HomeMy WebLinkAboutMeeting Notes 4-22-2015
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BUDGET COMMITTEE
Meeting Notes - April 22, 2015
Committee present: Eric Levine - Chairman, Herb Engman, Pat Leary
Staff present: Mike Solvig, Judy Drake
Others present: Bill Goodman
Meeting was called to order at: 12:00 p.m.
AGENDA ITEMS:
• Review and approve meeting notes from March 4, 2015.
Committee members reviewed and approved the meeting notes from March 4, 2015.
• Discuss increasing Town contribution to the Pine Tree Road Walkway Project.
Mr. Engman informed the Committee that an agreement for the additional funding needed for the
Pine Tree Road Walkway project has been reached between the County, Cornell University and
the Town. Under this new agreement, the Town’s share of the project would increase from
$35,000 to $70,000.
$35,000 was set aside in a capital project fund for this purpose in 2011. As of March 31, 2015, the
account balance was $35,096.31. Assuming it will be at least a year before the Town will be
paying for this project, an additional amount of $34,860 would need to be transferred to the
capital project fund. The increased funding will come from the fund balance of the General Fund.
• Review Long-Term Debt and Debt Service Projections.
The Committee reviewed the Long-Term Debt and Debt Service Projection schedules for Fiscal
Years 2016 through 2027. Future fiscal year debt projections include those capital projects
identified in the Town’s Capital Improvement Plan (up to and including Fiscal Year 2020) to be
financed by issuing new long-term debt, with the amount of the debt to be issued equal to the
current estimated cost of the project. Interest rates, which have remained historically low over
the past four years, have been projected to increase slowly over the next five years. Average
interest rates for the Town’s 2011, 2013 and 2014 bond issues have all been slightly less than 3%.
Total outstanding long-term debt increases from $11,789,000 at year-end in 2014 to $15,819,000
at year-end in 2020. Of this total, $1,174,000 is for facilities improvements, $3,826,000 is for
highway improvements, and the remaining $10,819,000 for water infrastructure improvements.
This is an increase of $4,030,000, or 34.2%, over the period from 2014 to 2020.
• Review Five-Year Budget Projections.
The current Five-Year Financial Projections for Fiscal Years 2016 - 2020 continue to be generally
positive. Conditions that contributed to this improvement included:
- The Town’s financial condition at year-end in 2014 was better than anticipated a year ago.
- The redistribution of sales tax receipts in 2013 and 2014 contributed to the improved
condition of the General Fund. Actual sales tax receipts have also continued to improve over
prior year receipts, with 2014 receipts increasing 4.8% over 2013 receipts.
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- The environments for contracting for capital projects and issuing new long-term debt remain
advantageous for the Town, resulting in lower than estimated construction costs and low
interest rates on new long-term general obligation bonds. New debt issued in 2011, 2013
and 2014 all had average interest rates under 3%.
The budget projections are based on many assumptions which, while they seem reasonable today,
will undoubtedly vary from actual conditions as we move through future years. When reviewing
these projections, users are cautioned to focus on emerging trends rather than individual numbers.
BUDGET PROJECTION VERSION 1 - This projection is based on the following assumptions:
- 2.5% annual increase in total Property Tax Levy, calculated to remain under the tax cap. 2%
increase in tax levy in 2017 allows for increase in water benefit fee (from $95/unit to
$100/unit) while still remaining under the tax cap.
- Capital projects in the General Townwide Fund, Highway Fund and Water Fund remain
financed largely by issuing new long-term debt.
- Assumed a 2% annual increase in salaries and wages. Retirement and health insurance
expense is assumed to increase with each year.
- 5% annual increase in water rates, 2% annual increase in sewer rates.
- Sales tax collections are projected to increase 2% over the prior year’s collections. The Town’s
actual experience has been an average annual increase of 3.73% over the past three years.
This projection indicates most of the major funds will keep year-end unreserved fund balance
above the 25% level through most years. The major exception is the Highway Fund, where the
unreserved fund balance decreases each year, falling below 25% in 2017 and then below 10% in
2019. The Water Fund will also decrease each year, falling below 25% in 2019. The property tax
bill for a typical property would remain largely unchanged, decreasing from $1,365.26 in 2015 to
$1,361.23 in 2020.
