City residents won’t see their taxes increase next year under the proposed 2015 comprehensive budget unveiled Tuesday night by city Finance Commissioner Michele Madigan.
Next year’s budget will be constrained, however, by large increases in personnel and employee benefit costs — the result of long-expired public employee contracts settled only recently and increasing health insurance costs, particularly among retirees. In fact, those two expenses are expected to drive almost all of a nearly $1.4 million increase in spending in the city’s general fund next year.
“Transitioning toward a more accurate budget reflecting full payroll requirements is a challenge,” Madigan said. “I believe that the 2015 comprehensive budget provides the blueprint for doing so, the point where excellent city services and sustainable city government converge with no increase in taxes.”
The city’s general fund budget would total just over $41.8 million next year under Madigan’s proposed spending plan. Personnel services, including wages and Social Security contributions, would increase $829,800.
The City Council voted in July to settle contracts for City Hall workers represented by CSEA, awarding them retroactive pay increases of 2.5 percent for 2013 and 2014 and 2 percent for 2015 and 2016. The settlement resolved contracts that had expired in 2012, but was expected to cost the city about $450,000 in its 2015 budget.
“Updating long outdated contracts results in large budget jumps, and that is what we are seeing in the 2015 budget — the effect of years of overdue compensation and delayed budgeting,” Madigan warned.
To help offset this, she has proposed a moderate increase in the use of city reserves, foreclosure proceeds and unassigned funds from the city’s fund balance.
“The city has built these funds up with taxpayer dollars to use when they are needed,” she said.
Public Safety Commissioner Chris Mathiesen, however, raised concerns during the City Council’s agenda meeting Monday over the sustainability of cost-of-living wage increases.
“How can we continue to sustain this?” he said. “We’re getting to a point where it’s difficult for us to afford them for people on the high end of the scale, and I’m wondering if we’re being fair to people on the low end of the scale. Is there another way to compensate people for cost-of-living increases?”
Six of seven public employee contracts are set to again expire at the end of this year.
Meanwhile, health insurance costs are slated to rise $494,000 next year. Insurance increases averaged 10 percent per carrier, with the largest at 20 percent for carriers covering retirees. The average family plan costs roughly $22,100 a year per employee.
The 2015 budget year marks the fourth time municipalities must stay within a state-mandated property tax cap. Based on a complicated formula, Saratoga Springs is allowed a total property tax levy of nearly $19.5 million. The city’s four levies — general fund, debt service fund and two special assessment districts — total nearly $18.9 million. As a result, the city’s combined property tax rate will remain the same.
Seven budget workshops will be held for individual departments in coming weeks, beginning at 2 p.m. Thursday (Finance); 1 p.m. Tuesday, Oct. 14 (Mayor’s Office and Recreation); 4 p.m. Thursday, Oct. 16, (Accounts); 1 p.m. Wednesday, Oct. 22 (Public Safety); and 3 p.m. Friday, Oct. 24 (Public Works). Two additional workshops will be held, if needed, at 6 p.m. Tuesday, Oct. 28, and 1 p.m. Thursday, Oct. 30.
Two public hearings are required, with the first to be held at 6:45 p.m. Tuesday, Oct. 21, at City Hall and another to be scheduled once the City Council has made adjustments to the plan. The council must adopt a budget by Nov. 30; if it doesn’t, the proposed budget will become the adopted budget.
The complete 2015 budget proposal can be viewed in its entirety on the city’s website at www.saratoga-springs.org.