East Hampton Town Supervisor Bill Wilkinson is proposing a $69.96 million 2014 budget, the fourth and final of his two terms, and one that he says will continue the town’s financial recovery of the past four years.
The draft spending plan climbs $882,173 over the current $69.07 million budget, a 1.28-percent budget-to-budget increase. The increase, according to Budget Officer Len Bernard, is driven largely by contractual obligations, including increases in salaries and benefits. The town also factored in a 10-percent increase in health insurance premiums, he said.
The budget does not pierce the state cap on tax levy increases, in part due to credits and carryovers from last year, Mr. Bernard explained.
The draft spending plan calls for approximately $48.4 million to be raised by property taxes, a jump of more than $1.33 million, or about 2.83 percent.
According to Mr. Bernard the basic cap this year is 1.66 percent, and the town had a nearly $300,000 credit. It could have increased its tax levy by that amount last year and still stayed under the cap, but didn’t use it, so it carries over. In addition, the town received an approximate $85,000 credit for retirement payments it made for the police. A state-determined growth factor also played in, he said.
Residents who live outside the villages—East Hampton Village and the East Hampton Town side of Sag Harbor—would see a tax rate increase of 2.76 percent under the proposed budget from $27.91 per $100 of assessed value to $28.68. Residents with a $960,000 home with a $7,000 assessment would see an increase in their tax bills from $1,953 to $2,008.
Those living in the villages would see an increase of 1.81 percent, from $10.96 per $100 of assessed value to$11.16, with the difference largely attributed to the higher average assessed property values in the villages. For a $960,000 home with a $7,000 assessment, the property tax would increase from $767.41 to $781.27.
The bulk of the draft budget, nearly 59 percent, or $41.27 million, would be spent on salaries and employee benefits, a slightly larger figure than the nearly 58 percent, or $40 million, chunk that category took up last year.
Of the $17.8 million proposed to be spent on employee benefits, nearly half, or 48.8 percent, would go toward health insurance. About 17.67 percent would go toward contributions to the state retirement system, 14.28 percent for the police and fire retirement plan, 10.29 percent on Social Security and Medicare and about 5.46 percent on worker’s compensation.
A category named “other expenditures,” which Mr. Bernard said includes all operational expenses, such as for uniforms, fuel oil, and vehicle maintenance takes up about 23 percent, or $16.03 million, of the proposed spending plan.
Another nearly 17.79 percent, or $12.45 million is for debt service, which decreased slightly, by roughly 1 percent, from the current year.
“We’re paying off old debt at a faster pace than we’re creating new debt,” Mr. Bernard explained. “We made a conscious effort—other than the deficit financing we did the first two years—to not borrow any other money.”
Equipment accounts for a mere 0.31 percent, or $216,529.
The town is budgeting for slightly more than 300 employees, the same as this year, he said. There are no proposed lay-offs.
In terms of fund balances, East Hampton Airport is a rare category that has seen a dip, from about $1.5 million at the end of 2012 to about $952,000 projected for the end of 2013, which Mr. Bernard said reflects over-expenditures for engineering consultants and legal fees.
One highlight, he said, is that the town is relying less on the use of surplus and reserves and the budget, therefore, is more structurally balanced.
The draft budget is $1.76 million, or about 2.46 percent lower than the town’s 2010 budget, which Mr. Wilkinson inherited upon taking office.
“My four budgets culminate with a 2014 tentative budget that delivers government and services to the people of East Hampton at a cheaper rate than they were charged when we came into office four years earlier,” the supervisor said in his introductory budget message. “If we take the 2010 budget presented to us from the prior administration, adjust by inflation for years 2011 through 2014, and then factor in the effect of our financial efforts over that same period of time, our performance has led to $50 million of tax savings for the East Hampton taxpayers.”
The town, he said, has been able to absorb more than $22 million in deficit financing while lowering its budgets and tax rates, and another $11.5 million is scheduled to be paid down in 2014. The supervisor listed the following among his tactics: restraint in capital borrowing and lowering overall debt; zero-based budgeting to “ensure only that which is needed is spent”; sale of assets, where appropriate; reorganizing and streamlining staff structure to “better reflect the seasonal nature of local government”; and reducing staff levels mostly through attrition and voluntary termination programs.
Mr. Wilkinson touts this model as having allowed the town to budget for next year without cutting more staff or services.
“I can state confidently that today, as we move into the 2014 fiscal year, East Hampton is in a much better position to face the future financially than it would have been if the tough decisions were not made early and decisively.”
The draft budget has been positively affected by many factors, Mr. Wilkinson said. Some of these include a 100-percent federally funded U.S. Army Corps of Engineers beach nourishment project for Montauk, through the assistance of U.S. Representative Tim Bishop; the sale of the town’s 50-percent interest in the Poxabogue Golf Center in Sagaponack to Southampton Town; replenishment of Ditch Plains Beach in time for the summer; continued capital infusions allowing infrastructure repair and fleet replacements; and staffing decisions responding to seasonal impacts among others.
Larry Cantwell, a Democrat who is running unopposed to succeed Mr. Wilkinson, a Republican, as supervisor, said on Tuesday that he would review the budget carefully before commenting on it. Councilwoman Sylvia Overby, a Democrat, said likewise.
The board is expected to discuss the budget in upcoming work sessions on October 8 and 15. On October 24, the town clerk is to notice a public hearing for November 7, and the final budget is expected to be adopted on November 19.