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Peekskill Explores Solutions To Coming Budget Woes

PEEKSKILL – The city is looking at a budget deficit in the near future and must find ways to compensate for it.

That was City Manager Rick Finn’s message to the Common Council at a special budget meeting held Monday night. The most current estimates find the city’s total revenue for the year at $34,099,783 and total expense at 37,466,900, leaving a shortfall of $3,367,117.

“The city is not in any fiscal problem right now during this budget year - it’s the following year,” Finn said. Finn stressed that the numbers he listed are still preliminary, and the city still had five months until the actual budget is presented in which time a lot can change.

“I don’t want the council to concentrate too much on that number,” Finn said. “That number might [later] only be $2.9 million but it’s a big number and that’s why we’re here tonight, to talk about how to get that number to decrease.”

There were no employee salary increases included in the proposed budget numbers because the city is still in negotiations with several labor unions and did not yet know what increases, if any, were coming. There are two years of salary increases that will have to be paid to the police union employees out of the contingency funds that have been put aside if a new contract is reached this year, Finn said. The city will still have to find money for whatever increases are negotiated for the coming year.

Finn said a number of city positions are open and the city has enacted a hiring freeze in order to save money. Those positions and possible cost-cutting personnel changes were not publicly disclosed and were discussed privately with the council in an executive session after the meeting. The city is anticipating an employee health insurance increase of $94,000, or 15 percent. Retiree health insurance will also increase by 15 percent, or $414,057. The city will also have to deal with a 25 percent pension increase for all employees, or $848,877.

“The health insurance and the pension numbers are totally uncontrollable by the city” Finn said. “This is coming from other people [in Albany] who have passed these things on to the city.” Finn said he called a budget meeting months earlier than usual due to the difficult situations such as the new 2 percent tax cap passed in Albany and the mandated pension and the health insurance and increases the city must comply with.

The two percent yearly property tax increase allowed under the new tax cap would raise $272,635 for the city, but half of that must go towards the new central firehouse as per law passed last year by the council. According to Emberger, for the average Peekskill homeowner with an assessed value of $10,000 would see a tax increase of $44. Possible new revenue sources mentioned by Finn included a separate weekly fee for garbage collection.

For example, a $5 fee per residential unit would raise about $1 million a year. Also discussed was a new fee for Saturday garbage drop off, which some council members disagreed with

“What it will do is it will stop people from bringing it down [that day]” said Councilwoman Drew Claxton. Another potential revenue source mentioned by Finn was implementing refuse fees for city condominium associations not currently paying them, which could raise another $118,000 for the city.

Another idea was possibly raising some of the recreation department’s fees to raise another $30,000 in revenue.

“Some of their fees haven’t been increases in quite some time,” Finn said. The city has $130,000 put aside in accounts for special projects that can be closed out and used to help balance the budget, Finn said.

In addition the city has $231,000 in bond money that can be out towards debt service.

Another idea mentioned was raising the Hendrick Hudson School District’s taxes to put it closer in line with what the Peekskill City Schools pay. The district, which serves a relatively small percentage of city residents, currently pays only half of one percent on their city tax levy to the city of Peekskill.

City comptroller Charles Emberger said he is looking into how much the tax collection costs the city to see if the current tax is enough. The city is currently planning to use approximately $750,000 of reserve fund balance towards next year’s budget, and Finn said there is enough saved in the fund balance account that several hundred thousand dollars of additional fund balance could be used if the council wanted to do so.

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