The Current Budget Problem
The 2009 - 2010 Village Budget process presented the Board of Trustees with a set of problems not faced in recent years. The current economic situation has affected all levels of government, from the State to the Villages. Garden City is no exception.
As a government, our primary responsibility is to maintain public health and safety. Police, fire and public works services must be the primary concern of any responsible government, and their funding, at a responsible level, must take precedence over other community services. It should be noted note that a certain level of services must exist in order to maintain the quality of life residents of Garden City have come to expect.
As in recent years, the Board of Trustees has taken into consideration suggestions presented by the Citizens Budget Review Committee [CBRC] as well as other residents. While the Board of Trustees certainly understands that no one likes tax increases, residents must understand that Garden City is a municipality and not a private sector entity where, for example, management can simply cut costs by eliminating people and positions at will. As a municipality, not only are we subject to New York State laws, rules, and procedures, we are also subject to union contracts, and civil service regulations. In difficult economic times these can be burdensome to the taxpayers, but nevertheless must be followed.
In light of this year's loss in revenues coupled with rising costs, we have made serious cuts to both the capital and operating sections of the 2009-2010 Village Budget, as well as necessary adjustments to increase revenues.
REVENUE LOSSES
Our revenue from interest earned on short term investments and mortgage recording taxes was more than $900,000 below what was forecasted. This was due to unprecedented low interest rates (average earned below 1% compared to 3% + forecasted), combined with the decline in home sales and resulting financings. Also, tax certiorari actions equated to a loss of approximately $800,000. The drop in the first two revenue sources, is unprecedented in recent years.
It should be noted that last year, our revenues were augmented by using the $1,700,000 St. Paul's reserve fund to lower the tax burden. While it certainly can be said that this is the taxpayers' money that was simply returned to them, it can also be argued that if some of this money were kept in reserve, it certainly could have been used to offset part of the unanticipated declines in revenue this year.
Therefore, to offset the current loss in revenues, not only was it absolutely necessary to make substantial reductions in every part of the 2009 - 2010 Operating and Capital Budgets, it was also necessary to raise certain fees and implement new ones.
The original Village Budget for 2009-2010, proposed by the department heads, totaled $57,966,000, has been decreased to $52,800,000.
THE CAPITAL BUDGET
The initial 2009 - 2010 capital budget presented to the Board of Trustees by the Village Department heads totaled $5,038,930. The major items in this presentation included over $3,000,000 in parking lot, roadway, sidewalk and curb repairs or replacements; replacement of vehicles and other equipment for the Police, Fire and Public Works departments; installation of synthetic turf playing fields; and improvements in technology which would have produced certain savings in energy costs. This proposed budget was deemed far too excessive and was sent back to Village staff for a reduction.
The first reduction brought the Capital Budget down to $3,238,326. The major item eliminated was the replacement of certain parking lot surfaces and some road repairs, as well as the elimination, or deferral, of such items as the installation of synthetic turf ball fields. After careful analysis, the revised Capital Budget was also returned to Village Staff for further reductions.
After much analysis and discussion by both Village Staff and Trustees, the number was cut by over 40% to $1,872, 862. Major items eliminated were a new fire truck, several new police cars and public works equipment, all new synthetic turf playing fields, all Library capital requests and over $1,000,000 in sewer, road, curb and street repairs.
Although the deferment or replacement of capital items not considered totally necessary this year helped to minimize the tax increase, many of these capital projects and purchases cannot be delayed for an extended period of time. Our long-range Five-Year Capital Plan should not be dismissed as maintenance of our infrastructure is critical. Hopefully, the current drain caused by the loss of interest and recording taxes will abate with a revived economy. This combined with new fees and surcharges, should ease the tax burden in future years, when these capital expenditures must be incurred.
THE OPERATING BUDGET
Before going into the major components of the Operating Budget, it should be noted that out of approximately 300 Village employees, only 8 are not subject to the conditions of either a union contract or civil service regulations. We are acutely aware that labor costs are high. However, we cannot address the situation in the manner some residents continue to insist that we follow. For example, comparisons to steps taken by distressed corporations, such as General Motors, are simply not correct. Garden City cannot make arbitrary personnel changes that conflict with existing agreements, and we cannot declare Chapter 11 bankruptcy in an attempt to negate union contracts or civil service provisions.
