The 2013 tentative property tax increase for the City of Cortland is 2%. With over $3,174,577 in all reserve funds, can the city spare about $160,000 from reserves, or use a combination of reserves and additional spending cuts to prevent the tentative 2013 tax increase?
The city has $1,659,340 in the Budgeted Operation Expenditures Fund. The target for this reserve is set at 17%, and it is about 8% funded now. There are several other reserve funds associated with the general operating budget. The state comptroller recommends 10% for contingency. No appropriations are assigned to the 2013 tentative operating budget contingency line 1990.400, and Finance Director Cook has not explained to the public why this line remains unfunded. If it has something to do with the new Stabilization Reserve Fund, the public remains uninformed. Earlier this year the city created the Budget Operation Expenditures Fund and several other funds by reassigning assets that were held in the old reserve fund. (See Minutes of Common Council meetings.) Once established, these funds have tight rules governing withdrawals.
Operating budget reserves totaled about $2.6 million at the start of 2012, or 14% of this year's operating budget. Additional reserves from 2011 were carried over to 2012 in the city's water and sewer funds. The city's bond rating improved.
The city currently has $257,739 in a Stabilization Reserve Fund.
Why keep two reserves of similar use to stabilize the budget? (The establishment of these funds is recommended but not mandated by the state comptroller.) This question has significance in light of the tentative 2% tax increase. It also demonstrates that we have a group of old and young squirrels with hearty appetites in control of the City of Cortland budget. You will hear them chatter: (1) we never have enough and we intend to get more; (2) we can't predict the weather; (3) we can exaggerate the situation for prudent and necessary purposes, and purposes may include more spending, id est, city parking garage.
By the end of this year, the city expects to receive at least $120,000 of sales tax revenue in excess of the 2012 budgeted amount. The number could reach $160,000. The excess will be rolled over and applied to reserves. There is also a 2013 appropriation of $178,000 to transfer to H. I. reserves. Some lines in the budget may have been overbudgeted in 2013 to increase reserves.
The city joined the Tompkins County health insurance consortium and "saved" an advertised $1 million in 2013. Yet the 2013 budget reflects a saving of $306,607 compared to 2012. If the city "saved" $1 million, how does it explain the unaccounted $693,393?
From 2001-2010 the average yearly property tax increase in the City of Cortland was 8.5%. The brake was applied during the administration of former Mayor Feiszli. This is not the time to take the foot off the brake, or to allow squirrels in city government to keep all the nuts they collect. A 1% property tax increase is roughly $80,000 of revenue.
The Cortland Contrarian recommends use of available reserve money by the City of Cortland to prevent an untimely and unnecessary property tax increase. Common Council should also find more places to cut non-mandated spending.
City Budget 2013
Adopted City Budget 2012
December 4, 2012 update: The 2013 adopted General Fund budget appropriates $18,395,173, which is an increase of $191,713 over the adopted and posted 2012 budget. Appropriations were added to the 2012 budget during the year by the current administration. A few cents were reduced from the property tax levy in 2012 by the prior administration. About 18 cents per thousand will be added to the property tax levy in 2013, which is a 1.2% increase. Additionally, water and sewer rates are scheduled to increase about 3% in 2013.
The Cortland Contrarian was informed that, contrary to the established procedure of 2010 and 2011, the City Finance Advisory Committee was not asked to participate in 2013 budget meetings and workshops.
December 18, 2012 update:
Common Council voted 8-0 to adopt a $18,370,33 General Fund budget for 2013, an increase of $167,000 over the adopted budget for 2012. The property tax levy will increase from $15.20 per thousand to $15.33 per thousand in 2013.
When sewer and water budgets are added, the total adopted budget for 2013 stands at $24.1 million.
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