CARS HOMES JOBS

Taxes up 4% in Sch'dy budget

Job reductions part of proposed $78M plan for ’13

Monday, October 1, 2012
Text Size: A | A

Schenectady Mayor Gary R. McCarthy presents the 2013 proposed budget to members of the City Council and the public at a meeting in September.
Schenectady Mayor Gary R. McCarthy presents the 2013 proposed budget to members of the City Council and the public at a meeting in September.

— Taxes are going up and jobs are being cut, but City Council members said the proposed 2013 budget is nowhere near as bad as they expected.

Despite the city’s deteriorating financial situation, taxes in the proposed budget would go up “only” 4.18 percent — a far cry from the 22 percent tax increase that the mayor said the city was facing.

Mayor Gary McCarthy presented his proposed $78.88 million budget to the City Council on Sunday afternoon, saying that the tax increase “doesn’t seem like that bad of a number.”

“It’s when you couple that with county and then school taxes that you get the overall tax that is clearly a burden,” he said.

For the average property owner with a house assessed at $100,000, taxes would go up $56 next year, to a total of $1,391.

Council President Denise Brucker said she could live with that, though she added that the council will search for cuts to lower the rate.

“I would love to have a tax decrease,” she said.

View budget

The Capital Region Scene has the proposed budget and the executive summary, which can be accessed by clicking HERE.

Councilman Vince Riggi also said he wasn’t horrified by the budget.

“I’m thinking, maybe it could be worse,” he said.

In addition to property taxes, the garbage collection fee is going up too, by $20 per household. A three-family household would pay $627 next year; a one-family would pay $209. Elderly and disabled residents would still pay $100.

There are many job cuts as well, with 32 positions removed from the proposed budget. But many employees are being transferred — three engineering workers will move to the sewer and water fund, and 20 part-time pool workers will be paid by the Boys and Girls Clubs of Schenectady, which now runs the city pools. Of the rest, only 5 employees would be laid off. The others could “bump” down to lower-paid positions.

Mayor Gary McCarthy added 10 other positions, including an employee who would focus on collecting delinquent taxes and three code enforcement staffers to help oversee the huge influx of foreclosed houses coming under city control. The city already owns 150 foreclosed houses and expects to take 200 more this month.

Code enforcement must determine how each house should be renovated to bring it up to code and oversee the work. Contractors and real estate brokers will work together to sell each house. McCarthy’s budget expects 20 houses to sell next year, for a total of $300,000.

Interest in houses

He says he thinks the city can easily do that, citing the great interest shown Sunday morning when the city showcased the houses for sale.

At 10 a.m., when the show started, City Hall was “mobbed” with people, McCarthy said.

“Today we had a lot of interest in the properties,” he said, suggesting the city could sell many more than 20 houses in the next year. But he acknowledged that he had been criticized in the past for being optimistic about such sales. The state Comptroller’s Office advised that he stop relying on “uncertain” revenues.

In response, McCarthy said, “We’re trying to budget in a conservative manner.”

McCarthy also wants to add two police officers and three firefighters, while eliminating a police deputy chief position.

The fire department will spend less on overtime if it gets more firefighters, McCarthy said.

He pledged to work harder to collect delinquent taxes. This year, with the threat of foreclosure, the city collected $6 million of its unpaid taxes. But there’s another $12.5 million unpaid, as well as $2 million in old parking tickets.

The city will “aggressively pursue those revenues,” McCarthy said.

Fees and fines

City officials will chase other revenues too. Among other items, McCarthy expects to bring in an additional $282,000 in rental certificate fees.

“We’re going to be more aggressive and we’re expecting more compliance,” he said of that fee, which is ignored by the vast majority of landlords.

Police will inspect trucks to make sure they obey weight limits.

“They make a big impact in terms of wear and tear on the roads,” McCarthy said, adding that the police can bring in “at least” $100,000 in fees for overweight trucks.

Of the $2 million owed in old parking tickets, he expects to bring in $235,000 next year, possibly with the help of an outside collection agency.

