Crafting the proposed 2013 Riverhead Town budget was "painfully difficult," Supervisor Sean Walter said on Friday.
The proposed $44.9 million budget, Walter said, translates into an approximate 2.94 tax levy increase for Riverhead residents. The exact dollar amount each resident could be expected to pay will differ, Walter said, depending on where in town an individual lives, because there were decreases in special districts such as garbage.
Faced with the state-mandated two percent tax cap and unfunded mandates, as well as escalating healh insurance and retirement cost, which, he said, "have gone up astronomically," while the amount of the levy has not, Walter said the budget has been stretched to "the bone."
In addition, the supervisor said, the town is faced with yearly deficit spending of approximately $3 million per year.
Riverhead residents, Walter said, have been facing a 14 percent tax increase every year since 2009. "We've been cutting every place we can, and relying on deficit funding -- using our reserve funds. That's a scary place to be."
Currently, the supervisor said, there are approximately $9 million in reserve funds. "We have three years to balance this budget," he said.
The budget, Walter said, reflects a one percent spending increase townwide over three years; the cost of living has increased in 2012 by 2.8 percent. "The town's rate of spending has decreased relative to the cost of living," he said. "That has not come without some pains."
On a positive note, Walter said he anticipates an uptick in mortgage tax receipts to the tune of $200,000 higher than expected; next year, the expected mortgage tax receipts are expected total approximately $1.1 million. "I'm very confident we will hit that mark," Walter said. Also, with the downtick in mortgage rate costs and the volume of expected closings, he added, that $1.1 million "may be a conservative number."
Cuts have been made in a number of areas, Walter said: Salaries have been cut by $638,000; equipment costs have been cut by $161,000, and in the proposed budget three jobs have been eliminated, including the town's youth bureau director.
The other two positions slashed include a senior town investigator and and a personnel officer.
Walter said the challenge would be to return one position back in the budget on a part-time basis.
Refinancing the town's debt, Walter said, has resulted in a cost savings of $200,000 per year. "Except for the general fund, the town looks very healthy," Walter said. "The problem is that the general fund is laboring under severe debt."
The supervisor also addressed the lingering landfill debt. "If the town didn't have landfill debt, we would be right there with Southampton Town Supervisor Anna Throne-Holst," Walter said. Throne-Holst's 2013 budget proposes no tax increases or layoffs.
Walter said he did not want to discuss the landfill debt again. "We know what it's done to this town. It's behind us," he said.
Looking ahead, Walter said the trajectory is positivie. "Whoever is supervisor in 2023 has got it made," he joked.
Also looking forward, the supervisor said something needs to be done with the Armory, to create a new police facility. The goal, he said, is to design the new justice court and police department in 2013 and 2014, and, by 2015, the town might be in a position to rebuild the Armory.
"This is a public safety issue," Walter said. "Justice court is not safe. The design of justice court was antiquated the day it was built. The jail cells are not safe in the police department. It's a public safety issue, and this is something that has to get done."
The town is also planning to sell the East Lawn building, Walter said, hinting "good news" on that front is coming soon.
While creating the proposed 2013 budget, Walter said with approximately $920,000 in tax revenue, and retirement costs of approximately $1.4 million, the town faced a $500,000 gap between what it is allowed to collect and what needs to be paid.
The projected tax levy increase, fall within the two percent tax cap, with allowable pension exclusions.
Riverhead is not alone in its challenges, Walter said. "Every town is dealing with this. The tax cap is not sustainable. The only way to deal with this is to grow your way out."
Walter also said he was thankful that the town's assessed value is flat, at zero percent. Next year, should Costco and Walmart build, that will add assessed valuation to the town.
"Growth would have been nice but a negative assessed valuation would have been just terrible," Walter said.
Also on the plus side, Walter said, depending on where residents live, they might see an actual decrease in town expenditures, such as a decrease in garbage district taxes from $356 to $270 per household, "a very significant savings to taxpayers."
The town's ambulance district is expected to also see a decrease as the town moves toward third party billing.
Development at Enterprise Park at Calverton, Walter said, will also provide promise for the future. "Grumman is really where it's at," he said.
On the EPCAL front, Walter said he has had favorable discussions with the state Department of Environmental Conservation, which, he said, have come up with between 750 and 800 acres of potentially developable land. "That will be the real push for the town," Walter said. "The sale of the property and having it on the tax rolls."
Spending for the town in 2013 be approximately $89 million, Walter said, compared to $90.5 million last year.
Chargebacks have been reduced by a quarter million, the supervisor added; the funds were put into the road paving fund, which now has $913,000 for road paving for the year.
"The total cost of operating Riverhead government has gone down," Walter concluded.
Town board members had not yet seen, or had had time to review, the budget but all agreed they would go through the proposed plan line by line. Councilwoman Jodi Giglio said she hoped to work to return the youth bureau director position to the budget.