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HomeMy WebLinkAboutMeeting Notes 1-27-2016 1 BUDGET COMMITTEE Meeting Notes - January 27, 2016 Committee present: Eric Levine - Chairman, Bill Goodman, Pat Leary Staff present: Mike Solvig, Judy Drake Others present: Pamela Bleiwas Meeting was called to order at: 12:04 p.m. AGENDA ITEMS: • Review and approve meeting notes. Mr. Solvig reported that the draft meeting notes from the July 29, 2015 and September 16, 2015 had not yet been completed. • Set 2016 Budget Committee meeting dates. The committee reviewed and approved the proposed meeting schedule for 2016. The committee will continue to meet, for the most part, on the last Wednesday of each month. Exceptions to this schedule in 2016 will be August, where the meeting will be held on the 24th. Meetings will begin at 12:00 noon, and will be held at Town Hall in the Aurora Room. • Discuss 2016 Budget Committee priorities. The committee identified the following topics as priorities for 2016: - Review Reserve Funds and Accounts, setting maximum balances where appropriate. - Continue review of the Town's voluntary contributions to community organizations. - Review Town’s Long-Term Debt. - 2016 Bond Issue. - Property Tax Cap / Property Tax Freeze. - Five-Year Financial Projections. - Five-Year Capital Improvement Plan and 2017 Capital Budget. - 2017 Town Budget. Mr. Levine stated he would also like the Committee to discuss the possibility of moving the current Highway Fund line on the property tax bill to the General Fund line. • Update on 2015 Sales Tax and Mortgage Tax Collections. - Sales Tax Collections: The Committee reviewed the Sales Tax Collections Report for the Year Ended December 31, 2015. As expected, total collections for 2015 fell below the prior year’s total collections for the first time since 2009. Sales tax collections in 2015 totaled $3,067,336, a decrease of 2.2% from the total of $3,135,084 collected in 2014. Mr. Solvig explained that the Town had budgeted a total of $2,885,000 in revenue for 2015, so while actual collections decreased from 2014, they were still over budget for 2015. Total sales tax collections for 2016 are budgeted at $3,000,000. 2 - Mortgage Tax Collections: Mr. Solvig reported that collections for 2015 totaled $415,760, an increase of 26.3 % over the $329,274 collected in 2014. Included in the 2015 total was an unexpected one-time receipt of $169,770 from the expansion of Kendall at Ithaca. Without this one-time receipt, collections for 2015 would have only totaled $245,990. This would have been a significant decrease from the prior year. Total mortgage tax collections for 2016 are budgeted at $300,000. • Preliminary Financial Report for the Year Ended December 31, 2015. The Committee reviewed the preliminary Financial Report for the Year Ended December 31, 2015. Results were generally positive, with fund balance increasing in all funds except the Light District Funds and Debt Service Fund. In those funds, the decrease in fund balances had been expected. For the major funds, results of 2015 operations were as follows: - GENERAL TOWNWIDE FUND - Fund equity increased by $412,938, with revenues of $4,691,541 exceeding expenditures of $4,278,603. Ending fund balance totaled $3,530,367, which includes reserves of $811,260 for the Parks and Open Space Plan Reserve, $180,522 for the General Benefit Reserve, $40,067 for the Preserve Maintenance Reserve, and $10,010 for the Land Stewardship Reserve. The unreserved fund balance of $2,488,508 represents 52.7% of 2016 budgeted appropriations. - GENERAL PART-TOWN FUND - Fund balance increased by $36,125 as revenues of $1,309,090 exceeded expenditures of $1,272,965. Total expenses were significantly under budget, due partly to the planning study being postponed for another year. The ending fund balance of $869,865 includes $63,595 for the General Benefit Reserve. The unreserved fund balance of $806,270 represents 51.5% of 2016 budgeted appropriations. - HIGHWAY PART-TOWN FUND - With revenues of $2,884,916 exceeding expenditures of $2,755,730, fund equity increased by $129,186. Revenues were higher than expected, helped by increased receipts for sales tax, sale of surplus equipment and state aid (CHIPS). Ending fund balance of $1,838,855 includes $249,988 for the Highway Equipment Reserve and $99,954 for the General Benefit Reserve. Unreserved fund balance totals $1,488,913 or 42.4% of 2016 budgeted appropriations. - WATER FUND - Fund balance increased by $316,111 as revenues of $4,157,429 exceeded expenditures totaling $3,841,319. Revenues were higher than expected, helped by increased receipts for metered water sales. The ending fund balance of $2,407,436 includes $14,234 for the General Benefit Reserve. The unreserved fund balance of $2,393,202 represents 60.5% of 2016 budgeted appropriations. - SEWER FUND - With revenues of $2,770,514 exceeding expenditures of $2,207,376, fund balance increased by $563,138. Increased revenues were realized due to higher than budgeted sewer rent receipts. The ending fund balance of $2,747,936 includes $8,011 for the General