The Riverhead Town board adopted the 2013 budget on Tuesday night, after an amendment was passed that will add just over $103,000 back into a spending plan proposed by Supervisor Sean Walter in September.
The town budget – which includes the town's $45 million general fund, $7 million highway fund, and $1.1 million street lighting fund – comes in at just about $53 million and translates into an approximate 2.94 tax levy increase for Riverhead residents.
The $103,730 added on Tuesday will restore a personnel officer position previously cut under Supervisor Sean Walter's proposed budget. The town's youth bureau director position was not saved in the budget, though the idea of possibly hiring the youth bureau director for only part of the year has been discussed.
The town is expected to dip into its reserves to pay for the personnel officer job for 2013, not affecting the tax rate originally proposed by Walter.
Walter was the only one in opposition to restoring the personnel position in the 4-1 vote.
A resolution proposing adjustments to the preliminary budget introduced by Councilman George Gabrielsen that would have reduced expenditures and increased revenues by $143,257, offsetting the cost of adding back in the personnel officer, was voted down.
On Wednesday, Gabrielsen said the 3-2 vote against the adjustments was "bizarre," because after a work session held on the changes Thursday, the board appeared to be in agreement. "Everyone was happy. It was all done and dandy," he said.
Adjustments proposed by Gabrielsen and Councilwoman Jodi Giglio were put together in a package that included a 2.8 percent raise elected officials and non-union department heads decided not to take, as well as a salary reduction for the newly hired tired board coordinator.
Gabrielsen said he believed board members may have been swayed by Walter's discussion of the need for a "cushion," during Tuesday's town board meeting.
Still, Gabrielsen said he is not disheartened. "That's the process. You win a few; you lose a few."
The good news for taxpayers, Gabrielsen said, is that he and Giglio identified missed revenue and other issues including overstated salaries. The savings he outlined, he said, can be utilized by the board in the future if necessary.
On Wednesday, Walter opted not to comment on Tuesday night's board meeting.
When he first put forth his 2013 budget in September, Walter said the process this year was "painfully difficult."
The exact dollar amount each resident could be expected to pay with the increase 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.
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."
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 falls 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."