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NT: Property tax increases almost assured as city faces COVID-19 struggles.

Mon, Oct 19th 2020 11:35 am

By Michael DePietro

Interim Tribune Editor

At Tuesday's North Tonawanda Common Council work session, Mayor Arthur G. Pappas read his 2021 budget message to the council, wherein he says a slight property tax increase seems all but imminent.

The message read, in part:

"The main responsibility of government is to provide for the health and safety of the people. To do this, we need to provide the resources to accomplish this and provide necessary basic services. … 

“Looking at many options demonstrated to us that several options would eliminate some services which I feel our residents deserve and need. Our departments are down to a bare minimum of workers as there have been many cuts over the years. We are now dealing with an older city infrastructure with much to be done. North Tonawanda has been doing more with less for several years. The work force is down but the workload has increased. Department heads have been asked to reevaluate budget requests more than once this year to eliminate unnecessary costs and to create more efficiency. Every budget request has been scrutinized further, not only by the department head, but also by those mentioned above. There's been a hiring freeze initiated this year along with any amount over $1,500 having to be approved by the mayor. Overtime costs are being carefully examined to keep costs intact.

“Even with the steps that have been taken, a tax increase has become a necessity. The reasons besides those already stated are (that) state aid was cut this year by 20%. The state has not given any projections for revenue sharing. Funding is being lost while expenses are contractual and rising due to step increases. State retirement costs have gone up 6% for us. The federal government has not given assurance for stopgap funding. ...

“This budget will raise property taxes by 6.52%, providing the funding to continue to deliver essential service without reductions. Although no one likes to hear about higher taxes, North Tonawanda has raised taxes far less than some neighborhood municipalities over the past dozen years. There were three years of no increase, three years of decreases, and six years of increases of less than 2%. 

“This year's general fund balance increase will increase the tax rate from $13.88 per $1,000 of assessed valuation to $14.78 The total budget from 2020 to 2021 is an increase of $321,805. A home assessed at $150,000 will increase by $135.71 per year. Water and sewer base rates will increase from $12 to $15. The sewer rate will rise from $4.50 to $5 per 1,000 gallons. These rates have not changed in 10 years. This puts North Tonawanda in the middle of what other municipalities charge. The cost of goods and services has increased for everyone and the city is no exception. Prices have gone up for households with food, Insurance, utilities, cable, phones, etc.

“Raising taxes is a last resort. The prevailing philosophy for several years has been to keep from raising taxes as long as possible to keep money in the taxpayers' pockets. This year, this cannot be done with the COVID-19 pandemic tremendously lowering our revenues. This administration has made some tough decisions to provide a fiscally strong budget for residents. That's why it has taken longer. 

“This budget allocates money to the priorities of public safety and maintenance of infrastructure and other essential services. We continue to repair streets and sidewalks, wastewater infrastructure and other improvements. We have repaired a record number of streets over the past three years. We continue to provide for public safety of employees by upgrading equipment and resources within the departments. We are still in the process of working with the Department of Public Works and the county to reevaluate our recycling program. The costs to the city have gone from $0 to $35 per ton to $70 per ton. Proposals have been set in motion to make our sanitation program more efficient. 

“It's interesting to note that the state auditors have indicated a tax increase is likely needed. However, we went beyond this, looking for alternatives. This is the proposed budget for 2021 for the council to deliberate. I will be glad to meet with the counsel to discuss the budget further and consider other thoughts.

“I'm proud of everything that has been accomplished together. I want to thank those that have worked diligently to produce this budget. … Almost no one in our lifetime has had to travel such uncharted waters. All of us will get through this trying time by continuing to work together on behalf of a wonderful community.” 

The mayor and Council President Eric Zadzilka noted the figures were “not set in stone” and the city would continue to explore options to ease the burden on taxpayers. 

The budget deadline is currently set for Nov. 17. City Clerk/Treasurer Donna Braun said the mayor’s proposed budget will be made available to the public this week via the city’s website and she is looking to set a public hearing on the budget for Monday, Nov. 2. 

Tylec Calls on County for Financial Aid during COVID-19-Induced Fiscal Crisis

Amid Tuesday’s financial discussions, Alderman-at-Large Austin Tylec presented a resolution serving as a formal request to Niagara County for $1 million in aid. He said the proposed figure wasn’t an arbitrary amount. Rather, based on conversations with City Accountant Jeffrey Zellner, the city is looking at a $1 million sales tax revenue gap due to the impact of COVID-19.

He went on to reference a 2019 annual audit report for the county, which notes an “unassigned fund balance” of approximately $25 million. In a press release, Tylec said he believes these unassigned reserve funds are “intended to support municipalities during unforeseen financial hardships.”

“If this isn’t a prime example of what the reserves are intended to be used for, I don’t know what is,” Tylec said. “We have a duty to our residents to ensure that we provide the crucial services they rely on, and the county should do their part in making sure we’re able to do so.”

The release also noted “any transfer of monies will require a vote of the Niagara County Legislature.

Zadzilka expressed some reservation, noting the county could be leery of acquiescing the proposal as it could open the door to a flurry of requests from other municipalities. 

“That’s up to (those municipalities). We’re looking out for North Tonawanda,” Tylec said.

Despite his concerns, Zadzilka said he would reach out to local legislators about the request, adding, “Ultimately, all we can do is reach out and see if its something we can do,” he said. 

The move also had some support from Pappas.

“I agree with you, Austin. I think, in all fairness to the taxpayers of the community, we have the responsibility to look at every possibility to reduce this proposed tax increase any way we can. It doesn't hurt to ask, and it doesn't hurt to look into these different possibilities,” he said.

Tylec indicated the resolution would be introduced at the Common Council's Oct. 20 meeting. 

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