SARATOGA SPRINGS — The city is proposing a 0.38 percent tax hike to cover a 1.3 percent spending increase in its proposed 2019 budget.
The spending plan also addresses repairs needed to reopen City Hall to the public and to city employees.
Since an August lightning strike moved all city business from City Hall to the City Center, the cost and timetable for the repairs have been unknown.
During her budget presentation at Tuesday's City Council meeting, Commissioner of Finance Michelle Madigan gave the first preliminary estimate the price tag: $3.4 million, to be paid for initially with bonds and ultimately recovered from the property tax fund.
Madigan said insurance should cover as much as $4 million in repairs, but that figure could change as well.
Madigan and her deputy, Mike Sharp, attributed the spending increases in the budget — which will go from $46,136,623 to $46,968,984 — mainly to a 19% increase in departmental revenue.
Sharp said items like building permits, licenses, and other fees were the biggest factors in the increase.
During her presentation, Madigan also touted the city maintaining its AA bond rating and not exceeding the state property tax cap override.
The city's sales tax revenue has also grown, with Madigan projecting a 2 percent increase in 2019 to around $12.75 million in revenue. The key factor in the Spa City's sales tax revenue, according to Madigan, is the July-August track season. Revenue from that period in 2018 has not been reported yet, and could bolster the total even further.
While personnel expenses for the city have grown, Madigan said savings have come in retirement system and other benefits, partially due to new hires paying more of their own salary into the retirement system than current retirees did, thus reducing the financial burden on the city.
Personnel expenses still will account for the largest portion of the budget, at 57 percent, and the property tax will remain the city's largest revenue source, at 34 percent.
Madigan cautioned the City Council and the public during the meeting about borrowing money — there are several substantial bond expenditures in public safety coinciding with the City Hall repairs — and about drawing too much from the city's rainy day fund.
About 19 percent of the city's $2.4 million reserve fund will be used for the budget, which includes $300,000 in retirement savings. However, Madigan said she is confident in growing sales tax revenue along with the city's continued growth in departmental revenue.
"One of my top priorities is to try to reduce the amount we take from the fund balance," Madigan said after the Tuesday night meeting. "Normally, drawing that amount would indicate the likelyhood of running a deficit, but I've been able to run a surplus in past budgets."
Mayor Meg Kelly indicated that she was pleased with the budget, and added that the City Hall repair cost could still fluctuate depending on what the project manager and the insurance company find.
By November, Madigan said she will have a better idea what the total cost will be for the City Hall repairs, along with a more firm grasp on revenue with the sales tax numbers coming in by late October.
Correction 9 a.m., Oct. 10, 2018: This story has been corrected to indicate that the $3.4 million in City Hall repairs is to come from property tax fund bonds.