OSWEGO, NY – The proposed fiscal year 2014 operating budget for the city of Oswego was submitted Monday night by Mayor Tom Gillen for consideration by the council.
The tentative spending plan for the coming year is $34,574,842 for all funds. That is an increase of 14.2 percent compared to the original fiscal year 2013 budget of $30,112,264.
This reflects an increase of $4,462,578.
“The Great Recession of 2008 has left its indelible mark upon our local, state and national economy and it will continue to impact our city’s budget for some time to come,” the mayor said.
The Port City’s economy is starting to emerge from the overall slowdown caused by the recession, he noted.
“However, we begin 2014 with the daunting challenge of controlling our spending as well as a strong commitment to growing revenue and improving the quality of life for our residents,” he added.
The consent decree has placed “a significant financial hardship” on every one of the city’s residents, the mayor said.
“It is our moral duty, as well as a legal mandate, that we provide a safe and clean environment for all residents of our city. And, I am happy to state that there will be no increase in the Enterprise Fund rate for 2014. This means that there will be no increase in water and sewer rates,” Gillen said.
In his budget message, Mayor Gillen said:
Through an honest and professional partnering with the DEC and EPA, we are on or ahead of schedule for the timelines agreed upon under the consent decree. And we are confident that we will have the opportunity to revisit these terms and conditions, as well as the established timelines for completion. This commitment to working together will benefit all our city taxpayers.
There are other positive indicators that our city is improving as well.
Sales tax, which is one of the leading sources of revenue for our city, is up 4.08 percent over 2012 year-to-date performance.
We have seen dramatic improvements in our downtown through the addition of new businesses and renovation of some of our historic buildings.
There is significant economic growth in business at the Port of Oswego and the expansion of SUNY Oswego and Novelis that will positively impact our revenue base. The Oswego Renaissance project is in the process of restoring our historic neighborhoods and improving the quality of life for the entire community.
The Tree Stewards are rebuilding our city tree canopy. This will benefit the city aesthetically and environmentally, as well as providing a green solution to complement our consent decree.
However, 2013 was a financially challenging year for the city of Oswego. The city’s projected non-property revenue for the year actually decreased by an estimated $804,879.
Because of this adjustment, the 2014 Requested Tax Rate requires an increase of 81.8 percent. That translates into a tax rate of $18.252 per $1,000 of assessed value.
The increase in tax rate is due to mandated increases in retirement costs; increased health care caused by the insurer fees of the Affordable Care Act; and Group Rate experience (how much our health care plan paid to the members). We also have to prepare ourselves for the potential loss of revenue in the on-going and future negotiations with NRG, National Grid and the Metropolitan Water Board.
It is a fact that this represents a significant increase in the tax rate.
However, there are no layoffs or any loss of services to our residents. The traditional practice of downsizing and the under-funding of equipment repair and replacement over the past decade, in lieu of raising taxes, has resulted in a diminution of the very services that our residents count on and define us as a community.
These services and their relationship to the tax rate per $1,000 are:
Police protection $6.26
Fire protection $5.59
DPW services $5.01
Central services $0.83
Total Tax Rate $18.252
In simple terms, this proposed tax rate of $18.252 per $1,000 is an increase of $575 on a $70,000 home.
The real fact is that this places a significant burden on the property owners’ shoulders. The question to be asked is why? What are the contributing factors for such an increase?
One reason is that there has been a change in our city’s taxable assessed value from $781,520,232 to $733,356,840 – a loss of $48,163,392.
Other contributing factors:
The mandated retirement increases:
Police and Firemen’s Retirement System from 25.1 percent to 28.4 percent
Employee Retirement System from 18.5 percent to 22 percent.
The mandated Affordable Care Act, which assess a 2.3 percent increase for Medicare contracts and an 8.46 percent increase in insurer fees for active and non-active Medicare contracts.
Those contributing factors account for the following increases and payouts:
Police wage increase – $905,996
Management lump sum payout – $28,750
SEIU lump sum payout – $99,000
Fire lump sum payout – $61,000
Costs from the above:
PFRS Retirement – $274,627
ERS Retirement – $28,105
FICA/Medicare – $83,748
Other contributing factors from estimated revenue estimates are:
Ambulance service due to loss of town support
Fewer marina launches than estimated
Loss of revenue from Midtown Plaza development and a new hotel due to contested lawsuits.
After careful review of the requests made by our city department heads, I have cut a total of $65,879 from the proposed budget.
But, even after these cuts are made, it still leaves us with difficult choices to make.
In order to decrease the proposed tax rate … what if we …
Remove all new positions? Tax rate changes to 17.459 per 1,000
Remove all equipment? Tax rate changes to 17.181 per 1,000
Remove both? Tax rate changes to 16.394 per 1,000
For every $1 million that we cut from the budget, the rate changes by $1 per thousand of assessed property value.
The reality of our current situation is that these are challenging times.
This administration is committee to easing the burden that is placed on our taxpayers. That is why I am driving a legislative agenda for our Common Council to address and evaluate policies and programs that will grow revenue initiatives that will not be placed on the backs of our property owners.
The Assessor’s Office will be implementing a state-of-the-art management system that will address city property assessment and management.
The Planning and Community Development offices will be restructured to improve performance and communication.
The Clerk’s Office and Engineering Office will be updating services and rates for special permits that are in line with updated standards similar to other communities.
The Building Code and Zoning Department will enforce our codes and issue appropriate, fair and balanced penalties to those who do not adhere to our established laws and guidelines.
The Oswego Police Department will also be focusing on having the violators and scoffers pay the fines for ignoring our laws.
The Oswego Fire Department will review and improve the billing of their services throughout the city and county.
The Mayor’s Office will commit to establishing beneficial relationships with not-for-profit community members, such as SUNY Oswego, Oswego Health, the Port of Oswego and others in order to address real and perceived inequities.
It is also imperative we build a better legislative partnering with Oswego County in order to promote tourism and investor based business development. Working together, we can better serve the needs of all our residents and build a better community that capitalizes on our abundant natural resources.
These are the times when we need to invest in our city and our people. Our city is poised for success and we need to be the stewards of responsible management that will transition our successful growth into the future.
Building a dynamic and fiscally stable Oswego is a goal that will require us to make hard choices and difficult decisions. The 2014 General Fund Proposed Budget offers few options.
I ask for the support of the entire Common Council in support of this budget.
We may occasionally disagree on polices, but not when it impacts the safety, economic growth and improvement of the quality of living in our city.
I count on each and every one of you to show the courage, wisdom and leadership to do what is right for the city of Oswego and its current and future residents.
I want to thank the department heads for the timely submissions of their requests and I especially want to thank our City Chamberlain, Deborah Coad, for her knowledge, professionalism and comprehensive preparation of the budget proposal.
Thanks also to councilors Ronald Kaplewicz and Michael Myers for their invaluable input and support of this document.
We are truly fortunate to have this incredible “Uncommon” Common Council as our city government.
As proud Oswegonians, we will celebrate our spectacular natural resources, our historic past and our bright future.
But, in fact, our greatest resource has always been and always will be the people of Oswego themselves!
We believe that, while we may have challenges ahead of us, we will deal with them as Oswego families have always done for generations – with strength and a total commitment to our strong family values.
It is with pride in our accomplishments and our people that I, Thomas W. Gillen, as mayor, submit the proposed city of Oswego 2014 operating budget to the Common Council for consideration.
Thank you, gentlemen. It is an honor to serve with you.