BUDGET PROJECTION VERSION 3 - This projection is based on the following assumptions:
- Annual increase in total Property Tax Levy remains unchanged from Projection 1.
- Highway Fund revenues are increased each year from the totals shown in Projection 1. This is
done by directing property tax from the Fire Protection Fund, and sales tax from the General
Townwide Fund and General Part-Town Fund, to the Highway Fund. Sales tax revenue in the
General Townwide Fund is replaced by corresponding increases in the property tax levy.
- Capital projects in the General Townwide Fund will be financed with current year revenues/
fund balance. Capital projects in the Highway Fund and Water Fund continue to be financed
by issuing new long-term debt.
- Other assumptions remain the same as Projection 1.
This projection provides additional revenue to the Highway Fund in an attempt to slow the
negative trend identified in Projection 1. With this projection, the unreserved fund balance in the
Highway Fund remains above 25% in all years. Unreserved fund balance in the General Townwide
Fund, General Part-Town Fund, and Fire Protection Fund will also remain above the 25% target in
all years, although at reduced levels from Projection 1. The property tax bill for a typical property
is estimated to decrease from $1,365.26 in 2015 to $1,358.07 in 2020, a decrease of $7.21 or 0.5%
over this five-year period.
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Mr. Engman asked if the projection for the Fire Projection Fund included paying the Town’s share
for the new fire apparatus the Village and City are going to be purchasing next year. Mr. Solvig
answered that the projection includes paying for the Village’s new pumper and other capital
expenditures we know about, but does not include the City. The Village has given us definite
numbers, while the information from the City is still somewhat vague. Mr. Engman also noted the
Committee was given copies of Projections 1 and 3, and asked if there was a Projection 2. Mr.
Solvig explained that Projection 2 is a manipulation of the information used to get from Projection
1 to Projection 3, but provided little additional or relevant information. He can give copies of this
projection to the Committee members if they would like to review it.
The Committee will present this information to the Town Board at the June study session.
• Property Tax Cap and Property Tax Freeze Programs.
Mr. Engman informed the Committee that the County is drafting a Government Efficiency Plan to
meet the requirements of the 2016 Tax Cap and Tax Freeze programs. This plan is based on
savings realized through changes in health insurance plans offered by the County and other
members in the health insurance consortium. This plan is expected to produce savings in excess
of the required 1% of their combined tax levies for years 2017 – 2019. Government Efficiency
Plans have to be submitted to the State by June 1.
This item will remain on the Committee’s monthly agenda and will be discussed on an on-going
basis as further information becomes available.
• Other Items.
- 2014 Audit: The auditors will be on-site the week of May 4 for field work. Dates for the
justice court audit have not yet been set.
- 2015 Bond Issue: The application for approval of the Sapsucker Woods Water Tank
Replacement Project and Water Improvement Area was received at the Office of the State
Comptroller. Once the application has been approved, the Town Board will need to adopt a
bond resolution for this project. After that we can proceed with the bond sale.
- Purchase of additional Road Salt: At yesterday’s Public Works Committee meeting, Jim
Weber reported that the Town has spent the $175,000 appropriated for road salt in the 2015
budget. Currently, there is approx. 100 tons of salt remaining in the Town’s salt barn. On
average, the Town uses 1,000 tons of salt from the beginning of the winter season to the end
of the calendar year. The remaining salt on-hand will not be sufficient to treat the roads for
the first part of the 2015-2016 winter season. The Public Works Committee is recommending
a budget amendment to increase the 2015 appropriation for road salt by $60,000. This will
allow the Town to purchase an additional 1,000 tons of salt in preparation for the coming
winter. A resolution to consider this budget amendment will be presented to the Town
Board at the regular meeting on May 11.
The meeting was adjourned at 1:16 p.m.
Next Meeting: Wednesday, May 27, 2015 at 12:00 pm, Town Hall - Aurora Room