Villa proposes 9.3 percent tax levy increase in Amsterdam

Amsterdam Mayor Michael Villa finishes his "State of the City" address at City Hall in January.
Amsterdam Mayor Michael Villa finishes his "State of the City" address at City Hall in January.

AMSTERDAM — Mayor Michael Villa has proposed a $32.4 million 2019-20 city budget, which raises spending, taxes and user fees, but aims to reduce the city’s estimated $9 million budget deficit. 

Villa’s budget was given to Common Council members on Monday. The budget plan calls for a 5 percent increase in year-over-year spending and a 9.3 percent property tax levy increase, which would increase the city’s total property tax levy $925,605. The hike would take the total property taxes collected by the city from $4.7 million for the 2018-19 budget to $5.7 million. 

The increase would raise the city’s property tax rate per thousand dollars of assessed value by 5.6 percent, about 90 cents, from $16.08 to $16.90 per thousand. 

To balance the budget, Villa has proposed using $1.6 million of the city’s water fund. 

The budget would also attempt to pay down $510,254 of the city’s estimated $9 million accumulated deficit. 

City Controller Matt Agresta said the city’s budget deficit will not increase if Villa’s proposed budget is approved by the Common Council. 

Villa’s administration has been seeking deficit financing legislation from the state so it can borrow approximately $9 million to clear off the city’s accumulated budget deficit.

In January, the city’s consulting firm Canandaigua-based Municipal Solutions Inc. advised the city to raise property taxes at least 10 to 12 percent in order to convince the state and the bond investing community that the city was serious about fixing its long-standing budget problems. 

Amsterdam’s credit rating has fallen to junk bond status because of inadequate accounting practices going back to 2008.

Between 2010 and 2016 the city also failed to conduct any property foreclosures, which helped widen the budget deficit because the city had continued to budget for tax revenues from properties that weren’t paying taxes.

City officials have attributed this series of events to chaos in the elected City Controller’s Office due to deaths and resignations.

Villa said his budget includes no layoffs, in part because he did not want to raise taxes and cut services simultaneously. 

“We did the best we could, the overall picture is good … The city has come a long way in the last three an half years,” Villa said. 

Agresta said if the council approves Villa’s budget there is a chance it will begin to pay down the accumulated budget deficit. 

“A lot of other factors obviously play into that, because we don’t know if our health insurance is going to give us an issue. We don’t know if some particular revenue item may not work,” he said. 

Amsterdam is self insured, which means the city pays out all of its health insurance claims. The city charter sets April 1 as the deadline for the mayor to submit a budget to the Common Council, but Villa asked for a one-week extension so he could more closely examine health insurance data. 

Agresta said Villa’s 2019-20 budget includes $5.5 million for health insurance costs, which is offset by approximately $400,000 in health insurance premiums paid by city employees. He said if there are fewer than $5.1 million in claims the city will save money, but if claims exceed the funds available to pay them, that will cut into the deficit reduction. 

Villa’s budget increases the flat-rate user fees for sewer by 19.5 percent to $282.18 and increases the sanitation fees by 8.79 percent to $269.76. The flat-rate water fee will remain flat at $423.89. 

Deputy Mayor James Martuscello, who represents the 5th Ward, said he agrees with Villa’s plan to maintain services without any layoffs. He questions why the sewer and sanitation fees need to be raised.

“That’s the part I’m going to look into that. Why do they need to go up so high,” he said.

Villa said the increases to the sewer and sanitation fees were necessary due to repairs needed for the city’s aging infrastructure. He said his administration is attempting to increase the city’s tax base by promoting tourism through an increase in the number of annual events organized by the city’s Tourism, Marketing and Recreation Department from nine to 27.

Fourth Ward Alderman Dave Dybas said he hasn’t gotten through all of the 62 pages in the mayor’s proposed budget. He said the city only has a completed independent audit of the 2016-17 budget, but not the 2017-18 budget. He said he wants more information to understand whether Villa’s proposal makes sense. 

“It’s the mayor’s budget, but it’s not what I would call a classic budget presentation. I like to compare budgets to actual performance, that’s part of my training,” Dybas said.

The city still has expired union contracts for its Fire and Police departments. State law mandates that all public employee contracts remain in place until a new deal is ratified. 

Earlier this month the Common Council ratified contract extensions for the city’s DPW and police chief, which included 1 percent raises, bi-weekly direct deposit paychecks and changes to the co-pay structure for emergency room visits to encourage less expensive use of urgent care. 

Agresta said the city has a memorandum of agreement with the city’s police union, but it hasn’t been ratified by its members or approved by the Common Council. He said Villa’s 2019-20 budget factors in raises for the Police Department. Overall spending for the Police Department goes down in the proposed  budget from $3.8 million to $3.7 million, including a $82,977 reduction in the “personnel services” salaries line and a $5,000 reduction to overtime costs. The budget does increase holiday pay in the department by $3,110.

To approve Villa’s budget two-thirds of the city’s five member council will need to vote to break the New York state property tax cap. Last year, when Villa proposed an 8 percent tax levy increase, the council paired down the increase to within the tax cap.
Villa said he will veto any budget that does not attempt to reduce the city’s deficit.

It would take four out of five of the council members to override Villa’s veto. 

Categories: Fulton Montgomery Schoharie, News


No Comment.