Thank you, Mr. Auditor

Thank you, Mr. Auditor

Thank you, Mr. Auditor.

Thank you for the good news that the town had a $1.2 million surplus last year in its basic governmental fund, the General Fund.

And thank you for calling the Town Board’s attention to the “sleeper” in the 2012 General Fund budget — the $1.1 million in revenue the General Fund collected from the Refuse, Water, and Hallocks Mill Sewer special district funds as a reimbursement for administrative services paid for from the General Fund. 

Coincidentally, the amount of the surplus and the amount of the special district fees were virtually the same. Without the special district revenue, there wouldn’t have been any surplus.

Special district charges represent the second largest non-property tax revenue in the town budget after the sales tax. The more revenue the town charges the three major special districts, the less it has to raise in town property taxes — or — the greater the budget surplus at the end of the year.   

(Special district fees affect taxpayers differently.  Depending on which special districts they’re in, taxpayers may pay taxes into one, two or three special districts. And some pay into none.  For a more detailed explanation of the special district fee, see Special District Fees. )

In 2013, in his first budget, Supervisor Grace pushed through a 1% increase in the special district fee. The increase raised an additional $199,000 from special district taxpayers and enabled him to reduce the town tax paid by other taxpayers.  (The Supervisor initially wanted a 2% increase but the Town Board refused to go along with his plan.)

Thank you, Mr. Auditor for calling the Town Board’s attention to the fact  that while the special district charges are justified, the amount of the charges need to be based on a clear methodology and documented administrative expenses.

Hopefully, Supervisor Grace, who voted to hire your firm, will take your professional advice. Although his colleagues on the Town Board directed him — last December — to provide the same information, he has consistently ignored their directive.

And finally, thank you, Mr. Auditor for volunteering your firm’s services to help the town figure out a fair and equitable methodology for determining how to calculate the special district administrative fee for the upcoming 2014 budget. As explained in a previous blog, the current methodology of assessing the fee as a flat percentage of each district's budget makes no sense.

The special district issue boils down to a simple question:  are some taxpayers being unfairly overtaxed in order to cover expenses that should be paid for by all taxpayers?

No one disputes that taxpayers in the special districts should reimburse the town for the administrative services their district receives and which are paid for by all taxpayers.  The question is:  exactly what services should they be paying for?

Supervisor Grace likes to point out that 17% of the $52 million total town budget (the combined budget for ALL budget funds) represents special districts. And to paraphrase the Supervisor:  If the town was run like a business. . .  

Although the Supervisor never quite finishes his sentence, his implication is clear: he thinks special district taxpayers should pick up more of the General Fund’s overhead expenses associated with running the town. 

But what specific overhead costs does he mean? He never quite says. Does he mean 17% of town hall’s utility bills? Or 17% of the $9 million budget for the Police Department? 

Last year, Supervisor Grace singled out police services as justification for a 2% increase in special district fee — without producing any documentation that the department provided any services to any of the three special districts.

Figuring out a methodology for calculating a fair and equitable special districts administrative fee isn’t rocket science.  If town staff can’t come up with a methodology on its own, then the Supervisor should reach out to the town’s auditor who has already volunteered his assistance.  

That is, if he’s interested in an honest budget that treats all taxpayers fairly and equitably.

For more information about the special district charges and other town issues, visit www.yorktownbettergovernment.org.