OSWEGO, NY â€“ Oswego Mayor Randy Bateman presented his 2011 city operating budget message following Monday nightâ€™s council committee meeting.
The mayor is proposing a 50 percent increase in the sewer rates in an attempt to make the sewer fund self-sufficient by 2012.
The following is his message and the reaction of one council member.
Our country is currently recovering from dire economic straits.
Nobody knows for sure what the future will bring, but things seem to be heading in the right direction in terms of the economy.
During preparation of the city of Oswego 2011 operating budget, the city faced a shortfall of $3,179,766 between department requests and projected revenues.
We immediately began looking at department budgets to see where cuts could be made before we looked to raise revenues.
After going through the budget, line by line, cutting everything to a minimum we were able to cut expenses by $1,057,889.
After we realistically adjusted a few revenue lines, we still had a shortfall of $1,995,877 to maintain the current property tax rate of $8.98 per thousand.
After factoring in the maximum property tax rate increase of 5 percent, which equated to $341,185, we would still be short $1,654,692.
After scrutinizing the budget for things that stood out, one line was again very apparent.
The Sewer Fund expenses for 2011 were $4,499,877.
The projected revenues for the Sewer Fund were $2,995,340.
There was a sewer fund balance transfer of $200,000, which left the property taxpayers of this city to subsidize the sewer fund in the amount of $1,304,537.
So, in effect the people who use our sewage treatment plants and donâ€™t pay property taxes, such as schools, churches, government buildings and other tax exempt properties are being subsidized by the folks who do pay property taxes in the amount of $1,304,537.
This is blatantly unfair for the people that do pay property taxes.
So, to reiterate, if there were a property tax increase to help offset this subsidy to the sewer fund, only the property taxpayers would pay and the tax exempt properties would not.
As you all know, the city has entered into a consent decree to separate and upgrade our west side sewer system infrastructure. One aspect of the consent decree is the creation of an Enterprise Fund whereby the sewer fund will be self-sufficient by 2012.
After tripling the sewer fee for 2010 to work toward this self-sufficiency, we heard comments that any future increases should come in steps.
We are still $1,304,537 away from having a self-sufficient sewer fund for the 2011 budget.
In order to achieve sewer fund self-sufficiency by 2012, I am proposing a 50 percent increase in the sewer rates for 2011.
What does this mean to the average flat rate user?
Currently, the flat rate user pays $143 per quarter for water ($65) and sewer ($78).
By increasing the sewer fund rate 50 percent for t5he flat rate user, they would go from $78 per quarter to $117 per quarter.
The flat rate user total bill would increase from $143 per quarter for both water and sewer to $182.
This equates to an extra 43 cents per day.
The metered rates will be increased accordingly.
The remainder of the shortfall will be made up from a transfer from the sewer and general funds for the 2011 budget.
An increase in the sewer fee, paid by all users, allows the property tax rate to stay the same at $8.98 per thousand and goes a long way to solving the recurrent problem of a multi-million dollar shortfall each year as a result of a sewer fund that is not self-sufficient.
This was not an easy decision and it will not be a popular one, but it is the fairest and most reasonable.
The fairest way to pay for a service, in this case sewer service, is to spread the costs to the users and not expect the property taxpayers to subsidize the tax exempt properties.
This fee increase will allow us to work towards sewer fund self-sufficiency by 2012 to comply with the consent decree.
The increase will make people move out of the city, Councilor Shawn Walker said after the mayor had made his case.
The Enterprise Fund has to be in place by 2012; if Councilor Walker has a different suggestion, heâ€™s free to bring it up at the budget workshops on Tuesday and Wednesday, the mayor noted.