A closer look at 2016 municipal budget

Three new Payments In Lieu Of Taxes (PILOT) to the city and higher foreclosure registry fees should boost city revenues by some $652,000 in the 2016 budget.

The increase in revenue from those items, however, will be nearly offset by increases on the expenses side in legal services, engineering, and financial administration.

City Council introduced a $53.17-million budget last month that’s expected to hike taxes by an average $39 on the municipal portion of tax bills, about 1.75 percent. A public hearing and final approval is scheduled during a special meeting at 6:30 p.m. on June 21.

The proposed municipal budget can be found in its entirety here.

Revenue from the foreclosure registry is up considerably. For 2015, $40,000 originally was budgeted but some $322,500 was realized. For 2016, $325,000 is budgeted.

The three developments expected to begin PILOTs in 2016 anticipate a total $367,000 in payments:

Total PILOT payments in the budget will be $1.885 million, up from a budgeted $1.346 million in 2015, or about $538,377. However, only $968,531 was realized in 2015 because $400,000 was budgeted from the Landmark project but none realized. Landmark is projected for a $571,377 PILOT in 2016.

City Council is scheduled to consider a PILOT for the 43-unit Gramercy project on East Cherry St. during its meeting on Monday.

Miscellaneous revenues saw a 13-percent spike, about $512,352, over what was budgeted for 2015. Among the more significant were:

  • Municipal Court, $864,000 realized versus $600,000 budgeted in 2015 (+44 percent)
  • Comcast Cablevision, $233,000 realized versus $155,000 budgeted in 2015 (+50 percent)
  • Uniform Construction Code fees, nearly $600,000 realized versus $450,000 budgeted in 2015 (+33 percent)

Among the more significant increases in expenses are:

  • Financial administration, other expenses, $520,000 appropriated in 2015 versus $637,000 budgeted for 2016 (+22.5 percent)
  • Legal services, other, $475,000 budgeted versus $779,000 realized in 2015 (+64 percent)
  • Division of Engineering, $500,000 budgeted versus $702,000 in transfers (+40 percent)

The city, and Redevelopment Agency, last year replaced longtime general counsel DeCotiis FitzPatrick and Cole with Weiner Lesniak. It’s unclear what, if any, effect that change may have had on legal services spending or if there was more legal work last year. The city also is appealing a lawsuit over the Special Improvement District (SID) expansion as well as challenging the local hospitals tax exemption, which could very well add to the bills but that’s just speculation on my part. City Administrator Cherron Rountree could not be reached for clarification.

UPDATED: There was more legal work for the city but the billing rate remained the same, Rountree said, however, she could not elaborate because of pending or ongoing litigation. This year is an anomaly but it’s not unusual for some areas to go over budget. As for revenues, Rountree credited the boost in Municipal Court fees in staff being more diligent in follow-up on fines. The increase in construction fees is a result of more projects, both people working on their homes as well as large development projects.

During the State of the City address in February, Mayor Samson Steinman mentioned a restructuring of departments in City Hall but didn’t get into specifics. It’s unclear what impact that restructuring had this year’s spending plan. Steinman could not be reached for comment on that.

I’ll update this post if I get more details.

UPDATED: Engineering fees always fluctuate, said Rountree, and this year could be associated with the upgrade of the water treatment facility. The city plans to bring some engineering work in-house, combining the Division of Planning, Division of Building and Construction, Division of Engineering, and Division of Health, into a Department of Community Development led by a new department head. Rountree said the city anticipates savings of $200,000 to $300,000 in the first couple of years as a result but it will be a slow process to take advantage of economies of scale.

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