A draft report prepared by Bedford's comptroller predicts that the town will face a dire fiscal picture over the next five years, including rising expenses and mounting budget deficits.
Town Comptroller Edward Ritter, who presented the data to the town board at its Aug. 20 work session, explained that the purpose of the report is to look at deficits that could be coming up. For the findings, Ritter took data from the actual expenditures of 2009-12 and the budgeted amounts for 2013 to calculate averages for important figures, which form the basis of projections that he made out to 2018 for revenues and expenditures for each of the town's funds, as well as for its tax situation.
Ritter's findings show that the town is facing a gap of $692,082 for 2014, which is the next budget cycle, a figure that could balloon to more than $2.6 million by 2018. The forecast also shows the town running out of unrestricted fund balance, which is reserve funding that can be used to mitigate tax levy hikes, by 2016 for the general fund alone and by 2018 for the overall budget.
The report also assumes that the tax levy, which is the total amount of tax revenue to be collected, will rise by two percent for each coming year, which would keep it around the state-mandated cap that limits growth to the less of two percent or inflation. Ritter explained that for this coming year, the cap is slated to be 1.66 percent because of a lower inflation rate. However, because of an exemption that takes into account growth of the tax base, the actual amount is expected to be 2.01 percent.
Meanwhile, employee benefits are expected to be a major cost driver, forecasted to rise from $5,725,052 in 2013 to more than $8 million by 2018, assuming an annual increase of nine percent.
Benefits include health insurance and state-required employee pension contributions. In the case of pensions, Ritter told the board that a bad performing year from a 5-year cycle - the benefits are tied to market performance - will fall off, which is beneficial. However, he warned that there is uncertainty over healthcare reform, which is related to the insurance aspect.
Ritter told Patch that for the coming fiscal year he is assuming a 9-percent rise in health insurance, and while the town's insurer thinks the increase could only be around 4.5 to five percent, he cautioned that it is “not anywhere near a final number.” Numbers of pension fund contributions were not available from the state as of the Tuesday meeting, Ritter explained.
Meanwhile, one part of good news in the analysis is mortgage tax revenue, which is improving. Ritter projects the number to rise from $850,000 in 2013 to $994,288 by 2018.
Ritter also assumes that the continuation of annual reductions in total assessed property value will continue, going down by a rate of five percent annually. The drop in assessed value puts financial pressure on municipalities and school districts because it results in a higher tax rate, or what people owe per $1,000 of assessed value, to get the same amount of revenue.
Acknowledging the dire picture, Ritter told the board that he's “not trying to be gloom and doom but unfortunately some of this is.”
The analysis prompted board members to discuss the bigger picture for the town, a theme that muncipalities and school districts in the area have dealt with in recent years amid rising mandated costs and a weak economy.
The outlook may mean tough choices in the future, according to one board member.
Deputy Supervisor Peter Chryssos suggested that the town may find itself, down the road, having to tell the state that the town won't comply with the tax cap anymore - legally, the board can override it if four out of five members choose to do so - or having to acknowledge cutting a service because it can no longer be afforded.
“One way or another we're going to be making somebody angry or sad or whatever,” he said, adding that he would rather push back against the politicians in Albany.
Chryssos also felt that Bedford needs to take a leadership role on mandates, comparing the situation to climate change, and believes that there needs to be structural change for the town.
While detailed budget reviews will not be done publicly until the fall, Ritter outlined some possible measures to consider. They include job sharing, reviewing the possibility of outsourcing and looking at fees. The comptroller did not rule out attrition, which has been done multiple times before, but cautioned that too much of it in one area has to be avoided.
When board members discussed tackling major fiscal items, Supervisor Lee Roberts felt that job sharing is something the board has more control over.
“So, we have to be the captains of our own fate here," she said.
On the issue of mandates, the supervisor also noted that unless voters go to the polls and vote out politicians who support the mandates, then it's “never going to change.”
Councilman Chris Budrick agreed with having structural change and expressed interest in job sharing. He also felt that they will need cooperation from department heads and employee unions.
Councilman Francis Corcoran called the report a “good draft working document.” He also said that it is a "tool" to help guide thinking, and that it shows that needs to be tweaked.
There will be another budgetary update town board will have a work session on Saturday, Sept. 28, at 9 a.m. at the annex building at 425 Cherry St. in Bedford Hills. Town department heads will visit the meeting and present their specific budgets and their ideas for what to do next, Ritter told the board.
“I'll try to have better news next time,” he said towards the end of the discussion.