tax cap override

In a seemingly predictable move, given City Council’s talks of late, the group voted Monday to adopt a law to override the tax cap limit and to approve the $33.5 million operational budget.

Both votes were six to two, with council members John Canale, Rich Richmond, Eugene Jankowski Jr., Paul Viele, Al McGinnis and Kathy Briggs giving a yes and Bob Bialkowski and Tammy Schmidt a no.

“Just as I’ve said in the past, I’m opposed to this, I think it can be avoided,” Bialkowski said. “The county is giving us $392,000 additional sales tax revenues. I’ve had contact from many taxpayers and voters, and they’re very upset with this. So that’s my position and opinion.”

Likewise, Schmidt isn’t in favor of the budget and override and has previously mentioned that she’s voting for her constituents.

“I’ve had many voters asking me to vote no, and I am going to do so,” she said Monday, questioning some budget logic. “So we don't want to use the county money because it's one-time money. But we did use the one-time, Alliance money for raises. So next year, I don't know how we're going to cover those raises. But we're using one-time money for raises but won't use one-time money for the tax cap override. So that's just my comment.”

Jankowski emphasized that the tax rate was lowered last year, and overall, he feels that the city has been doing a good fiscal job.

"We're not using $110,000 out of retirement reserves, which we were kind of forced to do the last two years, we've broken away from that. We're not using VLT money to supplement the budget because we got burned one time. And it was hard not to do during COVID. We were struggling with everyone else. But we were able to get off of that. So that's a huge step in the right direction,” Jankowski said. “We've lowered our debt service by 9%, which has put us in good financial condition to bond the new police station, the LED streetlight conversion, the ice rink chiller, the Zamboni and three upcoming major water and sewer infrastructure improvements,” he said. “So I think we're on the right track to provide the services that people expect in the public safety and things like that. Even though, at this point, we're still taking $454,000 out of the fund balance to kind of cover the budget this year.

“So I think we're doing pretty good, I'm really happy with it. All the people I talked to understand the situation we're in to give us their full support. And I have had one or two people that have concerns, and after talking to them, they understand where we're at,” he said. “So I just wanted to make that clear because, you know, there's some negativity here. I'm not happy about this tax cap, either. But I think under the circumstances, what we're achieving here, and how we're doing it, I think is the proper way to go.”

Viele agreed with Jankowski, and Briggs said that she’s had a few phone calls, but “once I explained it, they were fine,” she said.

The tax cap override means that the city will be able to collect a $6.6 million tax levy for the $19.4 million general budget. City taxpayers won’t see an increased tax rate, as that will remain flat at $8.94 per $1,000 assessed value.

Council was unanimous in its vote to approve the 30-cent water rate increase, which, along with an increased water meter rate and capital improvement fees, will tack on about $60 more for an average home of four people.

An apparent unexpected discussion came up just before City Council’s vote Monday evening to move a proposed tax cap override to a business meeting for final approval to create the required local law.

Council members Bob Bialkowski and Tammy Schmidt each said they would not vote to move the tax cap override for a final vote on March 13, but neither offered amendments to the proposed $33.5 million 2023-24 budget.

Both council members said they had constituents who were not happy about the budget and override, and they, therefore, were not going to vote for it.

“I've heard from many, many constituents that have serious concerns over this. So I don't support it,” Bialkowski said during the group’s conference meeting at City Hall. “But if we run short, we'll have to learn to live with it, just like the average homeowner does. You know, people are really concerned about their taxes.”

Schmidt added that the people she represents are not in favor of the budget, and maybe it’s time to give a little.

“I’m not in favor of it either. My constituents are not in favor of it. And I can't vote yes on something that the people and the citizens of the city don't want, because I feel like I work for them,” she said.

None of those constituents, nor anyone else, showed up to speak during the three public hearings regarding the budget, tax cap override and water rate increase.

City Manager Rachael Tabelski has recommended the override as a way to make budgetary ends meet this year by collecting more than the 2 percent property tax levy of $6.6 million. If council does not approve the override, it will have to cut more than $456,000 from the budget, Tabelski said.

Council President Eugene Jankowski Jr. wondered aloud why, if these two had issues, they did not bring them up during two prior budget workshops. There was also a third one tentatively scheduled, and no one said they wanted or needed it at the time, he said.

“If you had complaints from citizens … Why weren’t any amendments made or attempts to me to address those concerns during the budget process? I mean, we had a month to do this, and if somebody notified me, as a representative, I would have come to the group and said, I have people concerned about this specific part of the budget. And they don't like this part. Is there any way we can reduce that? Or what would it cost to reduce it, there was plenty of time to ask and have those questions answered,” Jankowski said. “As I understand it, from my research, if we were to make the tax cap … we'd be taking money out of necessary savings accounts to cover the costs.”

Schmidt said she only more recently became aware of the county’s revenue distributions, including $392,000 for the city. Why can’t the city put those funds toward the shortfall, she said.

Tabelski explained that auditor recommendations are to keep a fund balance of 15 to 25 percent, and she is not leaning towards pulling any of that out to pay this next year’s bills. As for using the county’s unanticipated revenues, it’s not good practice to use a one-time amount just to meet the tax cap, she said, because then what happens next year?

“We’ll find ourselves right back here,” she said.

The city has gone through lean times, Jankowski said, especially during the pandemic and related drops in revenue. And now is not the time to pick the bones.

“And I'm not happy with inflation, I'm not happy with everything that is going crazy and the costs. And I get a chance to meet with a lot of the department heads. I do this every year. And it's about as lean as I believe we can get it and still provide the public safety and the services people expect for living in this community,” he said. “I think we have a balanced budget, that is a balance between necessary public safety and services that people are accustomed to, as well as trying to keep it as reasonable as possible.”

Councilman John Canale hates to use COVID as an excuse, and it isn’t one, he said, but rather, is a calendar marker. Those were very uncertain financial times that shifted council’s perspective, he said.

“And if I remember, right, we as a board, although Tammy wasn't here at the time, I do think we as a board decided, you know what, we just have to react to the environment as it happens to us," Canale said. "So we're going to do it on a year-to-year basis. Yes, we have to look down the road as we always have, that we need to survive on a year-to-year basis right now.

"It's just like many municipalities are in the same position that we're in. If I remember it, we all kind of casually agreed that, yeah, we'll just take this thing a year at a time until we started to get out of it. You know, get into the clearing a little bit. Well, we're not even clear,” he added.  “We are all very opposed, I think, to overriding the tax cap. I certainly don't want to have to do it. When it means that we can still continue to provide all the services like you say — that we have grown accustomed to having provided for us as taxpayers — and our only choice is either to drain funds that we shouldn't really be draining that we've worked so hard to build up or override the tax cap, which is nothing that any one of us put into place. That's our state that has required that of us. This is one of those years where we're still not in the clearing yet. I think that was the only decision. That was a viable decision.

“I feel pretty proud to say we’ve maintained the tax rate,” he said.

To the contrary, Schmidt doesn’t feel proud of the status quo, she said, not when other municipalities have lowered their tax rates. The city property tax rate is $8.94 per $1,000 assessed value, and that’s to remain the same.

“Can we ever just throw a bone to the citizens?” she said. “They are on the top of the organizational chart; we work for them.”

Council voted 6 to 2 in favor of moving the budget and override to the March 13 business meeting for a final vote. Members Kathy Briggs, Al McGinnis, Rich Richmond, Paul Viele, Canale, and Jankowski voted yes to no votes cast by Bialkowski and Schmidt. All members agreed to move the proposed water rate increase of 30 cents per 1,000 gallons to the same meeting for a vote.

File Photos of Bob Bialkowski, Eugene Jankowski Jr., John Canale and Tammy Schmidt, by Howard Owens.

More than a month ago Batavia City Council was given a $33.5 million budget proposal that included a $6.6 million tax levy, a required tax cap override and built-in budget sessions to see where cuts could potentially be made.

