The Village of Larchmont has received Moody’s highest bond rating. That was the good news at the Larchmont Village Board on Monday, April 26. Less happily, the board approved the 2010-2011 budget and discussed why water rates are due to increase by 18-20% this year.
Mayor Josh Mandell said he had a “bit of good news” to reveal: “For the first time in history the Village of Larchmont will have a AAA bond rating from Moody’s.” This was part of an overall reclassification for municipalities by Moody’s, and “hopefully down the road it will allow us to tap the bond market at a lower rate,” said the mayor.
For years, Larchmont has received a rating one notch below the top. Village Treasurer Denis Brucciani explained later that having a small population kept Larchmont from the top rank until Moody’s changed its criteria this year.
How much would the AAA rating save the Village when it goes out to bond? “It’s probably between 20-25 basis points cheaper to borrow,” said Mr. Brucciani, “At the level that we borrow, it’s really not a big savings.” He calculated, “If we were to borrow a million for a year at current rates, you’re talking $2500 in cost savings.”
“But you do get to puff out your chest – it’s more of a prestige thing,” said the treasurer. He gave credit for the AAA to hard work by his predecessor, Carmine DeLuca, “for leaving things in fiscally sound shape” and to the current and previous boards, treasury department staff and members of the budget committee.
New Fire Department Leadership
Before digging into the rest of the board’s relatively short agenda, Mayor Mandell administered oaths of office to five volunteer firefighters elected to leadership posts in fire department elections earlier in the month. Sam Orans, who was installed as second deputy chief in February, will now serve as first deputy chief. Adam Piscatello, Jason Head, Rob Seitz, and John Pomponio were installed as lieutenants.
The firefighters were filling positions that had been vacant for a number of years after many experienced volunteers left the department to protest the board’s appointment of a career firefighter as chief rather than a volunteer, as had been the custom. “It’s just now that we have a few guys qualified for these positions,” explained Mayor Mandell, who is also a volunteer firefighter.
Beginning May 1, Mr. Orans will share leadership of the overall department with Captain John Caparelli, a career firefighter who will continue responding to fire calls but also take on administrative duties. The board has opted not to replace Fire Chief Richard Heine when he retires on April 30th.
Not replacing the chief and leaving another firefighting position open are two cost saving measures in the 2010-2011 budget, which the board passed unanimously after a brief review.
Final Budget Passes
The final budget is unchanged from the preliminary version presented on April 5. It calls for a $15,507,096 appropriation and a tax rate increase of 2.83%. On a home assessed at $20,000, the Larchmont Village tax would be $5,977, up $165 from last year.
Mayor Mandell dissected the 2.83% tax increase, attributing the majority – 1.85 percentage points – to an increase in debt service of $213,000 (or about 40% over last year) which is primarily for the Flint Park project. The rest of the increase – slightly less than 1 point – was for all other budget items.
Looking from another direction, the mayor said the Village began the year with a $975,000 gap between expected revenue and projected spending, presuming no change in the tax levy, staffing patterns or contractual salary increases.
To close the gap, the board took $300,000 from surplus; reduced staffing from 17 to 15 in the fire department for a savings of $358,000; and increased the tax levy by $317,000.
In the future, the mayor said, Larchmont would either have to learn to live with higher taxes or figure a way to rein in payroll increases as dictated by its contracts with the employee unions. Another option is finding new revenue sources. Residents will be hearing more on these and other budget topics throughout the year, promised the mayor.
The board discussed additional reasons for the tax increase, such as the requirement to expend Village funds upfront for emergencies, like those created by the March nor’easter, and then wait for reimbursement from the Federal Emergency Management Agency (FEMA). At times, the Village has to borrow while it is waiting.
Water Rates Rising
The board then switched from taxes to water, outlining details for why water rates are likely to increase by 18-20% by October.
The cost of water has risen each year by about 11%. In addition, Larchmont has incurred a steep penalty in many months for exceeding its allowance. The result has been an approximate 20% increase in each of the last three years – yet residents have not seen a rate increase since 2007.
Trustee Marlene Kolbert reminded residents that we live in a region – and we share the burden of paying for a large water system, including, for example, sharing the costs for the construction of the water tunnel.
Ms. Kolbert also emphasized that conservation of water is a must. For example, residents should pay closer attention to automatic sprinklers which, at times, are activated even when it’s raining. On the bright side, Trustee McAndrews said there should be savings when a planned drive-by meter reading operation is in place.
Save the Date
Other board announcements included: the Chatsworth Carnival will take place on May 23rd and the Memorial Day Parade will kick off on May 27th. Also, boats can be launched at Glen Island and Playland, and May 17th is National Bike-to-Work week.