He is putting off one major expense. The city will pay only a portion of the 2013 pension payment to the state, saving $1.36 million. Schenectady will have to pay the amount owed plus interest over the course of the next few years, while still making future years’ pension payments.

“I’d rather not be amortizing the pension payments,” McCarthy said. “But I’ve got to bring some stability [in taxes].”

Overspending

The city is still spending more than it will receive in revenues. In McCarthy’s proposed budget, the city will spend $3.1 million more than it will receive. The extra money will come from savings set aside in reserved accounts for capital projects and tax stabilization. The capital projects fund will pay for $400,000 of the 2013 debt payment, while the tax stabilization fund will be used to offset general fund expenses. Both savings accounts will be drained, Finance Commissioner Ismat Alam said.

In the past, the city used its unreserved savings for the same purpose, but there is now less than $75,000 left. That has created serious cash flow problems for the city.

Spending more than revenues — in other words, running a deficit — has also led to official criticism. This year, the city’s independent auditor criticized the city for yet again running a deficit by using $4.8 million of its savings to pay for budgeted expenses.

Alam noted that the problem will be less next year, with a $3.1 million deficit.

“We are less reliant on our fund balance and we are more reliant on new recurring revenues,” she said, citing the sales tax agreement as a major source of new revenues.

That agreement will bring in $719,000 in additional money, while the rest of her recurring revenues would come from aggressively collecting fines, fees, rental certificates and property taxes. The estimated $300,000 in house sales is also included as a new recurring revenue.

The City Council will spend the next month meeting with department heads to go over the budget, line by line. If the council members want to make any changes, they must vote on their budget by Nov. 1.

Riggi said he plans to propose eliminating the city-owned body shop in the new Bureau of Services complex, which is budgeted to cost $98,296, and stop paying the county to repair the city’s vehicles.

“I want us to do our mechanical work in-house. We can outsource the body work,” he said.

The body shop was initially estimated to bring in $150,000 in revenue, but that was dropped to $50,000 in the 2013 budget. City officials had hoped to get rust-removal work from the county and nearby towns.

Riggi added that he’s still not happy with the garbage collection fee. When it was first proposed in 2004, he led a protest outside City Hall. He said the fee simply isn’t fair.

“There still isn’t a unit of measure,” he said Sunday. “You could put out one bag or you could put out 30 bags and it’s the same price.”

 
Share story: print print email email facebook facebook reddit reddit

comments

October 1, 2012
9:23 a.m.
don says...

The City of Schenectady has a mere $75,000 in savings for an entire city. My household has more money in savings in that. What is wrong with this picture? Gross mismanagement of funds for several years has brought this city to the brink. This is truly disgusting.

October 1, 2012
10:55 a.m.
poupore says...

Mayor Gary McCarthy...saying that the tax increase “doesn’t seem like that bad of a number.” And that pretty much sums it up. When you have an elected official proposing a deficit budget, even with a tax increase that is fiscally irresponsible. No household could ever run their budget like that because you couldn't go to your employer and say, I'm spending more than I make so I'm going to require a 4 percent wage increase. Wouldn't that be nice! No, in the real world we have mandates (taxes, insurance, etc.) to deal with and we make cuts accordingly. Schenectady will continue it's slow, steady decline with this type of inspired "leadership". Keep up the good work!

October 1, 2012
12:31 p.m.

It is not a slow and steady decline.....the hole is getting deeper and the BS is getting thicker....We need hard decisions made to stop the abuse and the thievery being allowed by the snake oil salesmen that have bought these leaders with promises and votes. We need accountability with independent decision making to have change.

October 1, 2012
3:55 p.m.
robbump says...

But where, oh where could they possibly have raised more money for poor Schenectady???

Maybe a bigger share of county SALES TAX??

October 1, 2012
5:23 p.m.
wmarincic says...

King Gary and his merry band of liberal stooges on the city council are again going to raise taxes, wow that's a surprise. You dopes just keep electing these democrat idiots and then sit back and complain about the taxes. Sounds insane to me.

Log-in to post a comment.
 

columnists & blogs


Log into Dailygazette.com

Forgot Password?

Subscribe

Username:
Password: