BATAVIA — The City Council is proposing a $29.9 million budget for next year, with about $3.36 million in cost increases, but a tax rate that would stay the same.
The total costs, as of Monday’s conference meeting, stood at $29,916,082,
About 5,700 properties in the city support the general fund, City Manager Rachael Tabelski said at the meeting, adding the property taxes they pay make up 34% of the budget. Typical tax bills estimated for 2023-24 are: $447 for a $50,000 home; $671 for a $75,000 property; $894 for a $100,000 home; $1,341 for a $150,000 property; and $1,788 for a property valued at $200,000. There was about $66 million in additional taxable assessed property last year, Batavia Development Corporation (BDC)-completed projects over the last few years have added over $10 million in value. Real property tax is the city’s most stable revenue source, she said. The proposed tax rate for 2023-24 is $8.94 per $1,000 of assessed property value, which would be the same as this year’s rate.
The Council will also vote Feb. 13 to introduce a resolution to override the state tax cap and schedule a public hearing for Feb. 27 on the local law.
“The rate is lower than the rate has been in the last decade. However, due to the tax cap formulation, the manager’s budget presented does exceed the tax cap limit,” Tabelski said. “The city is not immune to rapid inflation and high price increases. Supplies, materials, salt, gas, electric are rising between 15% and 40%. Diesel fuel is double. Employee wages are up. Retirement costs are up $300,000 alone and health care is up $475,000. Exceeding the tax cap will allow the city to raise an additional $460,000 to support these inflationary costs, while still keeping the tax rate the same as last year.”
Councilperson-At-Large Bob Bialkowski said, “There’s a lot of concerned citizens out there and I’ve assured them we’re not raising the tax rate this year. But also, I think we’re clear that we’re not going to raise assessments this year?”
Tabelski said there have been discussions about not doing a reassessment program this year.
“Whatever it takes — get it out to the public … A lot of people have suffered from inflation, loss of jobs, and everything else. They’re up to here with taxes right now,” Bialkowski said, raising his hand up to his face. “I understand that. We all do.”
Tabelski said that in 2017, the city committed to foster $100 million invested in economic development in five years. At the end of 2022, investment totaled over $202 million, she said.
“This is exciting for residents and local officials to see the growth and transformation of our city,” Tabelski said.
Currently, there is $16.6 million worth of public projects in progress and about $20 million in planned projects, including a new police station.
The city is seeing rising inflation at the state and national levels, along with rising wages and soaring interest rates, and an unprecedented focus on housing at the state and federal levels.
“There are open jobs in all industries — healthcare, nursing homes, group homes, ambulance, hospitality, retail, restaurant, construction and trades,” she said. “A workforce shortage exists right now. “Unemployment is at an all-time low in our region. For the city to maintain and keep workforce to operate police, fire and DPW (Department of Public Works) we need to continue to pay competitive wages and offer great benefits.”
In the proposed 2023-24 budget, revenue would be stable, but quickly rising expenses due to inflation. The city anticipates general fund revenue of $19.40 million for next year’s budget, up about $1.8 million from this year’s budget, but only a $640,000 increase under the amended budget with which it is currently working. The general fund tax levy is $6.6 million, sales tax at an estimated $7.3 million. Sales tax makes up 40% of budgeted revenue.
“Sales tax is projected to increase $525,000 this year to $7.3 million, the largest we’ve seen,” she said. “That can be attributed to Council’s ability to negotiate the sales tax agreement with the county.”
There is $450,000 in unassigned fund balance budgeted to be used. This means the city could suffer a loss in this year’s budget, Tabelski said.
“Unpredictable supply and material costs and one-time pay raises for police and non-union staff will also be covered by using unassigned fund balance, she said. “The unassigned fund balance received a large infusion of cash in ‘22-’23 when Alliance Energy paid off their back taxes, penalties and interest. Therefore, the budget presented makes use of a higher amount of unassigned fund balance than last year for one-time expenses this year.”
The budget relies on a transfer of about $275,000 in transfers from the water fund to the general fund — the same level as last year. General government costs are expected to be over $5 million in 2023-34, an increase over this year. Public Works costs were about $4 million this year and are expected to go slightly over that next year. Police expenses, at over $4 million this year, will go up again next year. Fire expenses, at about $4 million this year, will be closer to $5.5 million nest year. Administrative services, at a little over $1 million projected in 2023-24, is the only area that would decrease from last year.
“Expenses in all departments except administrative services have increased this year. In general government, increases include higher contributions to health care, increases in funding of reserves in preparation of bonding for the police station, increase in contingency funding and fully funding the BDC (Batavia Development Corporation) at $110,000 this year,” she said. “Administrative services expenses decreased as IT and insurance fees have been apportioned to other funds — water and sewer.”
Increases in city Police Department costs come from a part-time parking and recycling officer position being made full-time, an additional school resource officer position and an increase in the overtime and retirement costs. Fire Department cost increases are due partly to a firefighter added for January 2024.