By Roy S. Ryniker

The Board of Trustees recently approved a $53.7 million dollar budget for the fiscal year beginning June 1, 2007. This budget provides the financing for the approximate 317 full-time Villages employees that provide Fire, Police, Public Works, Recreation and other assorted services. This Budget is entirely separate from the School Budget.

Budget Profile:

($000)

Operating Expenses$48,298

Capital Projects3,527

Debt Service1,878

Total Budget$53,703

How does a resident put this $53.7 million in perspective? How does it compare with the spending levels of other villages in Nassau County? Other villages in New York State?

In seeking answers to similar questions, last year the four Garden City Property Owners Associations supported formation of a Citizens' Budget Review Committee (CBRC) which was then ultimately endorsed by the Board of Trustees. This Committee did extensive research on the Village's budget process and also analyzed trends in expenses going back from 1994 to 2005. For the fiscal year 1994-95, total expenditures were $31.6 million. Garden City's expense levels and trends were compared with the financial results of other villages in Nassau County and New York State. List below is a summary of the CBRC's findings that were issued in a report in Fall 2006:

1. The Village of Garden City's (VGC) increase in expenditures was not due to growing population, as the Village's population had remained relatively constant at 21,672 people.

2. The growth in expenses was not primarily due to increase in staff, as the full-time staff level rose only 2% over that period (311 to 317 budgeted full time staff).

3. Over the 10 year period studied, VGC's Operating Expenses (expenditures from all funds except those for debt service payments, equipment purchases, and the construction/improvement and acquisition of fixed assets) grew at 175% of the inflation rate. During this same time period, benefits grew at 326% of the inflation rate while total compensation (salary/overtime/benefits) has grown at 206% of the inflation rate.

4. If the increases in the tax levy had grown at the inflation rate, they would be 11% less than the actual levy in 2004-05.

5. Compared with 554 Villages in New York State, for 2004 (most current year available at that time) VGC's Operating Expenditures, on a per capita basis, were 230% of the New York State average.

6. Compared with 64 other Villages in Nassau County, VGC's operating expenditures, on a per capita basis, were 200% of the Nassau County average.

7. VGC's per capita operating expenditures were the 2nd highest in Nassau County for villages with total expenditures exceeding $9 million; Sands Point had the highest per capita spending level.

VGC's level of operating expenditures does include service levels that are not offered by many other villages. For instance, VGC operates as one of only two municipalities in Nassau County that have a joint paid and volunteer fire department. All other villages have an all volunteer Fire Department. VGC's Fire Department, with 35 full-time positions, has a $6 million annual budget.

Following issuance of its Fall 2006 report, the CBRC was invited by the Board of Trustees to participate in the hearings for the 2007-08 proposed budget, the first time a citizens group was invited in participate in this process. Members of the CBRC performed extensive analysis on the 2007-08 budget proposal and process in addition to attending all the budget hearings. In March 2007, the CBRC made the following Recommendations to the Board of Trustees concerning the Village's General Budgeting Issues and Procedures:

1. All departments to develop material and actionable data about employee activities and productivity, recurring and non-recurring work, essential and non-essential activities, etc. Determine what service levels to measure, how to measure them, and the associated costs of providing those services. Establish operational and financial performance benchmarks.

2. Annual reconciliation and review of all pre-existing reserves and encumbrances on the Village's balance sheet.

3. Annual review of all funding for unasserted, unquantifable and contingent liabilities (insurance reserves, retirement reserves, etc.).

4. The current Citizens' Budget Review Committee (CBRC) should be authorized to work with Department Heads to identify and quantify outsourcing opportunities and report findings to Board of Trustees.

5. The Village should retain an auditor, on a consulting basis, to oversee Village financial management. This auditor should be from a firm separate from the Village's auditing firm and should report to the Village's Audit Committee quarterly. Estimated annual fee $50,000.

6. Freeze employment levels at the current level. Open positions should not be filled until outsourcing opportunities are fully analyzed.

7. Board of Trustees should get a monthly report on all overtime expenses incurred, details by department and the reason for the overtime. (Budgeted overtime for 2007-08 totals $1.5 million)

8. The budget review process needs to start the first week in January each year, to allow more time to examine the funds requirements.

9. The CBRC should be formalized and included each year in the budget review process. That Committee to meet with Village management in October each year to discuss the information requirements for the budget process.

10. Village management should issue a quarterly report on opportunities to reduce expenses and increase revenues.

The CBRC is waiting on a written response from the Board of Trustees on these recommendations which can then be passed on to all the Property Owners Associations and ultimately to all Village residents.

Roy S. Ryniker is President of the Reorganization Alternatives Group, Ltd. and is Chairman of the Garden City Citizens' Budget Review Committee. Contact him at Roy.Ryniker@ReAltGroup.com with comments/suggestions on the Village's budget.