Labor Contracts
We have thoroughly investigated various ways to reduce labor costs by eliminating certain full time positions. However, one labor contract forbids excessing fulltime personnel until all part time personnel have first been eliminated. While certain full-time positions could be eliminated, there are also seniority provisions in the contracts which protect long term employees. Likewise, assigning volunteers to handle certain responsibilities of paid employees is subject to strict rules of the contracts
Garden City has just settled a two year retroactive contract with our police union, which expires in May 2009. This summer, negotiations will begin on a new contract. We have been in negotiations with the firefighters for approximately 12 months, and the CSEA contract has approximately one year remaining.
In some of our union contracts, if no compromise is reached, then binding arbitration is the law. Both mediation and binding arbitration involve payments to third parties. There is also no guarantee that the Village would benefit. A prime example was when Nassau County went to arbitration, and the final decision actually was worse for the County than the original proposed settlement.
Fire Department:
Residents, especially those who attended our budget work sessions, as well as union representatives, should remember that the Board of Trustees and Senior Village staffs are, first and foremost, concerned with health and public safety issues. Garden City now has a response time of two to three minutes which is critical when lives and property are at stake. Some residents have ardently suggested that we use some type of a national benchmark of a ten minute response time to a fire alarm. Garden City cannot be compared to a rural area and we will not apply this type of benchmark. Likewise, it was suggested that volunteers, rather than paid firefighters, staff the two substations on weekends and at night. This change was studied, but not implemented for personnel and contractual reasons. The closing of the fire substations was also discussed and rejected because residents in the southeast and western areas of Garden City would have a much longer response time without these substations. The exact amount of the increase in time would depend on traffic conditions and closed railroad crossings.
Police Department:
The Garden City Police Department is not only an effective crime fighter and deterrent, but also the first responders to many medical emergencies. Here again the police response time is between two and three minutes.
Additionally our police and associated civilian employees are substantial producers of revenue. In 2008, a combination of parking and various moving traffic fines generated close to over $1,100,000 in revenue. When staff is reduced and officers are moved from traffic enforcement to patrol duty, there almost surely will be a decline in fines.
REDUCTIONS IN COSTS
With these contract constraints and public health and safety in mind, the Trustees and Senior Staff decided on a wide variety of expense cuts. We are not replacing four vacant police positions and considering a possible restructuring of posts and tours to reduce overtime. Two paid firefighter positions are not being filled, and fire truck crews have been restructured to reduce overtime. $180,000 was cut from the Library's Operating Budget. An estimated $122,000 will be saved by not heating St. Paul's. Non-personnel expenses were reduced across the board and overtime cut in Purchasing, Public Works and the Recreation Department. Part-time and seasonal employees in Public Works and Recreation have also been eliminated. Unfortunately, this will result in reduced winter programs at Cluett Hall, the elimination of ice skating at Lake Cornelia, as well as some summer, evening, and noon time concerts. These actions resulted in the elimination of approximately 11 positions. and a reduction of close to $1,500,000 in operating expenses.
Revenue Increases
In addition to these budget cuts, Village staff was required to submit suggestions for new revenues. These enhancements were forecasted to increases village income by over $800,000. Major new increases are $286,00 for commercial rubbish pick up, $121,00 in overweight truck fines, and $55,000 in charges by our Fire Department for LIRR, LIPA, and National Grid emergency calls,. Others are increases in various building permits, site plan approvals, and a $50.00 increase in the annual railroad parking permit fee. Items still being discussed will be some type of fee for playing field usage, and charges for special residential rubbish pick ups.
The above actions reduced the Village tax increase from a possible 10% increase to 5.9%, with an estimated an annual increase to the average household of approximately $300.00.
SUMMARY
Residents should understand that the budget and spending process is ongoing. Simply because an item is budgeted does not mean it has to be spent. Items still under consideration are contributions by non union staff to the medical plan, a reduction in the number of Village owned cars, strict review of employee travel for training and seminars, and charges to groups sponsoring parades and street festivals. Although no one is happy with the tax increase, taxpayers should recognize that the average tax increase over the last four years was 3.20%, with a 0% increase in 2007 - 2008. The Board of Trustees will remain ever diligent in searching for ways to continue reducing expenses.
