City Council

2009 Comprehensive Budget Public Hearing 10/22/08 CITY OF SARATOGA SPRINGS Public Hearing 2009 Comprehensive Budget Music Hall – 3rd Floor WEDNESDAY, October 22, 2008 6:30 P.M. PRESENT: John Franck, Commissioner of Accounts Ken Ivins, Commissioner of Finance Ron Kim, Commissioner of DPS Anthony Scirocco, Commissioner of DPW STAFF PRESENT: Michele Boxley, Deputy Commissioner, Accounts Eileen Finneran, Deputy Commissioner, DPS Kate Jarosh, Deputy Commissioner, Finance Shauna Sutton, Deputy Mayor PUBLIC HEARING Commissioner Ivins opened the public hearing on the 2009 comprehensive budget at 6:40 p.m. He explained that Mayor Johnson was not able to be in attendance; therefore he would be acting as ‘Chair’ of the meeting. Announcement Commissioner Ivins announced as clarification the 00 Vanderbilt Avenue issue was left open from last night’s Council Meeting. Presentation Commissioner Kim presented the Council with a handout to supplement the presentation he was giving tonight on code administration. He stated the handout will be available on the web for the public. Commissioner Kim explained Code Administrators must be certified in code administration. There is over 25 years of experience between the 2 Code Enforcers currently on staff with the City. They train landlords and tenants of their responsibilities and also work with volunteers regarding clean up projects. Commissioner Kim highlighted the following items:  In 1993, there was a case regarding Vincent Sarro of 114 Congress Street (S&M Market). The market was in terrible disrepair and an order to vacate was issued. The property was assessed at $5,000 at that time. Because of the clean up lead by the code enforcers, the property has been sold to the West Side Stadium and now the property is valued at over $300,000.  In 1996, a property on Franklin Street and Washington Street has an assessed value of $4,000. Code enforcers took action to clean up the property. That piece of property is now known as the Masie Center and is valued at $1.4 million.  The Crown Oil property on South Broadway was in disrepair. Within the last few months, the awning was removed from that property and the whole lot was cleaned up. Page 1 of 4 2009 Comprehensive Budget Public Hearing 10/22/08 Commissioner Kim advised that Assistant City Attorney Tony Izzo was instrumental in assisting the code enforcers with each of these property issues to bring these properties to the current state they are in.  The property that received the most attention in the City and nationally was the unlicensed pet cemetery. In 1997, Kevin Veitch found an individual who said they had a crematory for pets but it was actually a dumping ground for the pets. He was able to stop the illegal business and brought in the DEC. Commissioner Kim also advised that the code enforcers handle the regulation of storage containers, zoning issues, and property issues. They make the City the type of place people want to visit and stay. He extended his thanks to Dan Cogan and Kevin Veitch for the work they do. Commissioner Franck suggested this be brought up again at the next Council meeting. He also advised he reviewed chapter 118 and had the following questions:  It looks like we added a second article with fees to tie into the state mandate. He is trying to figure out the type of revenue realized from this. Fees for inspection located on page 13, of the online version, states there will be no charge for an initial inspection to determine compliance with the applicable provision of this code or for a first re-inspection. Then Page 15 states we will offset administration costs of preparing and maintaining, the initial and subsequent registration fee will be and then the fees are listed. One place says we are not going to impose a fee and another place says we are.  The second question is if we are going to make a revenue adjustment to hopefully keep these guys on, he has to figure out where we are getting the number. He can’t get close to the $70,000 figure Commissioner Kim mentioned at another meeting.  On November 16, 2006 when this was first being mentioned, it is in the minutes as Commissioner Kim stating New York State said the first year should be devoted to completing inventory of the units and no inspections, once we made this law. Commissioner Franck is not projecting revenue until 2010 and he is trying to project what the revenues will be without any extra time to hit the number. Public Hearing Commissioner Ivins did not go through his presentation on the proposed 2009 comprehensive budget as people in attendance had already seen the presentation. He announced the next public hearing as Tuesday, October 28, 2008 at 6:30 p.m. at the Canfield Casino. After that public hearing they will be looking to amend the budget in November. Commissioner Ivins opened the floor to the public. Mark Lawton of 209 Nelson Avenue stated he had a few areas of concern. The largest revenue was from property taxes. What are the assessment levels? Are funds set aside with dealing with assessments? He hoped for an explanation as the numbers are askew. The assessment levels seem to be leveling out. Mark Lawton went on to say this is a multi year problem. The Council needs to be careful of what they are adding to fixed costs, what is being negotiated and how they prepare. There is growth in the budget. From 2006 to this proposed budget, there is a decline in revenue generated. Should something be done about this? The fees in 2006 used to cover ½, now it covers 1/3. He also has a problem with the recreation center being built; is it the time to be talking about a major capital project? He is worried about the annual recurring costs. Priorities are important in budgets. When he was budget director for the State of New York, and they hit the wall with the bankruptcy of NYC, they put a moratorium in place on capital projects. It was costly but less costly than continuing the projects. Page 2 of 4 2009 Comprehensive Budget Public Hearing 10/22/08 Mark Lawton also asked if the Council was sure all capital budget items are in the 6 year plan. If not, the Council can’t move forward on an item. He also asked if there was any ‘pay as you go’ in the capital budget or is it all debt. This will make