North East to maintain property tax rate, cut spending
— Town officials expect to spend 6 percent less under the proposed fiscal year 2017 general fund budget, while also making use of some of the nearly $200,000 left over in this year’s budget to buy equipment and fund construction projects.
Director of Finance and Administration Ken Natale presented the proposed $2.85 million general fund budget during a public hearing last week, though no members of the public offered comments.
In his presentation, Natale noted that due to a combination of operational savings and unused money in the town’s contingency fund, North East will be able to fund some fiscal year 2017 requests from the fiscal year 2016 budget.
That includes about $11,000 in police equipment, $1,800 to purchase a generator and $27,000 in equip-
ment for the parks and recreation department. These dollars will also fund $40,000 of the $100,000 in budgeted renovations to the Jackson House and $8,000 for park walking path resurfacing, Natale said.
“The reason for setting this (the contingency funds) aside is so that there’s some cushion in the budget for any unexpected changes in cost or in revenues,” he said.
Any contingency fund money not used during the fiscal year can then be put toward capital projects or other needs, Natale added. But because the town has historically had a lot of money left in this fund, Natale suggested that for fiscal year 2017, the contingency money in the town’s general and enterprise fund should be reduced from a total of $225,000 to $100,000.
While the money in the contingency fund will change next year, the town plans to maintain its current property tax rate of 48 cents per $100 of assessed property. Because this rate is above the constant yield rate of 47.17 cents, it is still considered a tax increase by the state and will generate an extra $29,000 in revenue for the town, Natale said.
That tax increase translates to an extra $16.60 per year on a $200,000 property, Natale noted.
“We obviously take the position that we’re not going to reduce the income because it costs more to run this business every year,” Mayor Robert McKnight said.
The town’s water fund will also see some changes under the proposed budget. Town water rates will see a 2 percent inflationary increase, which translate to an 80cent increase for in-town customers and a $1.69 increase for out-oftown customers on a minimum bill. The budget also introduces a new $205 fee associated with replacing the radio transmitters on the new water meters if the property owner is found responsible for destroying it, Natale said.
But town water rates may change in the future as the budget also includes $25,000 for a professional evaluation of the town’s rate structure, Natale said.
“This is something that really should be done every 10, 15 years or so,” he said. “They’re going to come in and evaluate the cost of running the water utility and what the user fees need to be set at in order to break even.”
Outside of the water rates evaluation, the budget also includes $40,000 for an engineering study on the location of a new water tower, possibly along Red Toad Road, and $200,000 in deferred maintenance projects, Natale said.
Other major projects included in the proposed fiscal year 2017 budget are $85,000 in engineering fees to design a second floor for town hall and add a revetment to the north side of North East Community Park, about $19,000 to implement a new grant program for outside agencies and $400,000 to purchase a building for the maintenance shop, Natale said.
The town expects to see some savings in other areas though, Natale said. Retirements in the North East Police Department will result in $40,000 in savings while switching the employee health plan from United Health Care to the Local Government Insurance Trust’s Health Cooperative will save another $28,000.
But the biggest savings could come from terminating the town’s contract with Severn Trent Environmental Services, which had operated North East’s water plant for many years, Natale said. Last year though, the town decided to hire its own staff to run the plant and Natale projects this will save the town at least $100,000.
The town board will vote on the fiscal year 2017 budget at its June 8 meeting.