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2002-11-07 SP SPECIAL TOWN BOARD MEETING NOVEMBER 7, 2002 MTG. #53 RES. 458 7:00 p.m. TOWN BOARD MEMBERS PRESENT SUPERVISOR DENNIS BROWER COUNCILMAN ROGER BOOR COUNCILMAN THEODORE TURNER COUNCILMAN DANIEL STEC COUNCILMAN TIM BREWER TOWN OFFICIALS TOWN COMPTROLLER HENRY HESS WATER/WASTEWATER SUPT. RALPH VANDUSEN DEPUTY WASTE WATER SUPT. MIKE SHAW DEPUTY WATER SUPT. BRUCE OSTRANDER HIGHWAY SUPERINTENDENT RICK MIS SIT A DEPUTY HIGHWAY SUPT. MIKE TRAVIS TOWN ASSESSOR HELEN OTTE RECREATION DIRECTOR HAROLD HANSEN DIRECTOR OF COMMUNITY DEVELOPMENT CHRIS ROUND TOWN HISTORIAN MARILYN VANDYKE Supervisor Dennis Brower-Opened the Meeting PUBLIC HEARING ON 2003 TOWN BUDGET NOTICE SHOWN... Introduced Dr. Henry Hess he has his PHD in Public Administration from Kennedy Western University, Henry would you care to make the presentation on the budget please. Comptroller Henry Hess-I would be glad to do that. Good evening everybody. This is going to be a little less formal than we have done it in the past. Last year we took a count and we had a lot of staff and three members of the public one of which was my wife. Tonight we have a lot of staff and three members of the public none of which is my wife, no volunteers please. We decided rather than through the exercise of projecting this we did a handout, in similar fashion to what we have done in the past and similar format. We always highlight things in a little differently and each budget calls for a little bit different explanation. Before we start I would just give you a little history of how this budget evolved and where it stands today. But, before we start I would like to introduce a new face to the few members of the public that are here the staff all know Jennifer Switzer but Jennifer is a new addition to our office in the past year and is sort of my right hand person there and although she did not prticipate as heavily in this document as she will in future years she is the one that will record all the entries and appropriations and revenues that result from an adopted budget. The process this year is very similar to what it has been in past years and I remind you that the budget takes several phases. One of which is the requested budget in which every department manager submits and others submit requests into the Comptrollers Office and we simply compile it into a requested budget that in July, I think it is, it gets submitted to the Supervisor and it is the basis on which the Supervisor as acting as Budget Officer starts work to develop the executive budget or the Supervisor's or Budget Officers budget. The first formal document that the Town Board starts to work with. So, we have a requested budget we have a tentative budget and then once the Supervisor's submits or turns his tentative budget over to the Clerk and the Town Board they take, I think they have had around six weeks and they developedit into a preliminary budget which is the one that we are going to present tonight. Now, theatrically that is supposed to be the budget that the Town Board said, this is what we intend to adopt unless there is some significant reasons that the public or somebody else finds some flaws in it some spending programs that we do not intend to execute. So, this is the preliminary budget that typically becomes substantially the form of the adopted budget. All those in the room have seen this before everybody has been around and knows how we do this and know how we present it and know the form that our budget takes. There is nothing significant, there is no major distinguishing characteristics of this budget in terms of the numbers. The programs are pretty much a continuation of what has happened in the past there are a couple of significant features that I will point out that don't necessarily make, distinguish, the budget from anything, they are not affected in a major way that would have a sku the numbers eiter up or down one way or the other but there are a couple things as we get near the end I will point out that are probably the most significant individual spending items in the budget. The budget document you have in front of you consists of a number of pages the content of which are on the front. I am going to try and go through this in as logical order as possible so that you can get a good sense of what the budget looks like. There are two documents if you have not picked them up, one, there are two documents one is the budget itself the other one is a handout that has a number of colored pages in it. If we get lost I will refer to the color of the page we should be looking at. The budget document itself is a SUllUllary of all departments and all categories of expenses it does not include the three hundred page worksheet that we do, that is available for your inspection in the clerk's office. That is not part of the adopted budget but we do provide that for the publics review, all you have to do is to g to the Clerk's office and you can see that. What we are going to deal with tonight is pretty much the SUllUllary of the data that is in the budget that the board will consider for adoption. The blue page is what we will look at first and when we think of a budget we really think of how the Town is going to spend its money. It is really two sided, it is appropriations, it is appropriations and revenue but we will start with the expenditures because that is how everybody judges the wise use of taxpayers money. The blue page deals with appropriations for general town operation and when you get your tax bill if there were a town tax it would reflect general town operations. Which reflects the general fund any money that the general fund distributes to the Cemetery fund to the Solid waste fund the general fund support of the Highway fund which does not raise taxes separately and we have a small fund called risk retention for all workers comp claims and for disability insurance. At the top of the page what we hve tried to do here is compare the 2003 budget with the 2002 and as you can see the general fund total appropriations or total planned expenditure for general fund went from 1.9 million to 9.4 million. What we do is deduct out some of the items that are redundant, they appear elsewhere in the budget, if you do not deduct them out they really appear twice. It looks like you are spending the money twice. So, we deduct out the transfer to highway fund and as you see that went down a quarter of a million dollars this year. We transfer out the Cemetery subsidy which is down from last year and we deduct out the solid waste subsidy which is up from last year and we come up with a net general fund appropriation of 6.9 million dollars compared to last year of 6.3 million dollars. A six hundred thousand dollar or 9.5% increase in planned expenditures for the general fund. I will point out to you there is a slight change in accounting for the Cemetery and Solid Waste Subsidy this year they include some non cash susidy the general fund provides the administration for all of the separate funds and for several years Wastewater and Water fund have paid the general fund a portion of the administrative charge this year it will be 100%. We phased into that but the separate taxing districts have paid the general fund a fair portion of the administrative function that the general fund provides for those funds. Under new accounting regulations we are now carrying that and although the Cemetery fund will not write us a check nor will the Solid waste fund write the general fund a check we do account for the cash subsidy we give them and also the administrative services we provide to them. Of the one hundred and fifty eight thousand dollar subsidy to the Cemetery fund thirty eight thousand of that, thirty eight thousand two hundred of that is non cash, it is the value of the payroll processing, the insurance, the governance the oversight and what have you it is the same formula we use for water and wastewater and we are bookin that as a subsidy to the Cemetery fund and in the Solid waste fund of the one hundred and four thousand nine hundred dollar subsidy to the solid waste forty four thousand nine hundred dollars is non cash administrative support, sixty thousand dollars is cash. Nine point five percent increase in general fund appropriations, then we go down to the other general town operation funds, Cemetery, Risk Retention, Highway and Solid Waste and you will see a diversity of a slight almost a flat appropriation for risk retention which you would expect because we have a very good handle on what those expenses will be. We know what our workers comp claims are and they are almost flat. The Cemetery fund is up slightly eight point eight percent. If you deduct out the thirty eight thousand that we talked about it is almost flat. Their expenditures will be just about virtually flat this year. Highway is down, down two percent and they have probably in most cases their labor costs have not gone down in fact there is an icrease in the Highway Dept. but the use of equipment and the replacement of equipment schedules have resulted in some efficiencies there that have reduced their expenditures two percent for next year. And then the Solid waste fund is up fourteen point six percent and a good part of that, not all of it but a good part of that about half of that I should say is the non cash administrative support of the general fund. It is an appropriation to the Solid waste fund but forty four thousand of the eighty three thousand dollar increase in Solid waste is administrative support provided by the general fund. As we go along if you have any question usually I discourage questions until the end but this year I am sitting down I can handle it much better you can ask questions as you go along. Go ahead Jim. Landfill Supt. James Coughlin-It is a Solid waste question. That is the first time you have added that expense to it? Comptroller Hess-Yes it it. Supt. Coughlin-What brought that up? Comptroller Hess-It is a general accounting standard board statement number thirty four which requires us to account for the total expense of operating each of our all of our individual functions, Gasby 34, so you are getting charged for what the not in cash because we are treating it as revenue and expense, but we are booking the value of the services the general fund provides for your operation. It is an estimate of what would happen if you had to provide your own payroll you had to buy your own insurance you had to have a Board of Directors to, aside from the Town Board, to oversee your operation and there are the things. Mr. Pliney Tucker-In other words Henry there is no money moving around? Comptroller Hess-There is money moving around but not all of it. The money moving between the General fund and the Solid waste fund they are getting a sixty thousand dollar cash subsidy, the difference, and forty four thousand nine hundred dollars worth of administrative assistance that is how the one hundred and four thousand nine hundred is broken down. Sixty thousand in cash, forty four thousand nine in administrative assistance. Mr. Tucker-My question is we are in partners with the City of Glens Falls on the waste end of it are they going to be paying any part of this? Are their fees going to increase any or what? Comptroller Hess-I do not know what their fees will do, their accounting provides that they will charge us a share of administrative costs, I mean it is a very standard procedure, they had an admin cost, you are talking about in the wastewater? Mr. Tucker-No I am talking about Solid Waste. Comptroller Hess-Oh, Solid Waste, to the extent that there is an deficit in that fund there are supposed to pay us half of that. We are still operating this is the year, in 2003 perhaps in 2002 we have not sized it up yet. The Solid waste fund will go from a positive fund balance to a negative fund balance when that occurs the City owes us half of that. The Town Board will have to take action on how they want to treat that. Director of Community Development Chris Round-Change that with the amount of expenses charged each individual user and make that go away? Comptroller Hess-You could, that could be erased by changing the revenue strains. Yes. But so far they are keeping the same revenue. The green sheet is the same type of analysis except it applies to the taxing districts, to the independent taxing districts, the emergency services fund the lighting districts the wastewater and the water district. The same type of analysis you could see that the emergency services fund expenditures are up a slight Fifty seven thousand dollars or about two point two percent. I will tell you that, that is based on their requested budget. The contracts have not be negotiated for emergency services next year and it is only the fire company contracts that are up. They are in the process of being negotiated there is no assurance that those numbers will come in at two point seven one four million but the budget provision is for what they requested there is no obligation that the town spend that or that it limits the expenditure of that. That is simply a budget number. Lighting Districts we show a three seven percent increase and that is simply based on our estimates of what our utility charges will be next year from Niagara Mohawk it has very little impact we have enough fund balance if we miss that by a little bit there is enough fund balance. We do try to cut that cost because we do not want to raise taxes in the lighting districts that we do not need. We do have substantial fund balances in some of those funds we aretrying to use them up to the taxpayers benefit. Wastewater districts, appropriations are up eight point seven percent doesn't mean that is an eight point seven percent against the existing districts there is a new district in there. The South Queensbury, Queensbury Avenue Sewer District is the first time being budgeted and that accounts for most of the eight point seven percent increase in their appropriations. In the Water Districts as you can see a minor one point one percent increase in appropriations. Special District showed increase and expenditures, planned expenditures of two point five percent add that to the general town operations and all funds across the Town show an increase appropriations of eight hundred and eighty eight thousand dollars or four point six percent. Four point six percent expenditure increase for next year across the town. Grey page, the next one. What we are trying to do here is take the appropriations and just point out the significant categories. We do not really necesarily talk too much about the contractual expenditures and here again I remind those that are not familiar that there are three basic categories that we deal with. One is personnel expenses, personnel you can further break down into salaries and wages and fringe benefits but personnel I consider being one category, equipment and capital expenditures is another category and virtually everything else. The government calls it contractual in most of our lives it means something different than the government. The government is anything other than the other two categories. Supplies are contractual expense in government pile ends. So it is just supplies, utilities, casual labor, contracted services, repairs you name it that all fall into that category. They are pretty standard from year to year. Payroll is a fluctuating Is a growing number not just fluctuating in our budget and I will point out to you what is affecting it this year. As you can bee we are budgeting five point two million dollars for payroll this year and that is a very accurate estimate. We did not know when this budget was presented exactly what the union, we just settled with the CSEA we did not know exactly what that would be. We now know that it is and this number is very accurate it is going to be just a little bit more than this but there is another category down here that we discovered today that will cover that very nicely. Up two hundred and nineteen thousand from last year or a four point four percent increase in payroll expenses. In fringe benefits we broke it into three categories. The two major ones, one of them is a major expense another one has a major growth trend, group health insurance. Our budget it up eighteen point eight percent this year until today we thought our expense was going to go up nineteen point nine percent less a savins in one category or about eighteen percent. We found out this afternoon at one o'clock or one thirty that expenses is actually going to go up about fifteen point nine percent. So, we have got a little bit of a savings there in the group health insurance so a few dollars of that are going to go in to cover the payroll expenses we did not anticipate and that is going to be pretty much a wash. There is probably maybe a half of a percent budgeted more than we really expect to spend in group health insurance payroll combined. New York State Employees retirement system you know, in the 80's early 90's it was uncommon for the town to have to pay anyway from twelve to twenty percent of payroll into the employees retirement system as the premium if you will and employees all paid three percent employees in tier three and four paid three percent the employer paid a varying number depending on the actuarial tables of the retirement system and depending on the investment performance of the fund, or the retirement fun. As you know for the past several years the investment performance has been outstanding and several things have happened. One is, the town has paid very little in fact less than one percent of payroll for the past couple years in premiums the second thing that has happened is the retirement system has improved benefits to certain categories of potential retirees. The third thing that has happened is that all employees in tier three and four that reach ten years of service no longer have to make their three percent contribution. We have benefited at all levels. But, what has happened this past year is we got notice early in the year that our share our expense is going to be substantially higher we estimate around three percent and I have the bill in the office. We are covered for it because we anticipated it last year and I think we budgeted adequately for out expense that comes up next month. When we did this years budget it was really a challenge. We budgeted a healthy increase and it may not have ben healthy enough. Expenses may have gone from two and a half percent we estimated around five and I have received e-mails lately that expenses may go even higher than that. One estimate is seven and a half another one may go as high as ten. I do not know what is going to happen. To be honest with you there was a comptrollers election a couple of days ago and where some of the e-mails we got were to alarm us to influence the election or whatever, I do not know if it was a republican, democratic scenario being played out because there is no basis. We have received nothing from the retirement system to indicate our premiums are going to be above five percent. The last estimate we got from the retirement system is that they will be five percent or less of payroll. That is still an open issue but it could come back to bite us next year. But as you can see the reason we included it on here as a separate item is we budgeted a hundred and ten percent increase in retirement system contributions. Other payrol taxes and benefits are down slightly simply because we sharpened our pencil very sharp because of the other increases and really we are not very conservative in that at all. We cut down our accruals for vacation and unused time and disability insurances to the bear minimum just because we did not want to build the budget any higher than we needed to. As you can see total payroll costs are, have grown seven point five percent in next years budget, total payroll cost including personnel costs. Including payroll and fringe benefits. We are, there are trends here and despite the fact that group health insurance is not going to go up nineteen point nine percent it is only going to go up fifteen point nine percent. The group health insurance portion of our payroll package has gone from twenty six to thirty percent of payroll. So, when you know about the percentage of fringe benefits one of the things we like to keep track of is of your payroll how much more do you spend in fringe benefits in other words whatdoes the dollar in payroll costs you. Every dollar in payroll costs the town another thirty cents in just health insurance up from twenty six cents last year. As I pointed out New York State employees retirement system doubled from two and a half to five percent of payroll and we hope that, that is enough next year. Total taxes and benefits town wide increase from forty seven and a half percent to fifty two percent of payroll. Now, every dollar of payroll costs the town a dollar fifty two, the extra fifty two cents in fringe benefits and taxes. Just as an aside, total payroll costs represents nearly forty percent, thirty nine and a third percent of what, of all the money the town spends. The town spends twenty million one hundred thousand dollars as you can see on a prior page of that seven point nine million dollars is in payroll cost and that is thirty nine and a third percent of total town expenditures is in payroll related costs. Another page a little bit later one you are going to look at a millio six of the towns budget is in what I would like to consider non recurring capital costs. Elective capital cost that could either be in or out of the budget. If you deduct those things out of there and you bring the budget down to eighteen point five million payroll represents forty two and a half percent of the total town budget not included non recurring capital costs. Director of Community Development Chris Round-How does that compare to the county to another municipality is that good is that bad is that reflective of the industry or not? Comptroller Hess-I do not know how that compares to governments of all sizes I think it reflects, I think it is pretty much standard for municipalities our size. How it relates to the county I do not know I have not compared it to that. We have looked at some municipalities our size because you get the comptrollers report and I think we are keeping pace with that. It is a big number that does not necessarily but that does not reflect what are salaries are in relationship. Our expenses would be could be if we paid less we still have a lot of fixed expenses that could drive that up to sixty percent. So, even though you might say we are at fifty two somebody else might be at sixty somebody else might be at forty the unknown factor is what are their payroll expenses lets sayan average per hour I do not know that. I have never weighted that. Director Round-What percentage of payroll costs are attributable to CSEA bargaining employees vs. non bargaining employees do you have, that is not something you normally look at when you prepare a budget but this is a point of reference. Comptroller Hess-It is about it is nearly fifty, fifty. There are more people in the bargaining unit and less people out of it but of course the people out of it include management staff. So the average salary for the non bargaining unit is higher simply because by its nature includes management staff. The next page is a gold page and this is just a summary for every bodies interest on community service contracts. It does not represent a large portion of the budget it does sometimes represent a controversial portion of the budget it is something that the Town Board spends a lot of time on and it is worthy of looking at. I have only included the two thousand and three numbers here what the board is contemplating approving for 2003 community services contracts. Here again there is no assurance that all these contracts will be entered into historically they generally have been. But, the budget right now is at eighty nine five. At the bottom it represents nearly an eight percent reduction in what was budeted last year. On the other hand it is still over double what it was in 1999. If you look in 1997, 98, 99 it was right around forty five to forty seven thousand dollars it has increase in the year 2000 to sixty six thousand, seventy three thousand, ninety seven thousand and now it has taken a slight turn to eighty nine five. There is a list for your information. The next page is almost a light page a cream colored page. What I have done I have gone through the budget and just pulled out what I would consider to be elective or non recurring capital expenditures I would not necessarily have to be here some of them are they are wisely put I am not going to say any of them are not wisely in here but especially the equipment and replacement reserves but if the budget needed to be trimmed by a million six hundred thousand dollars this is probably the first place they would look. So, I call your attention to the big numbers that are in the budget. The Board has budgeted two hundred and fifty thousand dollarsto purchasetthe Hole in the Woods property on Aviation Road. That ..supposedly know about that and that is included in next years budget. Cemetery Fund subsidy, a hundred and fifty eight thousand, we talked about the solid waste subsidy a hundred and five thousand we talked about the board has for several years contributed a hundred and fifty thousand dollars to an economic development reserve that is not necessarily accumulating now days because we entered into a contract the last couple of years with QEDC that does some economic development work on behalf of the town. So, that money is generally appropriated and paid to the Queensbury Economic Development Corp. and then last year the Town established the capital improvement fund that capital improvement plan and funded and set up a two million five hundred thousand dollars, with the goal of funding it providing a continue funding stream to it and this years funding to that plan will be five hundred thousand dollars if the budget it approved. So, the gemal fund of the six million some odd net dollars in that fund a million one are large capital or subsidy type of payments. The only other area of the budget that has significant expenses of that type are the water fund and there are twenty thousand dollars which is, that is recurring but not necessarily needs to be. Twenty thousand dollars to equipment fund and four hundred and fifty thousand dollars for pipe line replacement and repair. Mr. Tucker- Dr. Henry, ..Dept. 1940 what department in 1940? Comptroller Hess-That the department is called purchase of rights of way. Mr. Tucker-I asked a question, I ask a lot of them, I asked it anyway when this was brought up that they were going to purchase this property I asked the question where this money was going to come from, is there an answer tonight where it is coming from? Comptroller Hess-I can tell it is coming from next years budget appropriations. Mr. Tucker-Out of taxes. Comptroller Hess-Yes. There was some consideration and the transaction, there was some talk in the town on how to do this one of things they could have done was appropriated additional fund balance this year and paid for it and that is all budget. The seller agreed as I understand it, I was not involved in negotiations, the seller agreed, that if it would serve the towns needs better to delay the transaction until January that, that would be fine and from a comptrollers point of view I made the pitch for delaying it until January so it becomes a budget appropriation fully disclosed at a public hearing and so the net affect if the same it is just that here it is in the budget open for discussion as opposed to a transfer to fund balance that is less obvious. I am glad to see Justice McNally come in the room at this time because the next page the one we are looking at the brown page it says elected officials salaries. The Justices are making three dollars next year. That is obviously a mistake which was aught by a couple of us but after this was printed and stapled together it was too late to do anything about it. But I will give you the right number if anyone cares to write it down. Maybe Justice McNally would. Councilman Brewer-One guy here might care. Comptroller Hess-It is actually double that it is six dollars. It is thirty four thousand three hundred and seventy three dollars if anybody cares about that number. But, this is, we are required to disclose this at the public hearing and this is the disclosure, this is what the Town Board is contemplating for elected officials salaries next year. For all elected positions and it represents a three percent increase from what was paid to them last year during the current year 2002. Mr. Tucker-What was the percentage of everybodies? Comptroller Hess-Three point six. Mr. Tucker-Three point six for everybody? Councilman Brewer-Well for the Union it was three six. Comptroller Hess-Three six for the Union no body else has been settled yet. There has been no adoption on non union salaries, but it was three point six for those that have been adopted, three point six. That pretty much summarizes what I really want to highlight on the appropriations side of the budget the next page has to do with revenue. Revenue is very easy to talk about in the Town of Queensbury because our primary revenue source is sales tax. As you can see we talk about what I have tried to highlight here is what we are budgeting or what we are estimating for revenue for 2003. What we estimated for revenue or budgeted for revenue for 2002 and what are current estimates are for the 2002 revenue. In other words how is it going to come in compared to what we budgeted. As you can see on the right two columns, we estimate we are going to receive about a million dollars more in sales tax then we budgeted or about, in total revenues about eight million four hundred thousand dollars. Weare budgeting nxt year in sales tax in this budget if it is adopted the way it is presented at six point one million dollars in sales tax revenue and that is a conservative approach. Weare less conservative than we have in the past because every year the trend builds higher, and higher and so we close the gap on how conservative we are. But there are really some concerns about that and I do not mind telling you. The State sales tax revenues are down dramatically this year and Warren County has been fortunate enough to buck that trend. Sales tax revenue in Warren County and Queensbury is up around nine percent from what it was last year. Mr. Tucker-Are we doing something right? Comptroller Hess-I do not know we are doing it I think tourism was good I mean, who ever is in charge of tourism and who ever is attracting the people you know I cannot say the Town of Queensbury has a lot of influence in that, it certainly does not hurt that, but whether it is sustainable or not is the question. So, because of that we have recommended a budget next year, an estimated revenue of six point one million dollars, up substantially from what we did this year but still less than what we are going to receive this year. So, total revenues will be seven point six million dollars and the other two items are not significant. We have State other taxes, State and Federal aid, mortgage tax being the largest one. Queensbury has a lot of deed transaction, people refinance their mortgages this year and I do not know that, that will be sustained either. When interest rates start to go up people are not going to refinance their mortgage they are going to get them at the low end and that will dry up. Transations, sales of houses will continue to be a source of revenue but I think we have benefited this year dramatically from refinancing and we contemplated that last year. We saw the trend and we budgeted for that. Sales tax is the major one and it represents eighty two percent of 2002 general fund revenues, it represents eighty eight percent of next years appropriations. Eighty eight percent of the money we spend next year in general purpose, general town operations will be sales tax revenue dollars, that is in general fund appropriations. General town appropriations which include the Cemetery, Highway and Solid waste it will represent fifty five percent. I point out the significance of sales tax and this is something we repeat every year, it is significant, it is something we feel, we are very fortunate but it also creates a vulnerability because it is not a revenue source that we control. When Pliney says are we doing something right, if we are doing it right we could assure we could do it again, but te Town Board in the Town of Queensbury and the functions that we perform as managers do not necessarily influence sales tax revenue. So, we are vulnerable to a down turn in that if tourism or retail, if we should get more retail competition from our neighbors or tourism doesn't perform as well as it has in the past. The next page is a yellow page and it is something that you see every year this has been the same for all six budget presentations it is something that we developed back in 1977 and it contains a lot of numbers that really are not necessarily important to you, but I would like to go across the top line and just tell you what you are looking at here and when you get to the last page I am going to complete the budget presentation and then I am going to do a real quick lesson for you that is going to relate back to this page. If you just look at the general fund I have circled some numbers and you are going to see that we estimated the year 2002 revenue estimates were eight point one million dollas, excuse me seven point two million dollars. We are estimating that we are going to receive eight point one million dollars. So, we are going to receive revenue of eight hundred and forty seven thousand dollars more than we estimated last year. If you look at column seven, eight and nine, you are going to see that we appropriated