, no matter the time of the year. These working funds are called unappropriated and unassigned fund balances (uFB) and they act the same way a personal checking account balance keeps checks from bouncing.
2019 TAX RATES
Taxing entities Tax Rate Annual Tax $/$187,000 house
General (A and DA) –
Villagers pay this rate
=$1.209463/1000 $226.17 (a $22.20 decrease over 2018)
EMS/Fire for Ulysses
residents*
= $1.481793/1000 $277.10 (a $41.12 increase over 2018)
Total for Ulysses residents
outside the Village
= $2.69126/1000 $503.27 (a $18.92 increase over 2018) * “A” funds are paid for by both town and village residents and are general operating expenses. Village residents pay for fire and EMS on their Village tax bill, not their town tax bill.
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Tables 1. shows the change in the tax levies (total amount of funds raised by property tax) and
tax rates for the General (A) and Highway (DA) paid by Village and Town residents funds from 2018 to 2019. The TAV increased from 2018 to 2019 by $3,779,442. The tax rate increased by 3.91%,
Table 1. Levy and Tax Rates – General Funds (A, DA)
General fund (A
and DA)
Year Levy
Tax Rate/
$1,000
2018 $671,663 $1.3282
2019 $616,234 $1.2095
Levy change (no water districts) -8.25% -8.94%
TAV = $509,150,586 Village and town residents both pay the General Town-wide taxes (A and DA), but only residents outside the village pay the town’s share of fire and EMS taxes. Village residents pay for fire and EMS separately on their village tax bill. The Village of Trumansburg manages both the fire and emergency medical services (EMS) and Ulysses contracts with the village for these services. Fire costs are paid for entirely from property taxes—there are no other revenue sources. EMS costs are paid with a combination of property taxes and income from billing for ambulance transportation. Revenues from billing for ambulance service do not cover costs. EMS and fire costs account for over half of the total town taxes paid by residents outside the village. Tax rates for fire and Emergency Medical Services (EMS) for town residents outside the village are calculated using the TAV of the town minus the TAV of the Village.
Table 2 shows the 2019 levy and tax changes for fire and EMS, which account for 48% of the total town levy (see Table 6).
Table 2. Levy and Tax Rates – Fire and EMS
Fire/EMS Year Levy
Tax Rate/
$1,000
2018 $482,790 $1.2619
2019 $569,676 $1.4818
% Change +18.00 % +17.43%
TAV = $384,450,687 (excludes the village TAV). The overall 2019 tax rate for residents living outside the village is $2.69126/$1,000 of property value, a 3.91% increase over 2018. Village residents will pay $1.20946/$1,000, a decrease of 8.94%
Table 3. Tax Rates
2019 TAX RATES 2019 2018 % Change
General Town-wide (A & DA) $1.2095 $1.3282 -8.94%
Fire & EMS $1.4818 $1.2619 17.43%
Total Town Tax Rate $2.6913 $2.5901 3.91%
FIRE & EMS
Tax rate = tax levy ÷ total assessed value (TAV for the town excluding the village) x $1,000
Tax rate = $569,676 (Levy for Fire/EMS) ÷ $384,450,687 (TAV without Trumansburg) x $1,000 =
$1.4818
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Water districts are separate taxing entities and only those who live in the water district pay for the expenses.
Table 4. Levy and Tax Rates – Water District 3 (Jacksonville)
Water District 3 Year Levy Tax/Unit
2018 $223,752 $592.56
2019 $218,676 $605.58
% Change -2.27% 2.20% Oddly, the state chose to cap the tax levy, not the tax rate which is what property owners actually pay. The cap takes into account the aggregate of all levies, even the water districts. Table 5 shows the overall tax rate increase for the town of 3.91%-but the tax rate is not the part that is capped, the tax levy is, and it is up 1.91%. The state allowed cap on the increase in tax levy for the town in 2019 is 2.92%. Table 5. Levy and Tax Rates - overall
All Levies (general,
highway, fire/EMS,
water)
Year Levy Tax Rate
2018 1,379,284 2.59009
2019 1,405,673 2.69126
Levy increase 1.91% 3.91%
Table 6 shows the percentage of the levy that goes to paying for each fund.
Table 6. Percent of Levy used for Funds
Fund Levy $ % of Levy
General 376,054 32%
Highway 240,180 20%
EMS/Fire 569,676 48%
Total levy (no water) 1,185,910 100% County and town taxes are printed on the same bill and mailed near the end of December each year. Assume a median value of a house in Ulysses is estimated to be $187,000. For the purposes of comparison, Table 7 shows the taxes for the median home in 2019, which translates into a tax bill of $503.27/year or an increase of $18.92 over 2018 for residents outside the village and a decrease of $22.20 for village residents. There are no state rebates this year for remaining under the tax levy cap.
