Caruana presents tentative budget to town

TONAWANDA - After meeting with Town of Tonawanda Department Heads, Supervisor Anthony Caruana compiled the various departmental requests into the 2013 tentative budget, which he presented to the town board and residents during the Monday, Oct. 1 board meeting.

The following changes are included in his budget:

Tax levy:

Included in his preliminary assessment was the tax levy, projected at $44,570,442 - down 6.4 percent from 2012. However, this year, Caruana stated the tax levy in the Town of Tonawanda is skewed due to a property tax settlement with NRG Huntley.

The town entered into an agreement with NRG Huntley, during which the company will begin to make a payment in lieu of taxes (PILOT) in 2013. The PILOT will allow NRG Huntley to make this payment, rather than paying real property taxes. This payment is considered non property tax revenue.

In turn, the PILOT reclassification will reduce the 2013 tax levy by $2,133,300.

Cost per day:

Caruana noted the cost per day of town government for the average homeowner will increase by 5 cents, totaling $3.32 per day. The total town tax for the average homeowner living in a house assessed at $50,000 - including costs for all funds and special districts - is $1,213.48 compared with $1,193.03 for 2012. This is an increase of $20.45.

Appropriations:

Due to increased costs for town employees’ hospital and medical insurance, wage increases for town employees and other related fringe benefits including retirement and worker’s compensation insurance, and an increase in debt payment related to the Parker/Fries Sewer Interceptor project, budget appropriations for 2013 total $96,035,058 as compared to $93,709,035 in 2012. This is an increase of $2,326,023 or 2.5 percent.

Spending:

The most significant increase in spending in the town will be an increase of $1 million due to additional costs for hospitals and medical insurance for employees and retirees. The 2013 tentative budget includes $15 million for this benefit. Additionally, a second increase in spending will include $800,000 in contributions to the retirement systems for employees.

The town plans to also make a debt payment on the Parker/Fries Interceptor Phase One project, in the amount of $492,000. The New York State Department of Environmental Conservation mandates this project.

Purchasing:

The 2013 tentative budget includes funds to purchase seven police vehicles and a backhoe for the highway department. In addition, the town will purchase a paramedic vehicle for the police department, an aerial lift for the highway department and a loader and backhoe for the water resources department. Funds for the additional purchases for the police, highway and water resources departments will be taken from various capital reserves.

Revenues:

Caruana projected a total of $43,264,616 in estimated non-property tax revenues for 2013. Compared with the 2012 non-property tax revenues of $39,994,321, there is an increase of $3,270,295 or 8.2 percent. The increase is due to an expected increase in sales tax revenues, water sales/sewer rents, and cable television franchise fees.

The estimated revenue is also skewed due to the PILOT reclassification.

Fund balance:

A total of $8,200,000 is also included in the budget, which will be set aside to help pay the town bills and town employees for the first six weeks of the upcoming year, until real property taxes are collected in mid-February.

According to Caruana, it is important to maintain an adequate amount of fund balance in order to maintain the town’s high bond rating of Aa2, which to their knowledge is the highest the town has ever received.

In the upcoming week, Caruana and board members plan to meet for two workshop sessions and any new information or refining of the budget will take place at that time.