nine point one million dollars and right now we are estimating to spend eight point five million dollars. So, we are going to under spend six point or six hundred and eighteen thousand dollars. Those two numbers look pretty dam good it looks like we are going to spend nearly how much, fifteen, a million five we are going to have a million five. Mr. Tucker-Surplus Comptroller Hess-Surplus, that is what it looks like, all right. But, what we did last year we appropriated more than that from fund balance so if you look at our available fund balance last year four point six million dollars or four point seven million dollars and you see over here on colunm ten we are estimating that we are going to end the year with a four point two million dollar fund balance, because we appropriated one point nine million dollars to balance last years budget. So, I guess what I am trying to point out here is that even though we have generated what appears to be a surplus of a million and a half the fact is we have spent four hundred thousand dollars of our fund balance this past year. It is simply because we have appropriated fund balance and it was planned it is not a surprise it was planned to do that. We spent less than we anticipated spending we appropriated one point nine but we are spending four hundred thousand of it and that is. It was planned there is nothing wrong with it it is deficit spending it is planned deficit spending but it does decrease the fund balance so we do end up with a four hundred thousand dollar deficit if these numbers hold true. We will come back to that in just a few minutes and I will try to explain that a little bit clearer. But I would just like to tell you I met with Richard Dinolfo came in to the office today he had talked to Jennifer earlier in the week and asked us to be a resource, Richard Dinolfo had been the chief examiner with the New York State Office of the State Comptroller he was in charge of the Glens Falls Office. He handled this region the north east part of the State. He was transferred about a year or so ago back down to Albany where he now does special project. The Office of the State Comptroller has changed it focus over the past ten years or so under Carl Mc Call and we talked today about it and we hope that it continues to refocus. We would like to see it do more auditing. It has become less of an auditing function and more 0 a guidance function for a municipalities to show them here is how you should be doing business here are the things that you should be, governments, Town of Queensbury how many years ago was it that it was a million dollar business and now it is a twenty million dollar business and so it is publishing, the Office of the State Comptroller is focusing it's attention on making sure that we have a resource to show us how to go about growing our administrative capabilities to meet our growing budgets and our fiscal responsibilities to our taxpayers. We Richard Dinolfo called our office and talked to Jennifer earlier in the week and I am please to say it, that one of the reason that he calls us is because we do is as good a budget process as any municipality our size in the State. I am not saying our spending plan is the best or that anybody will or everybody will agree with how the money is spent but as far as the process we use to document and to document and to gather data and to enforce the integrity of thenumbers and the way we put our budget together and the way we detail, the way we provide detail he considers us a model, both from his experience from working here in the north country. Mr. Tucker-We are doing something right. Comptroller Hess-We are doing something right in that regard. Yes. So, he came in and gather a lot of our data, he left here with about an inch and a half worth of data to take back and he is going, not just ours he is gathering from other parts from other municipalities around the State, because he is putting together a new guide book for municipalities to deal with issues such as what should you fund balance be, what should there are limits on what you can put in contingency and there are legislative limits, we are not near it so I cannot tell you what they are it has not been an issue for us. But in some municipalities they budget, they do not do a good budgeting job, they say, well lets throw it into contingency and we will transfer it out when we need it. The Office of the State Comptroller is writing guidelines for those kinds of things. We had quite a conversation about those things today and one of the things we focused on is what kind of fund balance should we have? As this things gets publishe it will probably be the last thing he does before he retires in a few years he probably thinks he can make a career of this book he is writing, but you know, we talked about should it be ten percent should it be twenty six percent? On the yellow page you see that if our estimates hold true through the end of the year the town is going to end up with an un-appropriated fund balance of around twenty six point eight percent. When you have a revenue source that you cannot control that is not extreme. That is not extreme of a government of twenty million dollars, ten million dollars in general purpose, ten million in other but that is not extreme. It is not necessarily saying it is right we do not have a formula that determines that it is the right number. That is what he is trying to do, he is trying to come up with some guidelines to let municipalities evaluate what is a good number that we should target for a safety factor. It is an un appropriated fund balance and we could take un appropriated fund balnce and divide it by your budget and that is the colunm I call the safety factor the percentage of budget or number thirteen. So, I just wanted to explain to some degree where we stand in the general fund as far as fund balance. There are a lot of numbers floating out there you will read in the newspaper where I have said it is seven million dollars, and I chastised the newspaper and say you might, there might be somewhere that shows seven million dollars, certainly not un appropriated, I have never said that. This year right now we are at about four point two, four point three million dollars if we appropriate one point seven we will have an un appropriated fund balance of around two point five million dollars at the end of the year. Mr. Tucker-I have heard you use the word un controlled revenue source Comptroller Hess-Sales tax. Mr. Tucker-What do we have to do to have a controlled revenue source, do it through taxes? Comptroller Hess-The property taxes. Mr. Tucker-And we would not be able to afford to pay them. Comptroller Hess-You are right, you are exactly right. The final sheet in the presentation the pink sheet is also one that appears in all your budgets so when I send it to you after the board adopts the budget I always send every department manager a complete budget of their own department and a copy of the pink sheet and usually the gold sheet. The pink sheet is the one that takes all the prior data including the appropriated fund balance and allows us to estimate what the tax rate should be. These are very close estimates. We are talking about fractions of a percent. It depends on how the county when they get into their dark room how they manipulate their numbers a little bit. But we are talking about within a hundredths of a percent these numbers are right even though we call them estimated. General town tax, total general town operations despite its growth, we will appropriate a total of two point three million dollars out of the various funds. The one point seven that we talked about from the Gemal fund, eighty two thousand from the Cemetery fund, forty seven thousand from Risk Retention which we programmed two years ago that will carry that fund until our old claims are long paid off. Four hundred thousand from the Highway Fund and twenty seven thousand which is virtually the fund balance left in the Solid waste fund that will bring them down to near zero. That will result in no taxes again for the Town next year. In emergency services despite the fact that there is a twenty two thousand dollar projected growth in expenses there will be no increase, in fact it is a slight decrease in taxes next year probably it looks like a cent and a half.. There is no reason to increase that. The rest of them are pretty much flat, there is a small, an increase in South Queensbury lighting district because we have been burning a fund balance we received, several years ago we received we had an audit done and we got refunds and the people in that district have been paying virtually, a very low taxes they have inally burn the fund balance and now they are going to pay, be paying a more fair share of the lights in that district. But other than that you can see they are just up and down small amounts. Waste water although it shows a hundred percent decrease in taxes for a Pershing Ashley Coolidge that does not mean that their bills are going down a hundred percent it just means that it is not going to be taxed it is going to be user fees next year. So, the tax rate is going down but the same amount of money is going to be collected in user fees. But, for the purpose of this sheet it looks like we are reducing taxes one hundred percent, I am surprised somebody doesn't run on that. In the water districts they are flat, they are absolutely flat again next year. I want to go back and talk about fund balance illustrations just as an educational thing, but that is aside from the budget presentation. Are there any other questions specifically about the budget itself that anybody has a question about? Mr. Tucker-I know we vote on it on a ballot the library shouldn't that be part of the operation of the town? Comptroller Hess- I do not know whether it should be or not but legislature does not make it part of it. It is strictly a pass through. That tax collector collects it and writes, we write a check to the library and it does not go through our books at all. Very much like the school taxes, we collect school taxes and pay that it does not go through our books at all. That is a separate taxing district that appears on the County tax bill that comes out but it is not part of what we do. The last page is the multi colored page and I am going to tell you this is somewhat complicated so my explanation is not intended to make you understand exactly what has happened here. I guess it is really more or less to convince you that I know what I am talking about and perhaps it will confuse you enough so that I am the only one that knows what we are doing here. This is my claim to job security. So, if I can cloud this any further I would love to do it. But, here again we are talking about fund balance because that robably get, that got a lot of talk this year. That has gotten a lot of public attention what is the Town fund balance. I think as department managers and as members of the public that are interested in this just knowing what the calculation is. There are really two functions in, there are two aspects to the accounting we do in our office, that Jennifer watches very carefully. One is the budgetary appropriations and that is depicted on here by the pink colunms and secondly what do we actually do? So, when the board passes the budget she is going to