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January 19, 2010
To The Editor:
Over the past week or two, Cornwall-on-Hudson residents read about a 26.5% increase in their property taxes and a 16.4% increase in water rates. The increase won’t be that high and the situation isn’t as dire as it seems.
Here are some facts that bear mentioning:
1. Department heads in Police, DPW and Water turned in budget requests below last year’s numbers.
2. The Fire Department requested $20,000 more for a total operating budget of $164,000, which is still less than three years ago.
3. The administration budget is unchanged except accounting software needs replacing for $18,000. The manufacturer won’t support the old system anymore. This system must meet State standards.
From an operating standpoint, costs are under control. On the overhead side, we are getting beaten up by health care costs- the only significant overrun this year. Unfortunately, some other bad things are going on.
1. The Village has a long standing habit of paying last year’s bills out of this year’s money. This amount is increasing slightly every year. Which means that we are more “short” each year- a kind of rolling deficit even though we are at or close to budget.
2. We don’t have an adequate “fund balance”- comparable to “checking account balance” or “contingency fund.”
3. Sales tax and mortgage tax allocations from the county are down, lowering revenue.
4. Our bond rating is falling. There is one step left between our current rating and “junk bond” status. To satisfy the bond agencies, we need to generate about $100,000 annually until we have a budgetary cash reserve of about 10%. This will be the bulk of any tax increase.
If we don’t maintain that rating, the village will be paralyzed. We won’t be able to replace garbage trucks, fire trucks or borrow money for emergency repairs. We have to prepare for capital outlays. For example, the fire department ladder truck is 37 years old and in need of replacement. We can’t just cut or ignore these things. If the ladder truck goes out of service, homeowners insurance rates will increase more than the debt service for a new truck.
Space limits what I write here. The village exists in the real world and things cost what they cost. But to be clear, the equipment is old and the employee count is almost unchanged in 20 years. We can’t do much more without shutting down.
Cordially,
Doug Vatter
Trustee, Village of Cornwall on Hudson
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