a difference on how you carry yourself forward. Mark Lawton stated the debt in the city is inadequate to support infrastructure in the City. It is not good for any municipality to rely wholly on debt. The Charter of the City of Saratoga Springs states the comprehensive budget must include any entity that has a claim on the City’s resources even though the City doesn’t run it. Commissioner Franck suggested that Mr. Lawton’s questions be answered now since there are few people in the audience. He went on to say that assessment increases were considerably less this year than it has been over the past couple of years. In his first year of office it was $100 + million, in 2007 it was $90+ million and this year it is in the low $50 million. There is considerably less building from a dollar standpoint. That figure is the final role as of July 1st compared to the final role of July 1st of the previous year. It nets out any changes due to lawsuits, whether we lost them or compromised with them. He expects the assessment number to go down further next year. We are not at full assessment, we are at a 78.35% assessment level and we use a lagging indicator. The value we are going to be taxed on in January 2009, is the value as of July 2007. Commissioner Frank also advised money has been put in the budget to refund property taxes in case we lose an Article 7 case. Normally an Article 7 is commercial or multi family; we have 2 mega mansions that are landmark cases in New York. Money was put away last year for one and this year money has been put away for both plus 8 or 9 other outstanding cases. The online assessment system has helped us to clean up a mess; properties were listed with the wrong rooms and the wrong square footage of homes. Mark Lawton asked what is the amount that is put aside for Article 7s? Commissioner Franck advised the line item is funded at $120,000 for all the outstanding Article 7 cases out there. Some cases started before he got in office. Mark Lawton asked what is the potential liability, if any, if we don’t go to full value assessment? Commissioner Franck advised there is no liability. The level of assessment has to be at the same ratio throughout the City, it has to be consistent. In Saratoga County, there are 35 municipalities and only Wilton and Malta are at full assessment; they don’t have a town tax. By law if you go to 100% and stay at 100%, every 6 years you have to do a total re-assessment. That would cost $400,000 – $500,000 to do in today’s dollars. Commissioner Ivins stated the full comprehensive budget is available in the Clerk’s office and the library. It contains the sewer, water and City Center budget, 6 year plan, and capital budget as well. Commissioner Scirocco stated his department put $300,000 in the capital budget to take a comprehensive approach to the aging infrastructure. He believes the problems exist in the core of the City and that’s where they are going to focus. Mark Lawton asked if that is the reason for the additional personnel in the engineer’s office. Commissioner Scirocco advised this work will probably be handled by an outside firm. This plan is going to address the storm sewers and sanitary sewers. Mark Lawton advised one of the reasons they allowed an increase of debt service is for the infrastructure of the City. You need to be able to project over a long period of time. He also asked if there were any savings from the inventory process to determine if duplication. Page 3 of 4 2009 Comprehensive Budget Public Hearing 10/22/08 Commissioner Franck advised inventory is an ongoing regular supply, such as screws, bolts. His department has a fixed asset clerk for things that have more than one year of life. We received the management letter from the auditors and they found tremendous progress in fixed assets. We had to ‘re-inventory’ the fixed assets. Our person has made great strides and cut many steps out by doing everything electronically, avoiding dual input. We are now in compliance for financial audit statement purposes. We are getting proper information to figure out our balance sheet. Our financial statements reflect more clearly and accurately. Mark Lawton asked if there is any concern regarding self insurance. Commissioner Franck advised our insurance premiums have been reduced by $ 331,000 over the past 2 years and have remained level while our coverage increased. We do put reserves away for cases, but our self insurance numbers are accurate and strong. He strongly suggests we look at workers’ compensation instead of going through the County. Mark Lawton asked if we still have the program where we buy in bulk. Commissioner Franck advised that we are currently looking at buying at a fixed rate versus a variable rate. He felt we should not enter into a fixed rate back in September as we were going into the fall and with the market like it is. It is up to Council to vote but he feels we are close to locking into a rate. Mark Lawton asked if there are any operational directives regarding use? Commissioner Scirocco stated we are in an energy performance contract with Johnson Controls. We have done some weatherization, installed solar panels at the water treatment plant, controls have been put on the heating system at City Hall, etc. There is going to be a major decrease in cost to the taxpayers. Commissioner Kim stated his department has discussed doing their best to reduce fuel consumption. Part of their difficulties is they have to respond to calls and they are where they are. Commissioner Scirocco stated he has sent a directive out to his staff that there should be no unnecessary idling of trucks. Mark Lawton stated he looked at areas where he thought there would be possible savings for what they are trying to accomplish. The more people know about the budget the more they will understand the choices that are being made. He is very concerned about the capital budget. He doesn’t have the feeling that there is a correct procedure or process being followed. Commissioner Scirocco stated a lot will be hashed out at the workshop. Commissioner Ivins moved and Commissioner Franck seconded to close the public hearing at 7:42 p.m. Ayes – All Respectfully submitted, Lisa Ribis Clerk Approved: 11/18/08 Vote: 5 - 0 Page 4 of 4