book entries that say ok, here is where we estimate our revenue to come from here is where we think our expenses are going to take place and we are going to have a set of book that show twenty million dollars worth of revenue and expenses before any transaction is conducted, that is budgetary accounting. Then we have operational accounting that actually counts every dollar that we collect and every dollar that we spend. During the course of the year we publsh reports that compare the two but they are separate and distinct, that lets us monitor, are we over budget in revenues or under are we over budget in expenses or under and allows us to measure our performance against budget but it does not effect our fund balance. The difference in the two does not affect the fund balance is not affected at all by budgeting nor by appropriations nor by estimated revenues. It affects how much of our fund balance becomes appropriated or un appropriated but it does not change the total fund balance at all. What changes the total fund balance is that what you actually receive and what you actually spend. A few minutes ago I made it a point to say we are going to save six hundred thousand dollars in expenses and we are going to get eight hundred thousand dollars more in revenue and it looks like we did good. It looks like we took you know it as one hundred and fifty thousand dollar surplus but yet our fund balance is decreasing to the tune of four hundred thousand dollars. his sheet is an attempt a feeble attempt perhaps to simplify a complex transaction. But, what if you look at the first pink line it says the first years budget and these are simply illustrative numbers they do not refer to the prior pages. It is simply to illustrate if we budget an eight million dollar expenditure and we estimate that we are going to receive seven million dollars in revenue, six hundred of it from sales tax and excuse me six million of it from sales tax and one million of it from other sources that requires on column ten that we have to appropriate a million dollars in fund balance to balance the budget. On the right side we still have a five million dollar fund balance but only four hundred excuse me we started with five million dollar fund balance only four million of it is available to use we call that appropriated a million of it has been put aside because if you don't for some reason you spend all the money and you only receive what you intended to spend a million of it will be usedin next years budget. But the books show a five million dollar fund balance even though you. Mr. Tucker-How can you do that Henry you are spending the money you are moving the money you, how can you continue to have a five million dollar fund balance when you have taken a million of it and moved it to another area. Comptroller Hess-Well, we have not moved the money we have only made accounting entries. That is the whole point. Mr. Tucker-Well, I mean that is moving it, ain't it? Comptroller Hess-That is the point of this illustration to say no, we haven't. Mr. Tucker-If we had a problem that came up and you had to have five million dollars right away quick you would have four million and you would have to go borrow a million wouldn't you? Comptroller Hess-Well, yea, you would, but that is the yellow that is what I am trying to illustrate here the pink represents budgetary appropriations and it affects what you intend to do. It does not necessarily change your fund balance. Your fund balance is five million dollars although a million of it is reserved for future expenses. But then you go to the year one operations and this is what truly affects your fund balance. You actually take in, you actually expend five hundred thousand dollars, you spend seven point five million dollars. Over on colunm six, seven, and eight you actually take in two hundred thousand dollars more than you expected. Six point two in sales tax one million in other for a total of seven point two. Here again it looks like you should have a surplus but you don't you have really created a deficit of three hundred thousand dollars. You have spent three hundred thousand dollars of your fund balance. You have spent seven point five you have taken in seven point two you hav spent less of your fund balance than you intended but the fact is that you did dig into your fund balance. We tend to think of budgets that gee if I budgeted and I spend less we are going to have a surplus. The point of this illustration is you will not have a surplus if you appropriate fund balance to balance your budget. So, in that case you have a four point seven million dollar fund balance and it is a pretty good illustration it is a round number illustration of what is happening to the town in 2002. In past years and I think I have said this before, but my first few years with the Town wisely or unwisely I am not going pass a value judgment the town was ultra conservative and it always appropriated a fund balance but it always generated a surplus in excess of the appropriated fund balance and the fund balance in the town continued to grow and it grew to a level that maybe is higher than it should have been. Weare on the other trend now we are appropriating a fund balance we still are spending lessbut we are still spending the fund balance down. It brings me down to the next example here year two, and this is really the illustration I am trying to make you aware of. Year two lets say we increase appropriations six percent and we estimate that sales tax we estimate that other revenues are going to come in at two percent higher, because our revenues our governmental revenues will never keep pace at least they never have, have never kept pace with our expenditures. We do not raise community development fees, we do not raise dog licenses, we don't increase them at the same rate that we increase expenditures. So, that number will always lag or always has lagged. So, we will say we are going to increase our estimated revenues two percent and we are going to increase sales tax in order to get a seven point five million dollar revenue we are going to increase sales tax in this case eight percent. Sales tax has to come in at eight percent higher to make this budget work which is virtually we are still appopriating nearly a million dollars or nine hundred and eighty thousand dollars. So, sales tax has to go up eight percent in order to remain for revenues or excuse me expenditures to increase at the rate we are spending at six percent higher and for us appropriate a million dollars in fund balance. That is simply a budget item so we would still have a four point seven million dollar fund balance. Under that I give two scenarios what happens if we meet our budget in a similar way to what we did the previous year. We spend five percent more instead of six percent that we budgeted we only spend five percent more than we did the prior year, we are seven point eight still a lot less than we budgeted, we budgeted eight point four but we already spent seven point eight and over all in the actual revenues we took in a five point six percent increase in sales tax which is well within the range of reasonableness. We took in revenue, other revenue of a million three which we said a million thirty thousand we said wewere going to take a million twenty thousand. So, we got revenue of seven point five million dollars. We still are going to have a three hundred thousand dollar deficit. We still are going to generate a three hundred thousand dollar deficit and decrease our fund balance down to four point four. Not to belabor this any further than just the next line, but what does it take under that scenario to balance the budget so you don't decrease your fund balance in other words what do we call a break even budget? We do not want to deplete our fund balance any lower than it already is what has to happen? If we continue the five percent expenditures all for that year two budget and we receive a million thirty thousand in other revenues so that be break even, revenues and expenditures are the same amount we have not spent any fund balance your other revenue source has to increase ten point four percent. So, our sales tax would have to go up ten point four percent. What I have tried to illustrate is simply the vulmability we are not passing value judgments on the way the town is operating because I think the town is operating at a very health way and a very sound way. But, I think, I really feel the need to express our vulnerability on relying on sales tax as heavily as we do without maintaining a fund balance, and that means by not spending it down on a consistent basis. Because anyone year we could take a hit in anyone year of a million dollars and in effect take a million and a half or a million point seven hit on our fund balance. So, that is just a way of explaining it. I do not point out that, for you benefit the department managers benefit because you have influence over that. I only point it out because there is a lot of discussion about it and if you let anything like happens to me people catch me on the street and start talking about you know how much fund balance do we have why are we spending it the way we do, why are we accumulating so much. Why do we have so little, and if they do the same to you, ou should have some sense of what it means. It does not affect fund balance what affects fund balance is what you actually take in and what you actually spend through out the year. You have got the sheet in front here if any body takes this seriously and wants to sit down and talk about it in the office I would like to do that and any member of public the same way. If you have a need to understand it deeper this is not the place to do it, but you have a worksheet in your hand you can always take it home and mark it up and call me and come in and see me about it if you want to. Obviously, I take it very seriously because I think the long term health of the town is based on having a reasonable savings account and we do and it is not in jeopardy. It is only in jeopardy if our sales tax revenue takes a big hit and there is where my fear is that, that will happen. Not just here but at the County. This is not a County budget hearing but I am more fearful about the County than I am about the Town because I se things happening there but we are blessed to have the sales tax revenue but it makes us vulnerable. That is the end of my budget presentation. Supervisor Brower-Thank you Henry. Town Counsel-Dennis do you want to open the public hearing? Supervisor Brower-I think the public hearing has been opened I mean as far as I am concerned every question that was asked was part of the public hearing but, Barb, go ahead. Mrs. Barbara Bennett-Mr. Brower, you did not mention that the hearing was to be held tonight at the Monday Board Meeting and I know you mentioned it a few weeks ago. I ran into this a couple years ago when I went to a school board meeting the night you announced it and you did not announce it the week it was held and I did not know you had it until it was allover. If you could announce it the week that it is being held. The other thing you were talking about the fund balance because that is what I was looking at and we seem to wind up with surpluses fairly regularly and I am glad to hear you say that there is a limit on the fund balance