$36 Million Budget Proposed in Peekskill

The average Peekskill homeowner would pay $70-$90 more in city taxes under a $36 million draft budget for 2012 proposed by City Manager Rick Finn at Monday night’s meeting. The budget would raise taxes by 3.4 percent, or $1.4 million.

The bulk of the increase is due to rising pension and health care costs that are estimated to cost the city $1.3 million. The city’s debt service would also increase by $640,000, for a total of $3.1 million for 2012.

With an expected revenue increase of $550,000, at the start of the budget process the city was facing a $1.3 million shortfall for 2012.

“This budget is the third fiscal year budget that I have presented to the Council, and it has been the most challenging budget that my staff and I have worked on,” Finn told the Council.

The city will hold a public hearing on the proposed budget Tuesday, Oct. 11. The City Council will either make changes or accept the proposal by its Dec. 1 deadline.

The proposed budget would raise taxes 1.4 percent above the 2 percent state’s required tax cap but, because certain pension costs are excluded from the cap requirement, the 3.4 percent tax increase is legal and the state considers it to be within the 2 percent limit.

“We felt we had to go up above the 2 percent cap this year because next year will be an equally tough budget,” Finn told the council. “We know many people in the community are having a very difficult time (so we kept the other cost percentages small).”

There would be no major service cuts and no departments where regular services will be disrupted, said City Comptroller Charlie Emberger. The city would continue its wage freeze for all employees. No jobs would be cut, but the hiring freeze would continue as well.

Five city positions currently vacant through attrition and retirement would remain vacant: four Police Department positions (one lieutenant, two officers and one community service officer) and one Department of Public Works position. The total cost savings in freezing these positions for 2012 would be $566,000.

The two highest estimated departmental budget increases for 2012 are proposed for “law,” to pay labor lawyers and other outside attorneys, which would increase by 35 percent ($165,000); and “contingencies,” money used for arbitrations or possible liabilities, which would increase by 10 percent ($207,020).

The budget proposes to take $1.5 million out of the city’s fund balance (reserve fund), which would still leave the reserve with $8.8 million.

The City Manager told the council that the city is “doing extremely well” with its reserve fund, which they have not drawn from in the last two years, compared to other local governments.

The proposed budget provides funds to pay for the arbitration decision on the city's contract with the Police Benevolent Association, which is expected to be announced any day. The decision will be retroactive to 2009, which is when the PBA's contract with the city expired.

The Peekskill Firefighters Association Local 2343’s contract with the city expired in 2010 and the two groups are still in negotiation. The blue and white collar workers, represented by the Teamsters, will come to the end of their contract with the city this year.

There will be a public hearing on the City Manager’s proposed budget on Oct. 11 at the Common Council meeting. The Council will then review and hold another public hearing. They will make a final vote by Dec. 1.

Read the draft of the proposed budget for 2010 by downloading it from the PDF attached to this article or from the city’s website.

Editors Note: All figures were rounded up from above 5 and down from below 5.