Taxpayers in the City of Newburgh got a steady diet of bad news Monday night as City Manager Rick Herbek unveiled his tentative 2013 city budget. First of all, taxes are going up (did you expect something different?)

Secondly, the value of your property has nose-dived 10.67 percent for Homestead taxpayers and 1.29 percent for Non-Homestead.

As a result, the tentative Homestead rate will be $17.62 per $1,000 of assessed valuation, compared to $15.63 in 2012. The Non-Homestead rate will be $22.83 per $1,000 of assessed valuation.

According to the city manager, the actual Homestead tax increase, after figuring in the loss in value, comes to 2.04 percent. The non-Homestead increase, after figuring in lost property value is 1.92 percent.

Herbek announced that there are a number of mandated increases in the 2013 budget. Health insurance costs are going up by $580,128 or 9.24 percent. The employees retirement system costs are increasing by $124,555 or 2 percent. And police and fire retirement costs are increasing $380,563 or 3.1 percent. Mandated contract increases are $287,868.

The total of these four items is a $1,373,114 increase.

Subject to a review by the State Office of the Comptroller (OSC), the permitted increase in the property tax levy is $529,980 or 2.76 percent. This increases the tax levy from $19,179,197 in 2012 to $19,709,177 in 2013.

The tentative 2013 budget calls for expected expenditures of $42,019,202, up from $40,900,545 in 2012 – 2.73 percent.

In order to make up for the red ink mentioned above, the city manager is recommending a 10 percent increase in all fees such as water and sanitation.

“Unfortunately, previous city councils did not act in a timely manner and waited until the enterprise funds reached negative balances before addressing rate increases,” Herbek said. “Although water and sewer funds had increases in fund balances for the 2011 fiscal year, we need to plan for emergency system failures that can quickly lower fund balances,” he said.

“Taking this all into considerations, we are recommending a 10 percent increase in fees which will balance the 2013 budget and assure the necessary fund balances needed to continue being able to upgrade our water and sewer facilities and infrastructure.”

Herbek also said a 10 percent increase is needed in sanitation fees.

“We do not foresee a fund balance by the end of the 2012 fiscal year,” Herbek said. “A 10 percent increase in sanitation rates will balance the 2013 budget and hopefully provide a sufficient fund balance at the end of fiscal year 2013,” he said.

Herbek is also recommending the city authorize a bond anticipation note to fund necessary purchases of vehicles and equipment during the 2013 fiscal year.

The city manager complains that a 36 percent reduction in city staff is wearing on his staff. The city is down to 206 full-time positions from a high of 320 in the 2009 budget.

The city continues to negotiate contracts with the various unions. It has contracts with the PBA through Dec. 31, 2012 and with Local 589 of the International Association of Firefighters through Dec. 31, 2014. An agreement with the Police Superior Officers Association (sergeants and lieutenants) ended on Dec. 31, 2008 and needs to be renegotiated.

The Civil Service Employees Association contract ended on Dec. 31, 2010 and although negotiations last year resulted in a signed memorandum of agreement, the membership declined to exercise it.

Herbek said the city really needs another major revenue stream.

“We have talked about a payroll tax or income tax but the prospects of obtaining approval from the state legislature are highly unlikely. Only the cities of New York and Yonkers have such a tax.”

Herbek said it is “really unfair to our taxpayers that thousands of people come to work in the city and benefit from city services but do not contribute in any financial way toward the cost of these services.”

The city manager said city council budget sessions are planned for Sept. 12, 19 and 27 and a preliminary budget is scheduled for approval by Oct. 9. The public hearing on the budget is scheduled for Nov. 13 and a city council work session is planned for Nov. 15 to address state comptroller’s office recommendations.

The final budget is due no later than Nov. 26.

By ALLAN GAUL
agaul@tcnewspapers.com