that you can have. I figure there must be something in the law because if you continually get large surpluses it is like you are operating government for profit business. So, there must be a law that prevents you from doing that. Comptroller Hess-The Town did not have a surplus in 2001 and will not have one in 2002 and there is not one in the budget for 2003. We are not building an additional, we are not generating a surplus every year at this point. Mrs. Bennett-To me I thought maybe you had miss-directed goals from what I thought, I thought you should be budgeting and taxing to meet the necessary expenses of government operation but it looked to me that you were budgeting to create surpluses so you could do projects that you wanted done in the year and have the money right here to use. Comptroller Hess-I do not know of any motive, I do not know that, that was ever a motive I think that, a pendulum swings and it swings with things that need to be done with the, and the nature of the administration. There was a time when, that, that administration was ultra conservative and that was a great time when they probably could have spent but they were conservative on both the revenue side and the expenditure side. We were generating more revenue like you said, we're not necessarily taxing for it because we had a very minor tax rate but it was coming in from sales tax but there was an opportunity there to spend some of that money on projects. But, the administration was also ultra conservative and not doing that too, and what has happened now is there is a more balanced approach toward using the money that had been saved by, that had been accumulated if you will in the past in putting it to fair use. My only caution is and when I talk about the declining fund balances it is not a criticism of t, it is just a cautionary note that it should not be zero and we need to find what the number should be. The Town needs to generate a fund balance it does not have to generate surplus every year but it needs a health fund balance it absolutely does. Mrs. Bennett-Because it looks like over taxation if it happens all the time. Comptroller Hess-It could be over time except that this Town Board of course doesn't tax there is no tax rate so we might be over taxing the sales tax people but we would love to do some more of that we would love to take all the sales tax we can get. Supervisor Brower-When we dropped the Town Tax two years ago that dropped three hundred or three hundred fifty thousand in revenue Comptroller Hess-About three hundred and thirty thousand or three hundred and forty thousand. Supervisor Brower-that we were receiving from a variety of sources not only residences but businesses within the town. When we dropped that tax obviously to have no town tax there was a cost to do that but we felt we could afford to do it over extended period of time assuming our fund balance did not decline too rapidly. Comptroller Hess-That was a very prudent move on the part of the Board for the financial condition that the town was in at that time and it is still in that condition it can still sustain that. My concern as the Comptroller for the Town is tax stabilization to make sure that if the Board, I consider no tax to be a long term commitment and the last thing I would want to see happen is to get into 2004 and 2005 and find that we do not have an adequate surplus, excuse me an adequate fund balance to support an appropriation for the following year to balance the budget and when, if the tax comes back that it comes back at a big number. That is what I track very carefully so when I caution about maintaining an adequate fund balance because I would hate to see us give up a eighteen cent tax down to zero and then hold our breath until it comes back at a dollar or more. That is a risk it is not one that we are facing imminently but it is one we have to keep our eye on. Mrs. Bennett-If you come up with any of the government laws that control budgets which you are not allowed to do I would be interested just seeing what it says. Comptroller Hess-Say again? Mrs. Bennett-If there are laws that say you cannot do this in government budgets? Comptroller Hess-Actually, the laws do not necessarily tell you in governments, Bob and I have had conversations about this before, laws take two forms when they deal with us as citizens, laws tell you what you may not do, laws limit you assume you can do anything until a law takes that right away. When a law is written to affect government it tells governments what it may do. In other words government has no right to do anything unless it is specifically granted a right to do that by the State Legislature or the Federal Government or whoever a super jurisdiction is. So, we do not deal necessarily with things that we cannot do we can only do the things that tells us we may do. Mrs. Bennett-I think I have run into that, if its not in there you do worry about it. Comptroller Hess-You cannot do it. Councilman Stec-I think I know the question you are asking and for example I know school boards are limit by law by a quantitative amount I believe it is two percent of a fund balance that they are allowed to take and after Henry's presentation certainly they do not drive their revenue from sales tax so their revenue stream is a lot more stable because it is generated from property taxes. So, school boards do have a set percent amount. Earlier this sununer when I was doing my homework regarding the rebate discussion I spoke with a member of the local comptrollers office that had done some work with the Town for the fleet management program I think his name was Leonard the younger guy. He gave me, I asked him that question, and he gave me a packet of information and I am going from memory but basically the packet that he gave me pointed out that in the past there was for Cities, Town and Villages, a percent amount and they did away with that and now the law reads and I remember the phrase because it was in sveral places and they talked about it, they use the word reasonable amount. The law says we are to have a reasonable fund balance and then it goes into say well, how do you figure out what reasonable is, it is different for every community, big community might want to be talking about a percentage a little community might want to talk about a dollar amount but you cannot compare the Village of Lake Placid to the City of New York. But, the words that are in the law now according to the paper that he gave me, it says reasonable fund balance and reasonable is open for interpretation. Mrs. Bennett-I do have one, Comptroller Hess-I do just want to make one comment on the two percent for schools, Dick Dinolfo got into a discussion about that today and he, that has been around for years and nobody considers that reasonable, not even the Comprollers Office. That is a totally umeasonable amount and it is antiquated and I expect that the work he is doing will adjust that and probably take a, schools are much easier to calculate what they should have because they revenue sources are known they start collecting taxes in September they start getting State aid in December assuming the budget has been passed. They know what their expenses are their fiscal years all end in June. School closes in June but they start buying books and they have summer expenses and they have maintenance and everything. So, that can be calculated much easier for schools than it can be for municipal government. But, two percent, Dan is right that is what the law says. But, and if you exceed it and I have been there and we used to maintain a muchhealthier fund balance than two percent, they send you a letter that said our review of your financial reports indicates you have exceeded the fund balance, this is to remind you that the law says two percent and the ps was always that a boy, that is the way to go. Mrs. Bennett-School budgets are way up they do not know where they are at anymore because the State budgets are not being passed they make their budgets up in April and they have no idea what they are going to have coming in and they are trying to make a budget and put it through and they do not pass the budget until September. Comptroller Hess-They can pass the budget without knowing what the state but how do you tax your citizens if you do not know what the other revenue sources that is really a big, they know what they are going to spend but how much are you going to tax of course what happens in schools in most school districts the voters have to approve it at the poles. With the level of uncertainty not know what the other revenue source is they are inclined not to approve it they are inclined to defeat it. That is the quandary the school districts are in. Mrs. Bennett -One last question, if I find where it was, something that struck my attention charges for cemetery services forty thousand dollars, crematory services one hundred and forty five thousand now does that mean there are a lot more cremations now or does it mean there is a very big difference between the cemetery service and a crematory service? Comptroller Hess-It means that the crematory is a busy operation and handles more services than the cemetery does. Mrs. Bennett-Do you have any idea the difference in the charges? Comptroller Hess-I do not have that with me but a cremation is less expensive than a burial. Mrs. Bennett-It is, I suppose you have got the lot and everything else. I was looking at it and thinking it must be a big charge for cremation. Comptroller Hess-No, it is less than a burial. Mrs. Bennett-When you get to my age you wonder about those things. Comptroller Hess-They are not having these sales lately either. Supervisor Brower-Would anyone else care to ask any questions or have any comments? I just want to thank, or Chris, Marilyn come forward. Town Historian Marilyn VanDyke-I was just looking at the community service contract list which is a very nice list of a lot of hard working groups that provide some excellent services in the community and in a variety of fields, so it has a varied aspect to it as well as a very useful aspect. I was wondering do these groups come to the board with a request for needs that they have and you review those before you come up with these figures, is that the way it has been working? So, you have actually seen these people or a representative of these groups. Supervisor Brower-Not necessarily sometimes they just send a letter. Town Historian VanDyke-They send you a letter or they you have some communication on some level with thern. Comptroller Hess-To be specific, we when the budget process starts in June if they were on, if they received support from the Town in the past we send them a letter saying if you are going to make a request to be in this budget, here is the time frame I need a letter nice neat supporting data and we keep that and the Board does have the opportunity to review all those when they want to do that. They have to ask or they are not in the requested budget. Town Historian VanDyke-That brings me then to just one of these and that is the Mountainside Free Library. The reason I wanted to raise the question about that is that I know this is a very historic old building and that is where I come from of course the history side of it and they are having some difficulties there with how they will be able to operate