OVERVIEW OF THE 2021 ANNUAL ESTIMATE
The following Fiscal Year 2021 Annual Estimate for the City of Mount Vernon is prepared by our administration with limited information from the City Comptroller. This administration sought to obtain historical financial data as a basis for budgetary assumptions and projections. Recognizing the importance of reliable financial information, including a three-year expense and revenue comparison (adopted vs actuals), current fiscal year budgetary markers (budget variances) and economic threats due to COVID-19, this administration requested detailed financial information from the Comptroller. As a result, our expense and revenue projections are restricted by the limited financial reports received from the Comptroller, which included a 2019 revenue and 2020 expense reports for the first three quarters of the respective years (ending September 30th.) We supplemented that information with unofficial financial records obtained from the department heads for the FY 2020 budget year.
In summary, this budget of $117,540,246 provides a deep cut to critical service areas while maintaining basic service levels. This budget attempts to take steps to adjust to the dramatic change of economic realities caused by the coronavirus pandemic. Many of the City’s major revenue sources have been severely impacted by the pandemic and have seen shortfalls anticipated from the FY 2020 budget. Parking revenues, State aid, tax certioraris, assessed valuation, school tax revenue and more have impacted the budget in a traumatic way.
Due to the city being unable to fiscally position itself in prior years there is no fund balance we are “aware” of or any bonding capabilities we can use, to help navigate the worst economic environment in over a decade. We remain optimistic that the reopening of the economy and the onset of vaccinations will help boost our resilient sales tax revenues. However, we cannot continue to rely on homeowners to balance the budget and continue to implore the Comptroller to provide desperately needed financial information to complete this budget process.
The FY 2021 budget estimate proposes a tax levy increase of 4.37%. This budget proposes the maintenance of basic City services, while taking deep cuts to vacant positions in Police, Fire, Public Works and Recreation and calling for an auction of 100s of city-owned residential properties and the sale of two major city-owned commercial properties. The City of Mount Vernon can’t continue to be a landlord. Therefore, we are taking every aggressive measure to sell these properties, return them to the tax roll, reduce liabilities, and provide home ownership opportunities for working-class families who are looking to remain in Mount Vernon. The projected decreases in revenue, rise of benefits and healthcare, and potential reductions in federal and state funding have further compounded the challenges we face. This budget includes funding to maintain public safety departments, sustain essential services, and create revenue generating positions.
REVENUES
Gain on sale of tax acquired property ($2,200,000) — Increased by $1,100,000 with the projection that the real estate committee will be fully operational in 2021. With no auction since 2016, we have great potential in growing our revenue stream with the sale of these properties and doubling our revenue in the budget to cover the sale of over hundreds of city-owned residential properties.
Sales and Use Tax ($21,975,000) — Reduced by $150,000. Based upon the State Comptroller report on sales tax collection as of November 2020, we are on track to hit this target. This is a conservative estimate as our sales tax projections are still on track despite a global pandemic that shutdown Mount Vernon and New York for nearly two months.
Real Property Transfer Tax ($2,900,000) — Increased by $200,000 because the market trends have shown that home sales are on the rise in Mount Vernon. The Comptroller will need to collect these funds and deposit them correctly. The budget assumption is that the Comptroller’s office will receive this revenue based on the market trends.
Collection Fees on Delinquent School Taxes ($0) — Zeroed this revenue line because the City no longer serves as Tax Collector for the MVCSD. Due to the Comptroller refusing to pay school taxes out to the school district, we have lost $500,000 in revenue we used to collect from school taxes as a result.
Electrical Permits ($55,000), Safety Inspection Fees — Building Department ($150,000) — Reduced revenues down by 22,000 and $50,000 respectively which matches 2019 budgeted revenues and predicted COVID-19 restrictions.
Parking Meter and Permit Fees ($3,150,000) — Reduced by $350,000 based on our research by the administration this is closer to the actual amount collected over the last two years.
Emergency Tenant Protection Charges ($120,000) — Increased by $50,000 based on a mandatory charge on the city by the state. The Fee was nearly doubled, but the profit is cancelled out by the increase in expense for the Emergency Tenant Protection Act (ETPA).
Rental of Real Property ($750,000) — Increased by $220,000 based upon actual revenue collected through the City, as per the Comptroller 2019 revenue as of September 2019. The trends dictate that this increase is important.
Building and Alteration Permit ($900,000) — Reduced by $100,000 based on the report provided by the Comptroller in 2019.
Fines and Forfeited Criminal Court Fines ($2,500,000) — Reduced by $850,000 due to revenue reports which showed a downward trend in fines and criminal court fines.
Sales of Real Property ($2,300,000) — Increased by $800,000 due to legitimate offers on properties own by the city currently. This projection is accurate if the sale of these properties were to be sold this year. As stated above, we intend to be aggressive in the sale of city-owned properties to place them back on the tax rolls. We cannot continue to hold properties and keep them off of the tax rolls.
Transfer from Water Fund — Net Earnings ($850,000) — Reduced by $600,000 based on unaudited transfers from 2016, 2017, 2018.
Transfer from Other Funds — Community Development ($483.611)- New projected revenue associated with the grant funding for new HUD positions and the NYS Attorney General’s Office in the Planning Department. These monies fully cover the salaries and fringe benefits for these new positions.
Per Capita State Revenue Sharing — AIM ($5,724,553)- Reduced by $1,431,138, which represents a drastic 20% reduction in state funding based upon notification from state agencies that administer our state aid.