Benefit Reserve and $1,306,276 for SJC projects account. The unreserved fund balance of $1,433,649 represents 45.7% of 2016 budgeted appropriations. - FIRE PROTECTION DISTRICT FUND - With revenues of $3,609,065 exceeding estimated expenditures of $3,465,987, fund equity increased by $143,078 to total $1,181,217 at year-end. The year-end fund balance represents 34.6% of 2016 budgeted appropriations. Staff is waiting for a few final items (including December fire protection invoice, and December attorney’s invoices) before closing the books for 2015. There are also some final adjustments to both revenues and expenditures that will need to be made. 3 The reserve funds and accounts are all in very good shape as of year -end, and will be reviewed by the Budget Committee at the February meeting. • Results of 2015 Bond Issue. The committee reviewed the report on the 2015 Bond Issue. In November 2015, the Town issued $2,950,000 in new long-term general obligation debt. - Public Improvement (Serial) Bonds, Series 2015: This new general-obligation debt was issued to finance the Town’s 2015 capital projects. These projects include the following: Coddington Road Water Main Improvements $ 650,000 Sapsucker Woods Water Tank Replacement 1,500,000 Honness Lane Improvements 500,000 Marcy Court Improvements 300,000 Issued at a par amount of $2,950,000 plus a premium of $39,471, less issuance costs of $31,738, net proceeds for the Series 2015 bonds totaled $2,957,732. Issuance costs represent less than 1.1% of par amount of the bonds. The average interest rate for this issue is 2.005% over the 15 year life of the bonds. Mr. Solvig commented that the cost of borrowing money has remained lower for a longer period of time than anyone would have predicted several years ago. The average interest rates for the 2011, 2013, 2014 and now 2015 bond issues are all below 3%. • Discuss Property Tax Cap and Property Tax Freeze Programs. The Committee reviewed a notice from the Office of the State Comptro ller informing NYS municipalities (with a fiscal year beginning on June 1) that the increase in the allowable levy growth factor of the tax cap calculation will be limited to 0.12%. This significant decrease in the allowable levy growth factor will allow for almost no increase in the property tax levy if a municipality intends to stay under the tax cap. Since 2013 the Town’s allowable levy growth factor of the tax cap calculation has declined each year, from 2.00 % in 2012 and 2013, to 1.66% in 2014, to 1.56% in 2015, to 0.73% in 2016. This subject will be discussed on an on-going basis as further information becomes available. • Discuss Town Budget Process. Mr. Goodman told the Committee he would like to try increasing public participation in the annual budget process. Called Participatory Budgeting, this involves organizing neighborhood meetings where we would hear what the residents have to say. He would like to have 3 or 4 meetings in different parts of Town, where we would give an overview of the budget and budget process, and allow our citizens to ask questions. He would probably begin with Forest Home, as they have the only organized neighborhood association in the Town. Ms. Leary commented to take care not to poke the sleeping bear. • Changes in Bolton Point Water Rate Structure. Mr. Goodman explained that Bolton Point will be changing the water billing structure in 2017. The current billing structure uses a minimum of 10,000 gallons each quarter for billing purposes, but about 40% of customers use less than 10,000 gallons per quarter. 4 Under the new billing structure, the minimum usage will be reduced to 5,000 gallons. This will reduce the quarterly charge for customers using less than 10,000 gallons. For example, under the current structure and rates, a customer using 5,000 gallons/quarter is billed at the minimum of 10,000 gallons paying $65.50 for the quarter. Under the new structure, this same customer will only be charged for the 5,000 gallons of water he used, paying $32.75. Over a year, this amounts to a savings of $131.00. Mr. Levine asked if the water rates would increase under the new billing structure. Mr. Goodman replied that rates will have to increase to make-up the revenue that will be lost from those who previously paid at the 10,000 gallon minimum but used less. Mr. Levine then asked if the new water rates would be graduated so that customers who used more water also paid a higher rate as the usage increased. Mr. Goodman replied that the rates Bolton Point charges the Town would be the same for all usage levels. As the high-usage customers would already be paying more with the higher rates, the Bolton Point board did not want to add onto this with rates that increased as usage increased. The Town will need to determine on its own how it sets the rates for Town customers. Mr. Goodman also advised the Committee that the Town will need to revise its billing structure for sewer rates. • Other Items. No other items were discussed. The meeting was adjourned at 1:02 p.m. Next Meeting: Wednesday, February 24, 2016 at 12:00 pm, Town Hall - Aurora Room