as a library under new state regulations for the operations of library and I wondered if they brought any of that information to you in terms of requesting funds? Councilman Boor-I did not see it if they did. Comptroller Hess-They did not. The history that we have with them, the town has provided eleven hundred dollars at their request in my brief history with the town. Several years ago they needed some building repairs done and they made a request to the town and the town gave them a one time, gave them what they asked for. To do a roof and painting and windows I think it was, but they never submitted a request for anything other than the eleven hundred dollars for public issues. Town Historian VanDyke-We will leave it at that because it is really an internal problem with them but I do know that they have some difficulities Supervisor Brower-And the County has some appropriations for regional libraries I think it is a fifty two thousand dollar appropriation on an annual basis for a variety of libraries in the Southern Adirondack system that are part of the county. Town Historian VanDyke-They might get some coverage from. Supervisor Brower-They may be some small stipend from the County distribution. Town Historian VanDyke-Thank you. Community Development Director Round-I will ask you a question. Comptroller Hess-OK. Community Development Director Round-You.. some concerns about the predictability of sales tax and the stability of sales tax collection and that points to a need to examine other revenues sources, is there a strategy that we should be employing to look at other revenue sources so that we can soften any impact into the fluctuation..? There have been some people in the audience hey lets look at impact fees for a particular area of service is there something that suggest the town should be? Comptroller Hess-I think, I am not a revenue enhancement person, I am a control expenditure person first and then a revenue, lets raise the revenue to meet those expenditures after that. If you need to enhance revenues in order to do that, it is just a personal feeling of mine, you are asking me for a personal opinion, should we be doing that, my feeling is that you should always maximize you should always satisfy your revenue to meet your expenditures. But your expenditures should always be scrutinized carefully. We talked this year there were plans about how you deliver how the town delivers services to itself and to its constituents in a more realistic way. I do not mind saying that if I have a criticism because we compare our self with the county. People always ask us are you like that county and I do not think that we should do that. I think the County should try and emulate what we do over here but you know I talk about revenue enhancement committees but they do not have a committee that says letslook at our operation and find out are we sharing services and stuff around there and I think that is our first responsibility to spend money the most wisely and then raise what we need to spend. So, no I am not suggesting that we go out and look for revenue enhancements until we certify that we have spent it wisely. Community Development Director Round-That is a reasonable response. You mentioned County revenue enhancement committee and I agree with you, you need to look at reducing expenses. I think one of the things that your presentations do allow an examination of the budget and I asked the Supervisor this same question is how is the County Budget presented to the public I have requested budgets from the County and it is not something that lends itself to analysis. It is very much a line by line presentation the budget is presented and each department here is the total expenditure here is a personnel cost here is a contracted services cost and then here is a contingency. That is the level of detail that is presented. Supervisor Brower-They do have handouts that indicate areas of increase in expenditures like Medicaid increase was and the percentage and the cost to the county. They will go through various sectors and have a handout sheet, it is kind of a summary of the budget that shows where decreases or increases in expenditures occur and unfortunately the ledgers bend toward the increase in expenditures rather than the decrease. Community Development Director Round-Would you say it compares favorably with the presentation at the town or do you think there could be enhancements to what is happening at the .. Supervisor Brower-It is not quite the same at all, the process is not quite the same. Community Development Director Round-The last thing you mentioned a lot of public attention to the fund balance and I know Mrs. Bennett struggled with the difference between a fund balance and spending to meet the taxes the revenue we are collecting and that is not what is happening here at the town. I think it points the need to make, there is no press here at all it points to the need to establish a meeting with the Post Star Editorial Board to explain what goes into our budget process in order for the public to better understand because...they may not but they won't print what they don't know they will print what they want to say and generally it is not the same as what they know. But, I think you have to give them the opportunity and if they are not willing to seek it out I think maybe you need to seek them out that would be my recommendation because I have said it at every department managers meeting that we have had and the Supervisor knows this that many of the public relations issues that are in thepress we all know they are motivated for some interest that we do not know. It is an editorial board that has a particular prejudice or particular bias but it makes it difficult for us and I think I can speak for most of the department managers makes it difficult for us to do our jobs when the press is continuously publishing stories that are inaccurate that were, we are not delivering adequate services or that the Board is making decisions based on limited information. It really it would be really helpful if the Supervisor and the Board did make contact with the Editorial Board to explain this is just a very topical one because they have criticized the fund balance and spending practices. That would be very helpful especially opportune time to contrast the process that we have in contrast to what the County has and I think here is a real opportunity to shine. I just throw that out as my two cents. Supervisor Brower-Chris, one of the things you mentioned about the County one of the hot issues presently is the occupancy tax debate unfortunately it continues to be associated with the sales tax debate and there are many supervisors in towns that are heavily dominated by tourist traffic that would like to see an increase in sales tax, their motivation being that they believe that it is a fairer tax than an occupancy tax that's simply collected by hotel units. I am a supporter of the occupancy tax because I believe number one it impacts our visitors not our residents and number two I am very concerned what a one percent increase in the sales tax would be. We are kind of an island to ourselves. If you look at a map of New York State and you look were people have eight percent sales tax and where they have occupancy taxes we are a little bit of an island of ourselves as far as the sales tax. If we were to increase our sales tax to eight percent I am afraid we would lose a lot of retail business to other comunities around us and that would have a dramatic impact on potentially the Town of Queensbury and Warren County. It would even, so, you know, I am very much opposed to an increase in sales tax and I will fight as hard as I can to oppose an increase in sales tax and yet I believe an occupancy tax is a very natural thing to happen in the County particularity when the County Supervisors are prepared to dedicate it to tourism promotion and try to bring in additional tourist to generate additional sales tax revenue through our current seven percent sales tax rate. Most of the Queensbury Supervisors are generally united on this issue except for Supervisor Morrell who we continue to lobby to try to get him to at least let the issue go to the floor of the full board as opposed to having to get a two third majority to get it to the floor. We have not been successful to date but certainly he is definitely receiving a lot of pressure from a lot of Queensbury residents and concerned citizens regarding the issue and lean only hope that he will recognize that probably ninety to ninety five percent of our citizens feel that this is a reasonable way to go. To retain a million dollars in what the County spends from the General fund for tourism promotion currently. Director of Community Development Round-I appreciate your position on the occupancy tax because I think the question that was raised by one of the three public at large reps was what are we doing right when it comes to tourism and Comptroller Hess commented I do not know if we are successful in tourism promotion but the analysis that the convention and visitors bureau bid perform in support of the occupancy tax is that for every dollar spent on tourism promotion generates between three and four dollars in return in increase spending in increased sales tax collection. So, they estimated if it is currently approximately a million dollars spent on tourism today that the source of that revenue is sales tax today and that could be displaced if you impose the occupancy tax would generate something like two and a half million dollars in occupancy tax revenue which would then generate several million dollars in sales tax revenue because increased visitor ship. So, it is really a win, win situation and I know the oponent successfully argued that sales tax is a fair tax and I think we all know and there was an article today that sales tax doesn't tax anything besides outside, sales tax is not imposed on necessities and I think we all know and we all buy things every day that we feel are necessities that sales tax is imposed upon. So, I think a lot of misinformation is going on and again a conversation with the Editorial Board of this Board would be a terrific opportunity to speak strongly about an issue that I think we all feel strongly about and that it is really a water shed issue that will really help us in the future continue to sustain our sales tax revenue. We are, I are preaching to the choir here. Councilman Boor-I think it is a good idea and I think we should do it I think the problem is I don't mean to belittle the paper but I do not know if they have the competence to understand these matters either. They are writers they are not accountants and I do not know how good a job you could do we could do. Comptroller Hess-But you know we are talking about the paper I will take it a step further I mean, you look tonight and I am very appreciative that we have three people here from the public here tonight it should be thirty or it should be three hundred. Two things have happened one is and I joked about it earlier when we were doing that last sheet. One is come out and understand what we are doing and if you cannot understand it then at least appreciate the fact that the Town Board and the Comptroller and the Administration knows that they are doing. That the people that are budgeting