We are estimating $55,146,453 in revenue this year, which is a decrease of $2,153,162 from 2020 adopted revenue projections $57,229,615. This shortfall has resulted in the steep cuts in positions, part-time salaries and appropriations, while continuing to fund mandatory step increases, and other mandates. As we have received no information from the Comptroller concerning the Fund Balance, we have not included this in our budget projections.
FUND BALANCE
Cities across the region and country have mitigated budget risk through the use of their fund balance. The last accurate accounting of the cities Fund Balance was in 2017 which exceeded $15 million. In 2018 $5.5 million of the Fund Balance was used to deliver a zero percent budget increase. If there is no Fund Balance that would mean the City expended $10 million in unbudgeted fund balance in 2019 and 2020. Our historic tax collection rate exceeds 98% of those billed.
APPROPRIATIONS
We made 25–50% reductions in office, travel, and equipment expenses across the budget in light of COVID-19. Additionally, we also made some minor increases in technology upgrades in Management Services, Police Department and other departments. There is more money allocated for Overtime in our Police and Fire Departments as they dealt with the frontline effects of COVID. We made tweaks to the Public Works department appropriations by adding dumping cost, due to more garbage and reducing fuel expenses due to lower projected fuel prices. In order to close our books, we budgeted $300,000 to pay auditors to close out the numerous city audits that remain open. This is crucial to restoring our credit/bond rating. We also built in mandatory step increases due to the administration taking over the responsibility that has historically been done by the Comptroller’s office.
EMPLOYEE BENEFITS
While the budgeted number has not increased this number is based on 2019 expenditure reports provided by the Comptrollers office, our New York State Heath Insurance annual premium is estimated at $16 million. Our 2021 budget assumes and budgets for a 15% combined increase over 2 years. The Comptrollers office also discontinued payment of employee benefits for the Board of Water Supply in October of 2019 which should have yielded a $900,000 savings in 2020.
STAFFING POSITIONS ADDED/REMOVED
In our budget, we added a part-time Inspector General at $70,000 so that we can investigate and eliminate fraud, waste and abuse in city government. We also added another $25,000 for an investigator for the CCRB for half the year. In the Law Department, we eliminated a paralegal and boosted the 4th and 5th Corporation Counsel by $5,000 each to attract better qualified candidates. We increased the salary of the Commissioner of Management services to attract better candidates, added a secretary and lowered the salary of the Manager of Information Systems. This is important as we transition to the cloud, update compliances, create dashboards for transparency and work remotely in the face of covid.
In Public Works we defunded the position of Telephone Operator and Administrative Assistant. We defunded a skilled laborer and funded a Tree Surgeon, which is an additional $7,000 and a new Tree Trimmer to support the Tree Ordinance. We defunded 2 recreation maintenance workers, and 1 park maintenance worker. In our Sanitary & Storm Sewer line, we defunded a Motor Equipment Operator and defunded 2 Motor Equipment Operators. You will also notice an increase in the Traffic Division by the transfer of positions from the Police Department.
In the Police Department, we reorganized the department to support the Police Reform needs by added a financial clerk, two social workers, a public information officer, crime analyst and removed 5 vacant positions. Additionally, we defunded a vacancy in the Communication Specialists.
In the Fire Department, we defunded 5 firefighter positions that were vacant in 2019. We added a senior account clerk and new mechanic that transferred over from Public Works.
In Recreation, we defunded an assistant director, youth programs director and half-year salary for the deputy recreation commissioner; in addition to position transfers between departments for greater efficiency and workflow.
BUDGET PRIORTIES
In summary, our priorities are to maintain essential services while improving efficiency in government operation, coupled with increasing revenue generations. To that end, this budget has a net reduction of 7 full time employees (FTEs), representing the removal of 17 existing FTE position and addition of 10 FTEs in priority areas. These priority areas include Inspector General Office, Management Services (Technology), Public Safety (Fire Operation and Police Reform), Nutrition and Food Security. Additional Grant-Funded FTEs are included as part of the Planning and Community Development Department Salaries budget for $481,611 at no cost to the taxpayer or impact on the FY2021 budget. The monies to cover the expense of these grant-funded positions is reflected in revenue code A2889.1
CONCLUSION
We are in the middle of the worst global economic crisis in decades. The total salary increases for this budget amount to under 0.36% or a total increase of $223,563 from 2020. We believe, that based on the numbers and information that has been provided to us by the Comptroller that this budget is the best estimate we can put forth. It is impossible to predict the financial direction of our city without the critical financial reports that have been denied to the city. Although the proposed budget has a 4.37% tax increase, it has kept salaries at a minimal, and placed forward thinking positions into the police department to address the unfunded mandates from the State of New York. Our lowered assessed values and the reduction of state aid by two million is a tough hill to overcome, but we will continue to do the work to deliver the best services we can to residents.
The final thought. We need the City Comptroller to come to the table and present a budget, that is based on the actuals. We must work together to meet the optimal collaboration of revenues and expenses; this draft budget is the first step towards that goal. It is a work in progress. We welcome any input that will mitigate risk and ensure the uninterrupted delivery of services to our resident and stakeholders. My administration is committed to working collaboratively to move Mt. Vernon FORWARD TOGETHER. Our stakeholders should expect no less.
In Service,
Shawyn Patterson- Howard, MPA
Mayor
