That squeaking coming from Dunkirk's City Hall isn't a rusty door, it's the city administration trying to squeeze as much as possible out of every dollar spent.
That was the theme as Mayor Richard Frey held a required public hearing Thursday morning on his proposed budget for 2011. He said it was a tight budget when he presented it.
"When we prepared everything, and whatever, whoever, wants to call it whatever they want to call it, I do have some set fees that I have to pay that I have no control over and I don't care what we do," he explained. "I think of Charley Graves' obituary last week in the paper, 'he quit breathing and quit paying taxes.' I guess that's the only time we're going to do it so I thought it was very appropriate. I'd like to put that in for mine."
Dunkirk Mayor Richard Frey
The mayor began by discussing the general fund, saying an $89,000 increase in health insurance costs could have been higher without negotiations that are ongoing. There is also a $156,000 increase in contractual expenses along with a $252,000 increase in pension contributions required by New York state, making a total of $497,000 in increases that the mayor said he had no control over.
An extra $316,000 in NRG PILOT program revenues for 2010 and 2011 have helped the city's finances as well, but not enough to maintain the current tax rate.
"I raised taxes 50 cents. Council hasn't done anything with it yet; they haven't come together, they haven't proposed," Frey stated. "As I've said, they've got a tough job in front of them, the same as we just went through, two tremendous months. There's a lot of uncertainty out there."
Frey explained how Fund I was balanced.
"Raising taxes raised $130,000 and we took $100,000 out of our tax stabilization funds, the first time the tax stabilization fund has been touched. It's up around $580-590,000 now," he stated. " ... That raised $496,000 and ... you can see we ended up with a contingency of somewhere around $90,000. The uncertainties, we had a very low contingency this year, we only had like $26,000."
Frey said the contingencies were for the unknowns.
"What's down the road? We don't know what's down the road," he explained. "The tax increase takes you up to $16.85 per thousand."
As for the jump in Fund I from $13,928,419 to $14,377,183, Frey said the increase of $448,000, "was set in stone for us there."
The mayor said Fund II's proposed drop of $160,000 in the 2011 budget was a "little bit of a bright spot."
"Again, we had a $60,000 increase in health care, contractual and pension funds. So all-in-all, everybody did a great job down there," Frey said. "... You have to understand, our contingencies and that are starting to show the benefits of putting the automatic-read meters in and stuff like that."
The mayor described Fund III as "our troubled area."
"Our revenues are nowhere near projected, what we did, I have no idea. We're working at it everyday," he explained. "I think we have some solutions. ... I think we're going to be able to put our finger on more things and at a quicker response time."
The Fund III 2011 budget is up $300,787 with health care, contractual and pension fund increases accounting for $71,000 of the $4,320,912 Frey proposal.
"I put a rate increase on sewer of $1.75 per 1,000 gallons and usually it's a 15,000 gallon minimum per household average, there's other and they use less. It's $8.75 increase a month which comes out to $105," he said. "So if you own a $50,000 house, you got a $25 tax increase and you also have a $105 sewer increase so you have a $130 increase total in sewer and taxes."
Frey said uncontrollables and items that don't have finalized costs when the budget is prepared make things difficult. He cited fuel reports showing costs rising 13 cents a gallon from September to October.
"A year ago to this year, we're up 28 cents. I have no way of projecting that when I prepare a budget," he said. "We took a figure, we added maybe 5 percent to it or something like that."
Frey added that diesel costs have gone up 32 cents over the last year. In addition, the day after the budget was ready, the county told the city landfill costs would be going up as well, something that did not make his budget deadline.
As for reducing costs, Frey said there was but one way it could be done.
"It's not what you're going to cut, or how you're going to cut, or what you want to cut, it's to the point now I'm saying to you, I'm saying to the council as well as to the public, what services do you want cut because that's the only way we're going to reduce our costs," he stated.
The city will be negotiating contracts, both of which expire Dec. 31, with the two unions representing the paid firefighters and the management employees. Contracts with the unions representing the police and the non-uniformed employees are good until Dec. 31, 2011.
"Of course we're going to talk. I think they're very intelligent people, they understand where we are, they understand our sacrifices," Frey said. "They also understand they're not second class citizens.
"They're entitled to the same benefits as other people have, and I'll grant you, if we can afford it, we can afford to, if we can't, we have to talk about it. I think that's the door we have to leave open. ... You know everybody beats on us, reduce our workforce, reduce our workforce. But this is how critical it is now. It's a case that we have to start cutting services, it's the only way that we're going to conserve."
The only questions at the hearing came from the Common Council members in attendance, Rose Floramo and Stacy Szukala.
Floramo asked about the hike in sewer rate fees.
"We could not balance the budgets on a lower increase in the sewer fees," Frey replied. "I believe we even talked $1.50 a 1,000. ... We were going to have a shortfall in balancing the budget we put before you."
Floramo asked if that helped the contingency.
"Not only the contingency, but it's going to help us in the shortfall on our revenue. I'm not as concerned about the contingency," Frey replied. "I've got to go back to the state auditors having told us for two years, you've got to make these funds stand on their own.
"We used to supplement it out of our Fund I when we did the major transfer of $1 million. We don't do that any more and this is something that's catching up with us and we're finally getting in a position where we can handle it now."
Szukala asked if Fund III would be self sustaining in 2012 with the proposed sewer rate hike for 2011.
"We know some things out there coming up in 2012 that we don't have now in 2011. I could not answer you as to, do I give you a guarantee that this $1.75 is it for a while? I can't answer that," Frey replied while citing the extra $316,000 from the NRG PILOT program that will not be available in 2012.
The mayor also said the city could lose another $60,000 in revenue if a proposal by Chautauqua County Executive Greg Edwards to do away with tax share funding on the sales tax is approved.
Frey said to use the tax stabilization fund according to the rules and regulations there had to be a 2.5 percent increase in the property tax rate. He said 42 cents met the 2.5 percent minimum.
"We rounded it off," he said of the proposed 50 cents increase. "Could we survive on taking 8 cents off? I don't know because you've only got $90-some thousand in the contingency."
He added that without using the tax stabilization fund it would have resulted in a $1 tax rate increase per thousand of assessed value.
Floramo asked if more could be taken from the tax stabilization fund.
"I hope we're not going to raise taxes 2.5 percent next year," she said.
"You always have to raise taxes to get to the tax stabilization fund," Frey replied.
"We're raising them anyways so I'm wondering why we couldn't use $200,000 instead of $100,000," Floramo said. "Is there a law?"
"Oh no," Frey replied, "We can take anything we want but there was not a need to take the $200,000."
"So next year, if you choose to tap into the tax stabilization fund again, you have to raise taxes yet again?" Szukala asked.
Frey replied that was the case and the fund was set up that way in a previous administration.
"Like Dr. Muntz said the other night, and I understand where the man is coming from, but now you have to stop and tell me, what services do you want cut? What don't you want us to do?" Frey asked. "You want us to mow the lawn every other week in the park? Do you want us to maybe not mow the lawns in the park? ... You want us to pick your rubbish up every other week?
"That is the hard choices that are out there to make."
There were no written comments submitted prior to the hearing.
The Common Council is set to begin its formal budget review Monday at 5 p.m. during a City Hall meeting of its Finance Committee.
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