Table 7. Tax Bill Amount for $187,000 House
Taxes due for a Ulysses resident outside Trumansburg $503.27 $18.92
Taxes due for a Trumansburg resident $226.17 $22.20 The town has a variety of revenues as shown in Table 8. Besides sales and property taxes, other revenue sources include NYS aid, license fees, grants, penalties and mortgage taxes (from housing sales).
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Table 8. Revenue Sources and Percent of Budget excluding Water Districts
Percentage of revenues from:
total funding needed $3,068,857 100%
Sales tax $600,000 20%
Property tax $1,185,910 39%
Available Fund Balance $448,000 14%
State support $121,545 4%
Reserves $188,281 6%
Other revenues (grants,
fees, etc) $525,121 17%
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Specific items to note in the budget:
“A” funds are paid for by both village and town residents. “B” funds are assessed to town residents only
and generally cover zoning, planning and building code enforcement as well as major highway repair. No
property taxes are used as revenues in the B or DB funds.
All funds:
• Health insurance is estimated to increase by 5%
• Unallocated fund balances have been lower than is desirable for the last 3 years, but the target
amount of 20% was used this year.
• For the first time in years, the town has added to dwindling reserves.
• Sales tax is up for 2018.
• The taxable assessed value (TAV) of the town only increased 0.7%--the lowest amount since
2015. Historically the TAV has increased at around 3% annually.
A Fund:
• A1170: The franchise fees from the cable companies has decreased over recent years.
• A1620: A grant from the state will cover the costs to install heat pumps in the town hall.
• A5132: Better lighting will be installed in the town barn.
• The following reserves were added to for the first time in many years: Retirement, Employee
Benefits, Tax Stabilization, Legal, Audit, Purchase of Environmental Protections.
Highway (DA and DB):
• DA5130: A new plow truck and loader are being purchased in 2019. Funding from reserves will
be required to make these purchases.
• Reserve funds were added for Snow and Ice Removal and Capital Reserves for road repair and
maintenance.
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2019 Budget Narrative
Glossary of terms and fund definitions
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Glossary of terms (in order of first appearance in budget narrative)
Tax levy: the amount of money needed to cover the town’s expenses through property tax. This figure is calculated by taking the total dollar amount of expenses and subtracting the dollar amount brought in by sales tax and other sources of revenue
Tax rate ($/$1000 of property value): this figure is calculated by taking the tax levy dollar amount and dividing it by the total assessed value (TAV) of the properties in the Town of Ulysses.
Total assessed value (TAV): The total of all the assessed values of the properties in Ulysses.
Revenue: revenue for the town is sales tax, property tax, mortgage tax, licensing fees, court fees, fund balances left unspent from the previous year, state aid and a few other minor sources.
Appropriation or Expense: costs associated with running the town. Examples include: highway equipment, staff salaries and benefits, facilities and other capital costs, street lights and other utilities, and cultural expenses.
Unassigned fund balances (uFB): the balance maintained in the town’s bank accounts in order to effectively manage cash flow in cases of emergency or unexpected expenses. The town targets 20% of projected appropriations to be kept in uFB.
Water district: there are four water districts in the Town of Ulysses; this does not include Village water. Residents who are in a water district pay for the costs associated with the water district; no water costs are paid for by residents who do not live in a water district.
Tax cap: In June of 2014 Governor Cuomo passed a law limiting tax levy according to a calculation made by the state. This tax cap applies to both school districts and local governments. The tax cap can be overridden with a 60% vote of the local municipality governing body.
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Table 9. Fund Descriptions, Percent of Budget and Who Pays
Fund Fund expenses* Who pays for it through the
tax levy
% of overall
appropriations A (i.e. the “General” fund) Town Hall and Town Court staff salaries, Highway superintendent salary, benefits for staff who qualify, facilities costs, Town Hall utilities, communication and mailing costs, youth programming, attorney costs, environmental research
Town and village residents 29%
B Building code officer salary, Zoning/Planning officer salary, benefits as applicable, flood and erosion control administrative costs
Funded primarily by sales tax. No property tax is used. 7%
DA Machinery costs, bridge maintenance, brush and weed control, snow removal, highway staff salaries and benefits
Town and village residents 24%
DB Highway maintenance, highway staff salaries and benefits Funded primarily by sales tax. No property tax is used. 11% Water Water purchases, administrative costs, infrastructure and maintenance costs Those in the water district 10% Fire/EMS Fire and EMS services Town residents 19% Other Lighting and Sidewalks varies <1% *see the 2018 budget for the complete list Questions? Contact Town Supervisor, Liz Thomas. supervisor@ulysses.ny.us 387-5767 ext. 232