Siegel Anticipates Increasing Medical and Pension Costs, Increase in Hourly Rate of Outside Contractors

This is the first of the five budget commentaries issued by Yorktown Supervisor Susan Siegel. She anticipating rising costs and potentially deep spending cuts to avoid a tax rate increase in her upcoming budget proposal.

This commentary is called "Budget Dilemmas, Part 1 — Costs beyond our control."

Summer is barely over but I have already started work on the 2011 town budget – certainly one of the most daunting tasks for any town supervisor.

Should we cut services and decrease staff to lower taxes? Should we borrow money to pay for infrastructure repairs that have reached a critical point after years of neglect? What gets fixed first when you can't afford to do it all – a leaky roof? A bridge ready to collapse? Or tennis courts too dangerous to play on?

Of course, I'm not the first supervisor to deal with such issues, and certainly many of these issues are the same from year to year. But that doesn't make any of the decisions ahead any easier.

This is the first of a series of articles in which I plan to explain budgets and taxes, and hopefully include many of you in the process by encouraging your input. I have posted a brief questionnaire on the town website (www.yorktownny.org) asking about what's most important to you. If you don't have internet access, copies are available in my office at Town Hall. Please speak up, join the process, and tell me your priorities.

Your Tax Bill

When residents complain about their taxes, invariably they call Town Hall – after all, that's where the bill comes from and where the check is sent. But most people are surprised to learn how little of that money actually goes to the town – only 17 percent- 20 percent of the total.

Seventy percent of local taxes go to your school district (which residents vote for every year), and the remaining 10 percent - 13 percent go to Westchester County. The town does not control these taxes, it merely collects them.

Costs Beyond our Control

Some costs that the town is obligated to pay are beyond our control, such as pensions and medical benefits. And while it's no surprise to anyone that these costs go up every year, the amount that they go up can be shocking.

We have just recently learned that our state pension costs will increase $520,000 for 2011, and medical benefits will increase $300,000 despite the fact that Yorktown employees already pay 25 percent of the cost of their medical benefits – much more than most Westchester municipalities.

Even if all other costs stay the same, these increases that are beyond our control equate to a 4.8 percent increase in town taxes for 2011.

Prevailing Wage

Another cost increase the town has no control over is the hourly rate we are required to pay outside contractors who work on town property. New York State mandates that municipalities must pay "prevailing wage" for such services regardless of whether the contractor is union or non-union.

For instance, in 2009, the winning bid for an electrician to do work on town property was $60/hour for the electrician and $35/hour for a helper. (Jobs always required a minimum of two people). Due to the State mandate, when we went out to bid for the same work in 2010, the lowest bid was $93.50/hour for the electrician -- and there was no "helper" category so we are now paying $93.50/hour each for two people -- twice the amount we paid in 2009. Not only does this result in an extreme financial hardship for the town, it also negates the town's ability to seek out qualified contractors willing to accept lower rates.

So these are some of the rising costs we must deal with that are beyond our control. Future articles in this series will focus on revenue sources and budget expenses by category, infrastructure needs and capital improvements, competing budget demands and priorities, and finally my proposals for the 2011 budget.