Larchmont's Tentative Budget Up 3.9%

Tax Rate Would Rise 8.9%, But Cuts Are Anticipated

by Judy Silberstein

(March 28, 2006) The Village of Larchmont’s tentative budget, unveiled last week, shows the general fund going from $13,241,278 to $13,762,341 for 2006-2007. That translates into a budget increase of $521,063 or 3.9% and a tax rate increase of 8.9%.

However, “these numbers come from a raw document and represent the department head’s wish list,” cautioned Denis Brucciani, Larchmont’s treasurer. “The board has yet to start its process of evaluating the revenue and expense items,” which typically leads to a trimmed down figure. Last year's tentative budget had a 16.4% tax hike that was eventually pared back to 7.71% (See: Final Larchmont Budget Passes 4-1 With 7.7% Tax Rate Hike) For starters, Mr. Brucciani noted, the tax rate increase would fall to 6.38% if “we appropriate $250K from the surplus, in a manner consistent to last year's adopted budget.”

What’s driving budget increases this year? “Health care costs are continuing to go up approximately 10% per annum; salaries are going up in a range of 3.5 to 3.75% per year – those are the main items. Energy costs are on the rise, as well,” said Mr. Brucciani. “There’s really no one item you can point to – it’s all the contributing factors,” he said.

Pension costs, which have been the big budget boosters in recent years, are starting to be less of a factor. Larchmont is facing a relatively big bill this year - pension costs for 2006-07 are going up from $649K to $863K . However, this year's increase is small compared to 2003-04, when a drop in the stock market hit NY State’s pension funds.

Local governments, whose pension costs had shrunk to negligible levels during the bull market years, suddenly had to grapple with huge increases – both in percentage rates and in actual dollars. Larchmont’s pension bill went from $21K in 2002-03, to $238K in 2003-04 and $837K in 2004-05. Last year, 2005-06, was an anomaly, with a dip to $649K, because of the pending nature of the police contract negotiation. “Retroactive pay had not yet been recognized,” explained Mr. Brucciani. That pay will be accounted for now in the 2006-07 budget, hence the big increase, he said. He expects next year’s bill to be less than this year's.

Deciding how to amend the tentative budget will be among the first tasks undertaken by the newly constituted Village Board, meeting for the first time on April 3 under the leadership of former Deputy Mayor and now Mayor Liz Feld. Marlene Kolbert will be returning for her third term as trustee and Jim Millstein will begin his first. Missing from the board’s budget deliberations, for the first time in 15 years, will be Ken Bialo, who lost his bid to be re-elected as mayor last week. (See:Feld-Kolbert-Millstein Coalition Sweeps Village Election )

Mayor Bialo Weighs in On One Last Budget

The outgoing mayor offered his views on the upcoming budget at an unusual “mayor’s meeting” held on Monday, March 27. Trustee Michael Wiener was the only other member of the board in attendance, and the budget discussion was the only item on the agenda.

An unexpected addition to the agenda – and, for the mayor, a pleasant surprise – was the presentation of a flag from Chief of Police Steve Rubeo and a salute from the four police officers hired during Mr. Bialo’s four years as mayor (from l-r: Officers Jeffrey Krahe, Michael Nuzzo, Giovanni Formaro, and Dominick Pizzo; Chief Rubeo and Mayor Bialo). The flag has flown over Village Hall over the past four years; the chief admitted to stealing it, but asked for amnesty. “Thanks for your service,” he told the mayor; those words were also on the case into which the flag was folded (see photo below).

After explaining that his budget approach had always been to “include what is necessary to deliver services and leave out what isn’t,” Mayor Bialo went through the budget listing items – both big and small – that he believed could be trimmed from the expense side. He then enumerated items on the revenue side which he felt were overly conservative estimates of what the Village is likely to earn in light of this year’s experience so far. For starters, he recommended applying $250K from the surplus, the same amount used last year. “Historically, we make it back,” he said.

His recommendations included, on the small end, budgeting $2K rather than $5K for court interpreters. On the larger range, he advised trimming allocations for police overtime from $125K to $100K and suggested that the hiring of two new police officers should reduce the need for other officers to work overtime. For revenue, he thought the Village would get more than the tentative budget anticipated in a number of categories, including $5K more in gross receipts, $40K more in sales tax, and $25K more in interest.

By cutting a total of $137K in expenses and making adjustments of $465K from the surplus and revenue side, the tax increase could be kept to 2.78%, said Mayor Bialo. However, he concluded, “The next board will be ultimately responsible for the budget and the tax rate.”

Trustee Mike Wiener called the mayor’s analysis “a good presentation of the tentative budget,” and told him, “I plan to carry your plans and ideas forward.” However, he added, “I think there are even other lines that need to be addressed.”

Next Steps for Ken Bialo

Asked what he had planned for future Monday nights, the outgoing mayor replied: “Monday night football, fooling around with my kids and maybe some political involvement.” What kind of political involvement? He said he didn’t know at this point, “The right doors haven’t opened yet.”