Wednesday, February 8, 2012

Mayor Linda Witte Unveils $16.5 Million Budget Request Lowest proposed tax rate increase in a decade

Mayor Linda Witte Tuesday handed the Olean aldermen the preliminary draft of a $16,514,523 million general fund budget for 2012-2013. She pointed to a projected zero tax rate increase and expressed hope the Council will act quickly to adopt the plan.

“It is undoubtedly a time of uncertainty for revenues, and our infrastructure needs are great. But there will be no cut in services from their current level due to careful fiscal planning, guided by attention to the residents’ needs,” said Mayor Witte.

“Sewer rates and water rates will increase by 1 percent, the first hike in water rates in three years,” the Mayor added, noting even a small increase in revenues is evidence of how the city plans to maintain services.

 Mayor Witte asked members of the Council’s Finance Committee to look at the numbers, which are also being reviewed by the New York State Comptroller. The preliminary budget is supported by a $14.64 tax rate per $1,000 of assessed property value.

“The tax rate will rise by only one cent, just a fraction of a percent more than the 2010-2011 rate,” she explained.

The last year the city saw a zero tax rate increase was in the 1990-1991 fiscal year, and in 2001-2002 the tax rate was lowered by less than one percentage point. Property taxes will generate just over $7.1 million  to support the $16.5 million general fund.

Revenues are forecast to increase $408,056, primarily due to increased state funding for the OATS bus system. In addition, the city’s tax base has expanded by $13.5 million due to more valuable assessments, fewer exempt properties and INDECK’s return to the tax rolls due to the retirement of its PILOT payments.

“Increases in our projected spending with my plan total $408,056, which is a 2.5 percent increase over the 2011-2012 level of appropriations,” she added.

The increase in mandated pension costs accounts for more than $278,000 of this total, while the rise in OATS operating expenses helps to account for part of the increase in expenditures as well.

Mayor Witte slashed $1,194,350 from a 15.5 percent increase tallied in the first round of departmental budget requests

The plan also provides for a contingency account of 4.87 percent of operating costs, to be ready in case of unforeseen emergencies. This amount is near the five percent recommended by the NYS Comptrollers Office.

A final budget must be in place by April 15 for the 2012-2013 fiscal year beginning June 1.

Mayor Witte also pointed out that the city will not see a cut in AIM, or state aid to municipalities. The most recent information received in the mayor’s office projects the city will not lose two percent of its aid, or $45,741, as in 2011-12.

“While I am pleased that we will not be raising our tax rate under this plan,  I cannot forecast a similar scenario in 2013-14,” said Mayor Witte.

Mayor Witte’s plan contains a modest one percent hike in water and sewer rates, which will translate to a $5 or $10 hike this year for the average residential water and sewer customer.

“We are still working on finding funds to replace the deteriorating lines, make needed upgrades in our sewer treatment facility and other projects. It would not be prudent to slash rates if we want to continue operating efficiently to serve our residents,” she said.

Mayor Witte said she looks forward to working with the Common Council, the Department Heads and the New York State Comptroller’s Office to have a budget finalized by April 15.

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