WPCNR COMMON COUNCIL CHRONICLE-EXAMINER. May 10, 2005: At the Common Council meeting of May 2, Majorie Davis, Co-President of the League of Women Voters delivered a statement on the League’s position on the proposed 2005-2006 city budget. The speech was notable in that it did not support the city budget policy and criticized the strategies used to “balance” the city budget. The speech was delivered after 9 P.M., an unusual happenstance, because in the past, long-time observers of Council meetings recall, the public hearing on the budget in front of the Common Council was usually done first in the proceedings instead of late in the agenda. For those who missed it, here is the text of that speech:
I am Marjorie Davies, Co-President of the League of Women Voters of White Plains. The League has studied the White Plains budget as part of its local program and this statement represents a consensus of those participating in our study. We would also like to publicly thank Budget Director Anne Reasoner, along with Jim Hricay, Chief Deputy Budget Director, for taking the time to meet with League members to explain and discuss the budget. We commend them on preparing a clear, informative, and thorough budget document.
- The Common Council enters the budget process this year knowing it has difficult choices to make. In light of continued increases for pension funding and employee health benefits and other costs, the proposed 2005-06 budget makes substantially more use of one-time revenue sources than in the past. And this is in a year when the City has $3.1 million more in fund balance to appropriate and sales taxes are expected to increase 12.4%, an increase which is not sustainable in the long run. It is more important than ever for the City to develop a long-term plan to bring anticipated future expenses in line with recurring revenues to forestall a deterioration in finances.
The League is particularly concerned with the budgeting of $3 million from the sale of property to cover operating costs in this year’s budget. In last year’s budget, the City budgeted $750,000 in revenues from the sale of property, oinly $343,500 of which is expected to be actually received. Regardless of whether the full $3 million is collected, the use of this one-time revenue source in the current budget creates an even larger deficit to close in the following years from recurring revenues, in effect, the property tax. The has already reported operating deficits in the last three fiscal years. The City’s General Fund Balance has been declining during this same period, reducing future financial flexibility. While the city’s fund balance is still at an adequate level, projected to equal 19% of revenues at the end of the current fiscal year, a continued structural imbalance between City revenues and expenses could drain even this level of fund balance.
- The League requests the City seriously explore ways to bring future expenditure increases in line with ongoing revenue growth through administrative and functional consolidations that ensure continued levels of service, but at a more efficient cost.
Functional consolidations, such as the already implemented consolidation of parks maintenance with the Department of Public Works maintenance, will be essential to providing effective and efficient services. Over the years, the City’s Budget and Management Advisory Committee has investigated various areas of functional
consolidation, such as in the area of community services and youth services, which could reduce administrative overhead costs while ensuring the continued provision of quality services.
- Given the high proportion of the budget accounting for salary and employee costs, 74% , the City must look at creative ways to reduce future growth in this area.
Certain City employee groups currently contribute to health care coverage. The city should seriously consider expanding co-payments to additional categories of new hires. Both the private and public sectors continue to face double-digit increases in healthcare costs. Private sector employees, however, have been contributing to those costs for many years.
- The City should be careful not to further decrease fund balance. A strong fund balance is critical to the City maintaining the high Aa1 bond rating, which results in lower borrowing costs.
Given the city’s heavy reliance on a cyclically sensitive revenue source, the sales tax, fiscal prudence requires the maintenance of a substantial financial cushion. For the fiscal year ended 6/30/04, the sales tax accounted for 38% of General Fund revnues. The City should be careful not to appropriate substantially increased levels of fund balance from one year to the next, if this in fact creates a gap in the following year. Using less than the full amount of available designated fund balance to balance the budget would also result in an increased fund balance in the following year. In the alternative, any increase in the available fund balance designated for the subsequent year’s expenditures could be used for non-recurring costs, such as future capital costs.
- The City has already committed to maintaining and acquiring open space by previously issuing bonds for that purpose and we urge them to continue this commitment.
This year’s budget calls for the sale of surplus city-owned properties. When the City decides which of its properties it will sell, we encourage the City to carefully review which of these properties are appropriate for open space or parks, in particular, city owned properties abutting the Greenway. Once the City decides which should be maintained for open space, we urge the City to promptly seek designation of those properties as parkland, in order to eliminate the City’s liability for making tax payments on these properties.
Thank you for your consideration of these issues.