here the department managers know what they are doing. It is a matter of confidence. I do not expect the public and the paper to come in and understand at the level that we understand it because we work with it every day. But, if they come into this presentation and see it and we do try to we don't go down to line item that's, I could read that we do analysis we do understand and if they come in and see the kinds of work wedo whether it be the public or the paper or both preferably there would be a lot more confidence in what the Supervisor and the Town Board has done with this budget then to sit back and just throw pot shots out at on Sunday at an Editorial on Monday on Boos and Bravos that is really my objection. I just wish the public were here to get that level of confidence. Councilman Stec- They seldom let knowledge get in the way of the press. Henry do you know the ball park figure what percent of the County sales, or Dennis, what percent of the County sales tax revenue is generated in the Town of Queensbury or a gut feel? I got to think it is well over fifty percent. Comptroller Hess-I don't, I do not know, I would think that it would have to be. This is where between, Lake George does big cut Councilman Brewer-Lake George does a lot. Comptroller Hess-Between Lake George and Queensbury it would have to be seventy five percent or more but what, I do not know what the lodging and the restaurants are up there. Councilman Stec-I would say fifty, twenty five because they are what, three months? Councilman Boor-And Lake George is although it is a powerful economic source in the summer it all but goes away in the winter, which also speaks to the bed tax half of the hotel owners are in Florida spending the sales tax in Florida not up here. Mr. John Strough-I do not know how accurate but the other night at the meeting they said only thirty percent of the sales tax comes from outside sources. Director of Community Development Round-It is a very difficult number to get your hand on because sales tax is not recorded in that fashion it is recorded on the basis of the County. Thirty percent of our local economy, thirty percent of the sales tax is attributed to tourism, meaning if somebody coming in from outside our county to spend dollars whether it is a hotel a restaurant, gas etc. but that is still an estimate and it is the best guess. But if you look at that number and try to estimate where are the opportunities to spend dollars that are generated in sales tax I think that is a number you guys are looking at well probably fifty percent of the opportunities exist within Queensbury or greater but the influx of tourism in the amount of hotel dollars the hotel rooms are concentrated in Lake George and if you look at you can isolate that number and you can take, there are X number of hotel rooms, X number of visitor nights and this particular source of revenue is generated you could estimate how much ales tax is from hotel rates along and come up with a number. Again, still it is real hard to do, but the way it is redistributed is based on assessed value and that seems to be an acceptable method but whether that is fair an equitable or not? Councilman Stec- That is the point I was going toward and I know that is not set that is not anything that we or the County can control or change but the public perception out there I think, and I think this way because at some candidate forums that I have been to the last couple of weeks I have seen candidates for the Assembly minor party candidates and long shots at best but, go on the offence and their remarks are definitely from the perspective that they thought that our sales tax revenue was directly proportionate to what we generated within the town limits. I do not think that the public under stands that it is not, and that is why I wish there were more here but perhaps in your conversations with the public as department heads that it is not divided up back to the Town based on how much we generate because it would be I think arguably in excess of fifty percent it is not even given back to us on population, which I think is forty percent it is given back to us on assessed value which is thirty eight pecent. So, when some hotel minded communities start wanting to tinker with sales tax and the public is out there and saying why is Queensbury complaining, Queensbury is the retail hub well, Queensbury is floating all the County sales tax and I do not think the public really appreciates that so. Supervisor Brower-But, I do think Dan, that and I think you bring up an excellent point I think that is why the County is willing to step up to the plate when the City and the Town could not come to an agreement on a sewer agreement. The County came forward and said that they would be willing to pledge two percent of their share of sales tax for the County for the next number of years what ever the final agreement ends up being in order to enable, well actually for two purposes. Number one to help the City with all the non tax services that they provide with tax exempt firms like the Hospital who is the largest employer in Warren County and other firms that do not generate revenue for the City and yet all the Citizens of the County benefit from those services that are provided. They felt it was only fair to do that and also though to enable the agreement to make sure the agreement was fostered between the Town and City before an agreement between the County and City would occur and that still has yet to beconsummated. However they are very close at this point in time it probably be another month or so in my estimation, but that is only an guesstimate. However it is, they recognize that Queensbury has the commercial strength and also the potential industrial strength with some of the industrial parks that we have if we were able to sewer them we might be able to bring in industry, provide jobs and then you have the multiplier effects of the jobs, full time year round jobs with benefits that keep people off the welfare rolls and also hopefully provide a good living so they can raise their families in our community and stay in our community, and even attract kids that go away to college to come back to our community to work. So, hopefully we will be successful I think we have made a lot of progress in that regard certainly forming the So, Queensbury, Queensbury Avenue Sewer District and the Route 9 Sewer District should have tremendous impact for the future of our community and hopefully to the benefit of the own of Queensbury and its citizens. Councilman Brewer-On a side note the issue we talked about with the two accounts, do we do that tonight do we do it next week? Comptroller Hess-I think it is worth mentioning at this public hearing. Councilman Brewer-Well I just think, we all talked about it we all know what we are talking about is the money from Solid waste and the Cemetery for the transaction of the truck and the trailer we are not going to get the trailer we are going to share the truck so in my mind I do not think that money should be in the budget. Supervisor Brower-The five thousand. Councilman Brewer-The five and the seven, fifty eight hundred and seven thousand. Was there money in Rodney's budget to transfer and that money should not be in there either, right? What was that the seven thousand? So we take that seven from Jim and the fifty eight take it right out? Councilman Stec- There is no reason not to is there? Supervisor Brower-Actually I asked Henry about that last week and Henry kind of indicated that well if you are not going to purchase the trailer and you are not going to charge the cemetery for the truck it doesn't really matter because it never would actually occur it was simply budgeted but it would not actually be part of the budget. So, if you want to make the budget a little more accurate which it will end up doing we can take that action. Councilman Brewer-In defense of that Dennis we sat through budget hearings and we sat painstakingly looking at fifty dollar cuts here hundred dollar cuts here and now we are talking about fourteen, twenty three thousand dollars I think that is significant and we should take it out of there. That is my point. Comptroller Hess- I just want to comment it does not make any difference it does on not effect it is so insignificant in the over all scope of the budget, I will point put to you it is all internal so it is not money spent anyplace except for the ...it is all internal it does not effect the bottom line and secondly what you put in the budget was based on an approval of a report submitted by committee. It was a committee report and you accepted it and it was ..to the budget so what, if you do that and it is fine with me, but you now are modifying the report of the committee or just changing something from the report of the committee it wasn't a specific transaction you put in it was the report of the committee that got folded in, in its entirety. Councilman Brewer-I just think that sometimes we change things whether it be for the better or the good lets change it if it is not significant or shouldn't matter if it is in there then why did we put it in there. Supervisor Brower-Because at the time it was the recommendation of the Fleet Management Committee after words I think Board Members changed their mind after discussion with. Councilman Boor-They worked it out, the department worked it out. Councilman Brewer-Right the departments worked it out. Supervisor Brower-The department managers worked it out and came back to us and said they were not going to need to spend the money. Councilman Brewer-They do not need to spend that moneyn Councilman Boor-Well it is not going to get spent anyway. Councilman Brewer-Right so lets take it out of there. Councilman Stec-I think we have already agreed to take it out. Supervisor Brower-Is that the desire of the Board, I mean there are a lot of other things in the budget like for example the fire company budgets are going to be less than, we only plugged in what they requested we are not going to end up spending that money and we are not adjusting those numbers. Councilman Brewer-...because we do not know what they are Dennis these are numbers that we know what they are. Those number we have no idea what they are going to be. Supervisor Brower-If that is the desire of the Board then we will make two adjustments at least. Would there be further discussion this evening? Board Members? Councilman Stec-Congratulations to Judge McNally. Supervisor Brower-I would just like to thank Henry Hess for the presentation this evening and I want to thank the participation of Town Managers and Thank you for being here this evening. I want to thank members of the public for taking the time to come and get a better understanding of our budget process and the numbers for the 2003 budget. So, with that I would entertain a motion for adjournment. RESOLUTION ADJOURING TOWN BOARD MEETING RESOLUTION NO. 458.2002 INTRODUCED BY: Mr. Daniel Stec WHO MOVED FOR ITS ADOPTION SECONDED BY: Mr. Theodore Turner RESOLVED, that the Town Board of the Town of Queensbury hereby adjourns its Special Town Board Meeting. Duly adopted this 7th day of November, 2002 by the following vote: AYES: Mr. Turner, Mr. Boor, Mr. Stec, Mr. Brewer, Mr. Brower NOES: None ABSENT: None Respectfully, Miss Darleen M. Dougher Town Clerk-Queensbury