Five weeks later, the group voted to put the same 2023-24 budget and tax cap override on the calendar for public hearings that begin at 7 p.m. on Feb. 27 in Council Chambers at City Hall. Throughout the budget workshops, no council member suggested amendments to make cuts to the proposed $33.5 million financial plan.

One public hearing will be to establish a local law authorizing the city to override the state-mandated tax cap to collect more than the set limit of real property taxes. This law would need a vote of at least 60 percent of City Council to pass. It would then take effect immediately upon filing with the secretary of state.

The second public hearing is more directly related to the budget, naming the amount to be levied of $6.6 million. If passed by council, it will take effect on April 1.

As City Manager Rachael Tabelski explained in January, the tax cap is an “arbitrary formula given out by the state.” And with expanded roles of a full-time recycling officer and full-time ordinance officer, increased health care, retirement, utility, and other costs she believes are essentials, it was either overriding that tax cap or making “significant” cuts, she said.

“I would say this is this year's request,” she said. “The city would do everything in its power to maintain under the tax cap in the future.”

City Council, in its unanimous vote, agreed. Members Bob Bialkowski, John Canale, Eugene Jankowski Jr., Paul Viele, Al McGinnis, Kathy Briggs, and Tammy Schmidt have also agreed to a cumulative 8 percent raise over three years in a negotiated contract with the city police, though Bialkowski has raised a couple of questions about salaries and an extra day off. 

This next year's budget also includes a water and meter rate increase of 30 cents more per 1,000 gallons. That increase is to begin April 1, and will tack on about $60 more per year to the bill of an average family of four, Tabelski said.

The property tax rate would remain flat at $8.94 per $1,000 assessed value, although most assessments were raised over the past two years in the city, for an overall higher tax bill. For example, if a home is assessed at $90,000, and it is now assessed at $100,000, the flat tax rate times the higher assessment will cost the homeowner an additional $89.40 per year.

Citing reasons of double diesel fuel costs and rising supply, health care, retirement and employee wage expenses, City Manager Rachael Tabelski is calling for a move to exceed the state-regulated tax cap -- which would be the second override in three years for the city -- during this budget season.

“The 8 percent inflation the economy is facing challenges this budget, forcing the city to consider overriding the tax cap,” Tabelski said in a memo to City Council. “To balance the fiscal year 23/24 City of Batavia budget I recommend that the City Council of the City of Batavia consider overriding the tax cap.

“According to New York State’s property tax cap legislation, if a city government decides to adopt a budget with a property tax levy that exceeds the level set by the state, the city government must pass a local law to override that cap,” Tabelski said.

Tabelski is to provide a budget presentation and Council is expected to review and discuss her recommendations during its conference session next week. The session is set for 7 p.m. Monday in the Council Board Room at City Hall.

The proposed levy of $6.6 million would help to cover costs of a total $33.5 million budget and $19.4 general fund budget that includes a flat tax rate of $8.94 per $1,000 assessed value, a flat sewer rate, and a water rate increase of 30-cents, Tabelski said. The levy is raised from all real properties subject to taxation by the city based on the assessment roll for the fiscal year 2023-24.

She has also recommended a required public hearing to be set for Feb. 27.

Materials including salt, gas and electric are on the rise between 15 and 40 percent, while employee wages are at $400,000; retirements at $300,000; and health care just under half a million dollars, she said. Those are some of the rising costs imposing the need to ask for an override — unfortunately, not an unprecedented ask in city history.

Batavia City Council members voted to override the state’s 2 percent property tax cap just two years ago, passing a 7.5 percent property tax increase as part of the City’s 2020-21 budget. Part of the blame went to then Gov. Andrew Cuomo for withholding some of the video lottery terminal money from Batavia Downs revenues, though this year a similar portion was earmarked for the police department’s request for guns and equipment.

Other sections of the budget are up for discussion during future work sessions slated each for 6 p.m. on Jan. 31 for Public Works, general government and administrative departments; Feb. 7 for police and fire departments; and Feb. 9 for an as-needed session.

There is time allotted for public comments during this meeting. Speakers need to sign up prior to the start of the meeting.

File Photo of City Manager Rachael Tabelski by Howard Owens.