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Town of Lewiston unveils 2016 tentative budget

Wed, Oct 7th 2015 04:00 pm

Blazick: Town tax looms for 2017

Lack of revenue called a major problem for town

By Terry Duffy


Preliminary discussions got underway this week on the Town of Lewiston's upcoming budget as Finance Officer Martha Blazick unveiled a $15.608 million tentative plan for 2016.

A slight decline from last year's $16.071 million adopted budget, the 2016 plan discussed Monday was best described as one which holds the line on spending, but also one that will likely see further cuts before it's finalized.

It also sets the stage for a harsher reality for 2017: The distinct possibility of a town tax.

"People need to understand that by next year; (this year) I'm buying them a grace period to plan. By next year, there will be a town tax, guaranteed for 2017," Blazick said.

She said this year's budget, unlike previous ones, would not utilize fund balances to cover expenses. Rather, it would depend on conservative spending expectations by all departments - if not outright reductions. The town simply no longer has any leeway on how it spends, she said.

"There's a couple things I want you to be very much aware of," Blazick said. "There is nothing from appropriated retained earnings (fund balances) in this budget. If we use ... retained earnings, I'm absolutely convinced that Moody's (Investors Service) will downgrade us again."

Blazick faulted the town's use of fund balances, a common practice in past years, as the main contributor to the Moody's downgrade.

She also said the Moody's rating downgrade from A-3 to A-1 has cost Lewiston $165,000 in refinancing costs.

"It meant we (had) to insure a larger amount. (It) will be costlier next year," Blazick said.

"We have to finance that BAN next year and convert it to a regular investment. So, we have to figure out a way not to use retained earnings next year," she added.

The tentative 2016 budget summary, as released Monday, called for the following under appropriations: A Fund general), $2.530 million; B Fund, general/outside village, $2.957 million; DB Fund, highway/drainage - town outside village, $2.761 million; and SS-1, Water Pollution Control Center, $1.838 million in SS-1, the account.

Thus far, it provides $10.087 million in estimated revenues. But Blazick predicted additional changes as discussions among department heads get underway.

Under special districts, the budget includes the following: SF Fire Protection, $1.308 million, with $1.278 million raised by taxes; SL Lewiston Heights, $14,000, with $8,000 to be raised by taxes; SR Refuse, $327,040, with $327,040 to be raised by taxes; SS2 LMSIA, $1.664 million, with $218,402 to be raised by taxes; SSE Lewiston South Sewer, $308,554, with $191,847 to be raised by taxes; and SWI, Lewiston Water Improvement, $1.898 million, with $479,300 to be raised by taxes.

Overall, Blazick cited a number of factors that have contributed to the town's financial troubles, ranging from inaccurate reporting practices (citing $40,000 in unrealized money from Artpark for police services), to poor management and planning (naming the Highway Department as an example).

But Blazick said the overriding problem is insufficient revenue. For example, she said the New York Power Authority hydropower reimbursement monies to the town, which are based on trends in the electrical commodities market, are way down.

CWM Chemical Services gross receipts tax tipping fee monies, based on company operations at its Balmer Road hazardous waste landfill, are likewise way down for 2015. And CWM is forecasting little if no gross receipts tax revenue coming to the town in the future, based on reduced operations.

Other revenue problems include sales taxes that are flat due to sluggish business activity in the area and Lewiston's population, which is based on census reporting. Modern tipping fees to the town also are facing declines due to lower business volume.

And Seneca Niagara Casino monies - another revenue source - are dictated by the county. Blazick forecasted $60,000 for next year's budget, a figure she called "iffy" at this point.

"Every budget has a negative. Our revenues are way down almost a million dollars from 2015 to 2016," Blazick said.

"The town is planning for the worst" in this year's budget, Supervisor Dennis Brochey noted.

In their discussions Monday, Brochey, Blazick and Town Board members reviewed a number of problem areas. The town's Highway Department was called the worst of them all.

Blazick said the town's H-97 account, which covers such infrastructure items as roads, waterlines and sewer lines, plus economic development and other capital improvement projects, had a total of $2.8 million, of which $850,000 was realized from actual NYPA hydro money revenue. Blazick said she was using hydropower money "to make this budget balance."

"As it stands right now, this budget (overall) is drawing $1,278,807 out of the H-97 account. I don't expect that to be the final number," Blazick said, adding the town "needs to sit down and discuss each item, revenue first, then schedule meetings with department heads."

The Town Board will meet Thursday, Oct. 15, to continue its budget discussions, with revenue matters to be covered first, followed by the town Highway Department and the town clerk's office. The Town Board is expected to meet with the remainder of town department heads on Tuesday, Oct. 20.

Despite all the gloom and doom related to a potential town tax, both Brochey and Blazick remained optimistic on the town's ability to get a better handle on its financial struggles.

"We have a big hole ahead of us; we're not broke; we do have plans that we're looking at that I think will work, hopefully," Brochey said. "(The) plan is to bring our Moody's rating back as soon as possible."

Brochey pointed out accountant Pat Brown of Brown and Company LLC, in his August town audit presentation, told the board it had been making "substantial gains" in getting the town's finances addressed.

"We had a plan in place that should improve everything for us," Brochey said.

"The main thing is we have to find revenue," Blazick said.

Suggesting a plan for the future, she added, "There are other sources of revenue; we need a supervisor who will help us go out and find it."

"(The) town can avoid a property tax for now," she said

"(But), in the back of our minds is the possibility of a town tax. We need to research on how to start that," Brochey said.

"It's not just like it's a simple solution," Blazick said, adding the state's 2 percent tax cap on municipalities also will have to be factored in the town's future planning.

"This (budget) is strictly preliminary," she said. "We have a lot of work that has to be hashed out."

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