Preliminary Larchmont Budget Hikes Tax Rate 11.6%; Board Still Whittling

by Judy Silberstein

(April 6, 2005) The first fact to know about Larchmont’s 2005-2006 budget is that taxes are certainly not going up 16.4%, as reported in the Journal News on March 29 and April 5. (See: Central Westchester village budgets at a glance.) Mayor Ken Bialo explained the process at the April 5 meeting of the Board of Trustees and Village Treasurer Denis Brucciani elucidated further the next day: like other municipal budgets, Larchmont’s annual document is presented in three phases. First comes the tentative budget, “ a raw document, a work in progress, that hasn’t been scrutinized or analyzed – just department head’s representation of their wish list,” said Mr. Brucciani. If all wishes were granted, the budget would indeed go up an extra $1.7 million for a total of $13.72 million and a tax rate increase of 16.4%; but that isn’t going to happen.

Already, after a series of budget work sessions, the board has made a first set of cuts and produced a “preliminary budget,” which was distributed at the April 5 board session at the opening of the first public hearing on the budget. That budget, if enacted, would raise taxes “only” 11.6%, but the board is meeting in work sessions again this week to continue efforts to scale back the increases.

[Editor's note: for a look at how local budgets and property tax rates have been increasing in the past five years, see the following chart. Property taxes support the lion's share of the total budgest for the town, village and schools.]

Total Budgets & Increases in the Tax Rate for 2001-2005

*preliminary budgets. These figures represent the total budget, including funds (such as the water fund) that are not supported by the tax levy.

How low can they go? Mayor Bialo indicated he’s hoping to get the tax increase down much lower - maybe even to 7% - by the time the board gets to the last phase, passage of a final budget by April 30. But that will be very difficult given what’s driving the increases.

Three major budget items are behind the escalating budget, accounting for more than half of the increase: salaries, debt service and pension payments. Salaries – for police, fire, public works, library, and Village Hall employees -- account for 44% of the total expenses. Salary increases, including those agreed to in the contentious negotiations with the police union this year, have led to an additional $400,000 in this year’s budget. Debt service, paying back loans borrowed for capital projects, is up $215,000, and pension payments are up around $280,000.

“No service cuts are contemplated at his time,” said Mayor Bialo. He added, “I’m not suggesting it’s beyond contemplation,” but he also said, “I’m not in favor of it” and “I haven’t heard a groundswell of support for it,” though he predicted the time may come in the next few years when residents start demanding lower taxes rather than more services.

He also indicated that the general view on the board this year is not to raise fees, though some raises are already reflected in the preliminary budget. And, he noted, the board has yet to decide on how to use the surplus accrued from previous fiscal years. Part of the surplus is important to keep as a "rainy day fund," but some amount may be used, at the board's discretion, to offset the budget increase. Mr. Brucciani said he was still working on estimates of how much surplus there will be when the final number is calculated on May 31.

So how is the board cutting the budget? So far, to get from a 16.4% tax increase to the 11.6% level, the board trimmed back $372,000 in expenses by electing to defer filling the vacancy for Village engineer, cutting back on contingency funds, and reducing repairs to some of the sanitation trucks. In addition, the board elected not to take out a New York State loan, as they had planned, to pay the pension bill for 2005. The pension bill will be paid from the 2004-2005 budget, leaving less in surplus but reducing debt payments in 2005-2006.

What revenues were raised – so far: The board also decided to raise some fees, though none substantially, for a total of $65,000.

Public Response -? Monday night was the first opportunity for citizens to weigh in as the board opened the public hearing and made available copies of the preliminary budget. But there was only one resident in the audience, Mike McClintock, and he deferred making any comments. “Once I found out [the reported 16.4% tax rate increase] was preliminary, it made more sense to wait and find out more,” he said. Additional copies of the preliminary budget may be picked up at Village Hall.

It’s quite telling that we do not have a packed house tonight,” said Trustee Marlene Kolbert, especially after the release of the tentative budget estimate of 16.4% - a number “which just blew us out of the water,” she said.

Trustee Mike Wiener expressed his concern with the impact of escalating taxes on young families, retirees, public employees (police, teachers, and firefighters, and those at Village Hall and the Department of Public Works) who can’t afford to live in the community. He said, “People who live far away can’t come here when we need them in an emergency,” such as snow storms, floods or fires.

Trustee Anne McAndrews, who is in charge of reviewing Larchmont’s bills, raised the possibility of finding additional savings in how the village handles its fleet of vehicles. “I’m not looking for a stingy budget – I’m looking for an efficient budget,” she said.

Mayor Bialo offered a note of caution at the end of his “forward look.” “The pressure of suburban living is changing the face of our area.” Observing that other municipalities are turning to new, large-scale development to bring in revenues and offset demands for more services, he said, “I’m worried that that could happen here as well.” In particular, he mentioned the six-floor, 159-unit apartment building being considered for the Town of Mamaroneck (See: Town Board Completes Environmental Review - 159 Rental Apartments To Come? ) and a separate 59-unit development proposed for Palmer Avenue in Larchmont. (See: 2 New Apartment Buildings & A Bank Proposed for Larchmont.) He also voiced concern that the rash of new development would eventually require an extremely expensive upgrade to the sewage treatment facility in New Rochelle.

Trustee Liz Feld was not concerned about the possibility of new apartments in Larchmont, which she considered “not remotely on the same scale as New Rochelle or White Plains,” but she conceded that it was a “very tricky balance” between the potential advantages and threats of new development. She also suggested that now may be the time to reconsider some larger issues – such as property revaluation, raising user fees, and consolidation of services with nearby municipalities to save money.