Thomas Administration Proposes FY2019 Budget: Maintains Services while Investing in the Future
Mayor Thomas Proposes $116 Million Budget for 2019
Maintains Essential Services and Invests in Revenue Generation and Infrastructure
On September 19, 2019 Mount Vernon Mayor Richard Thomas proposed a $116 million budget for FY2019 that pays for essential services, invests in productivity, revenue generation, and infrastructure and stays under the state’s tax cap of 2.7 percent.
“Every budget comes down to making choices,” Mayor Thomas said. “There’s never enough money, so the “must haves” need to be separated from the “nice to haves”. Our 2019 proposed budget delivers essential services, invests in the future of our great city, and does so with an affordable tax increase of about 25 cents a day.”
In presenting the budget plan to the City’s Board of Estimate and Contract, Mayor Thomas noted the strides made by Mount Vernon in 2018. Crime is down 31 percent in the first half of the year. Home prices remain strong and the local economy is vibrant. New businesses, restaurants and shops — Ace Natural, Aris Renewable Energy and 520 Retro Diner (at the old Athena’s) to name just three — are opening across the city. The result is a 10.6 percent increase in sales tax revenue in the first half of the year — the third largest increase in the state.
Investing in the Future
Staying under the tax cap, the 2019 proposed budget invests in:
· Productivity — streamlining and automating applications and permits in Buildings, Recreation, Planning, Management Services, and other departments;
· Revenue Generation — creating a dedicated fund to ensure Mount Vernon has the money, expertise, and resources necessary to secure lucrative federal, state and private grants to stretch city tax dollars and support positions and programs that pay for themselves;
· Infrastructure — establishing a Capital Plan to take advantage of low-cost financing to maintain and improve the long-term health of our city.
The 2019 proposed budget calls for spending of $116,009,845, up from the 2018 adopted budget of $111,247,888, an increase of about 4 percent. Within that spending increase, the budget provides for 18 new staff positions — 3 part-time and 9 full-time tied to mandated environmental compliance — and salary increases to meet contractual obligations with unions and place commissioners’ pay more in line with neighboring communities.
Spending is offset by revenues of 9 percent. This is a conservative forecast, considering the strength of the Mount Vernon economy as evidenced by the 10.6 percent increase in sales tax revenues in the first half of 2018.
The proposed tax increase is 2.68 percent and under the state tax cap. The tax rate per $1,000 of assessed valuation is $406.58. Based on the average residential assessment of $10,000, taxes would increase by about $100 a year or roughly 25 cents a day.
For the typical Mount Vernon homeowner, city taxes typically account for less than a third of their annual property taxes. The breakdown is roughly 64 percent for school taxes, 27 percent for city taxes and 9 percent for county taxes.
“When taken together, city, county and school taxes place a high burden on our taxpayers,” Mayor Thomas said. “This is especially true this year with the uncertainty created by the limits on state and local deductions in the new federal tax code. As a result, we are doing everything we can to keep property taxes as low as possible.”
The new federal tax law limits the deductibility of property taxes to $10,000. This limit may be offset by other features in the new tax law, with the impact ultimately depending on each taxpayer’s unique circumstances.
Initiatives to Generate Revenue and Cut Costs
To bring additional revenues into the city, Mayor Thomas is urging the City Council to approve the new cable contract, which would pay the city roughly $1 million in annual fees, as well as reduce rates for seniors and eligible residents, increase Internet speed and provide public access broadcasting from City Hall. Every $600,000 in revenues lowers taxes by 1 percent.
On the cost-cutting front, the Department of Public Works has had great success using a new technique that incorporates recycled materials into our street paving efforts. This allows DPW to double the amount of street surface that can be paved within its existing budget.
The administration has also secured a new deal with the New York Power Authority to replace all city streetlights with new LED technology, all paid for by the savings on the city’s electric bill. In other words, every streetlight in Mount Vernon is fixed at almost zero cost to taxpayers.
Fund for Matching Grants
One new idea for 2019 is to create a $500,000 line in the budget for matching funds, from which all departments could draw. In the past, the city has repeatedly found itself in crisis drills because it could not identify funds, or the Comptroller’s Office withheld the funds necessary to secure federal, state or private grants. Just this year, the U.S. Department of Housing and Urban Development threatened to end a $1 million grant for the homeless because the city couldn’t come up with its $13,000 share of the program.
As incredible as that sounds, the situation is not isolated. A state grant for $1.6 million to fix sewers and an $80,000 federal grant to buy body cameras for police officers have both been stalled because of the city’s failure to deliver on its portion of the grants. The state has also told the Veterans’ Department not to bother applying for grants because it doesn’t have faith in its ability to follow through.
The Matching Grant Fund would ensure the city has the money and necessary expertise, such as grant writers, to seek and receive grants, which can have returns well in excess of the city’s contributions. The fund would also eliminate any confusion in the Comptroller’s Office as to where to draw the money.
Need for Capital Plan
Unlike neighboring cities and communities, Mount Vernon has not had a capital budget in recent memory. As a result, Mount Vernon has fallen woefully behind in maintaining its capital infrastructure, which involves everything from fire trucks to sewers to computers and buildings.
A prime example is the legal and financial crisis Mount Vernon now faces in trying to comply with the federal lawsuit requiring the city to stop the pollution coming into our waterways from our crumbling sewers.
“The sewer emergency could have easily been avoided had the city put a capital plan in place a decade ago when the Environmental Protection Agency first raised the issue,” Mayor Thomas said.
The capital needs of the city are more than $20 million. Rather than trying to catch up in one year, Mayor Thomas has proposed a $5 million capital plan for 2019 that would allocate roughly:
· $2 million to the Department of Public Works for sewers and other equipment;
· $1 million to the Fire Department for two pumper trucks,
· $1 million to the Police Department for radios and other necessary equipment, and
· $1 million for computers and software to automate and digitize processes within the Planning, Buildings, Assessor, Management Services and HR departments.
The cost to issue $5 million in bonds is about $450,000 a year for principal and interest payments over 15 years at an interest rate of 4.25%. This is a conservative estimate, bearing in mind that the current national average municipal bond rate on 20-year single A-rated paper is 3.4%.
Neighboring cities have well-funded capital budgets. Rye spends 20 percent of its budget on capital expenditures; White Plains 18 percent; Yonkers 10 percent and New Rochelle 9 percent. Mount Vernon’s capital budget last year was zero. A key benefit of the capital plan is that it allows the city to stretch out payments, paying for items, such as buildings and fire trucks, over the length of their lives rather than in a single year, as required by the operating budget.
“Looked at objectively, there is no good reason not to invest in a capital plan this year,” Mayor Thomas said. “These investments will increase productivity, promote health and safety, and protect taxpayers, all while keeping taxes under the budget cap.”
Unpaid Bills Cost the City Money
Mount Vernon currently has more than $1.2 million in unpaid invoices for work provided by vendors. Some vendors have not been paid since last year. Specifically, unpaid invoices in the city’s Legal Department total over $600,000, and the Department of Public Works has over $200,000 in unpaid bills from vendors for goods and services already provided. Two of DPW’s trucks, including the one that fixes streetlights, have been repossessed for non-payment.
The Comptroller has provided no explanation for this delay in making payments and refuses to even hire the staff necessary to deal with any backlogs that may have built up in the Finance Department. For example, there are two approved and pre-funded deputy Comptroller positions that remain unfilled nine months into the year.
The proposed 2019 budget reduces reliance on the reserve fund by $1 million with an allocation of $4.5 million. To view the full budget, please visit cmvny.com/2019Budget.