Since November, village staff has been contending with the ongoing pandemic’s negative imprint on the 2021-22 budget. Like many nearby municipalities, Scarsdale has experienced a budget gap that would need to be plugged up with increased property taxes, service reductions, capital project deferrals, increased borrowing or the use of fund balance.
Following several hours-long work sessions and a discussion of the village’s first pass budget last week, Village Treasurer Ann Scaglione presented the second pass budget Feb. 2.
The $60.3 million budget included some small expenditure savings and a decrease in the tax levy by 0.5%. Assistant to the village manager Aylone Katzin also highlighted some new potential fees and fee reductions that could net the village an additional $90,750 in revenue.
The second pass budget proposes a $208,665 decrease in expenditures and $58.5 million in revenue. Like the first pass, the second pass budget also uses $2.25 million from the fund balance.
Last week, Scaglione presented the first pass budget, which included an increase in departmental and nondepartmental expenditures by 2.2%, or $1.3 million to just over $60 million. Revenues were expected to increase by 0.3% or $172,764 to $59.9 million.
The revenue discrepancy between the first and second pass budgets is due to a portion of the tax levy being automatically split into a property tax increase. While the first pass budget showed a $635,952 budget gap, that included a $1.4 million increase in real property taxes collected.
Unlike the first pass budget, the second pass budget includes the entire expenditure/revenue gap in the tax levy (see chart). Between the first and second pass budgets, the tax levy decreased from $2 million to $1.8 million.
Unlike the first pass budget’s tax levy increase, the second pass tax levy increase is slightly under the tax cap.
If the village were to raise taxes to cover the budget gap, the tax levy would increase by 4.87% and an average homeowner with an assessed property value of $1.5 million would see taxes increase by $249.12.
The village input numerous adjustments to lower expenditures in the second pass budget. The adjustments included a $20,000 decrease in life insurance, an $80,120 decrease in serial bonds, a $58,156 decrease on serial bonds interest, a $10,000 decrease on bond anticipation notes, and a $50,000 decrease in planning, managing and developing the Freightway garage.
Originally, the first pass budget included $100,000 in the nondepartmental budget for Freightway planning, management and redevelopment services. The village has a separate line item in the attorney’s budget for Freightway’s legal expenses, which is also expected to decrease by $25,000 to $75,000.
Village Manager Steve Pappalardo said anything related to the Freightway development project could be funded through the line item including, for example, the type of analysis performed by Desman Design Management last October.
“We haven’t had a discussion recently about developing that site, so cautiously I felt like we could cut that number in half,” said Pappalardo. “I felt like I needed to leave some [money] in there in case the board … is interested in rekindling that. I just felt like we should have some money there in case that happens.”
Trustee Jonathan Lewis said he was supportive of the reduced funds in the Freightway line item and said he would support further reductions.
Trustee Lena Crandall disagreed with Lewis, arguing that having the extra funds would allow the board the possibility of exploring options for the Freightway site with community input.
To bolster revenues, Katzin presented the board with proposals for two new fees — a banner fee and a special event fee — and four revised fees, including an engineering hourly inspection fee, a building permit fee, a neighbor notification fee and a merchant’s lot permit fee.
The banner fee would establish a $100 one-time fee to hang a banner at the intersection of Post and Crane roads and a $50 fee to hang banners in Chase Park. If an organization or person plans to hang multiple banners throughout the year, the cost would be $200 for the Post and Crane roads intersection and $100 for banners in Chase Park.
Katzin said requests for nonvillage banner hangings have been increasing over the last four years. In 2020, the village had 53 requests for banner hangings, up from 32 in 2016.
“I feel comfortable coming to the board … looking for some restitution to recover some expenses,” said Pappalardo.
Crandall said she supported the increase but suggested the Chase Park fee be equal to the fee for Post and Crane roads because of the soil compaction and wear and tear on the park grounds when a banner is hung.
She also suggested having higher fees for nonresidential organizations who would like to hang a banner.
Trustee Justin Arest suggested a conference with village attorney Dan Pozin, as he was concerned about introducing a tiered system for nonresidents and any constitutional implications that might pose.
Katzin also suggested a special event permit fee which would range from $25 to $200. For example, a permit for a single street event with a single road closure would be $100, or using spaces in a village-owned permit lot or metered parking lot for an event would be $25 per space.
Protests and demonstrations or fundraising events involving school or youth groups wouldn’t be charged for a permit.
Katzin presented multiple revisions to the village’s fee structure, including increasing the engineering hourly inspection fee from $65 an hour to $100 an hour, increasing the neighbor notification fee from $50 per list to $100 per list and increasing the merchant’s lot permit fee from $975 annually and $530 semi-annually to $1,100 annually and $600 semi-annually.
Building permit fees also had a proposed increase from $100 plus $17 per $1,000 for a construction cost between $1,001 and $4,999,999 and $86,000 plus a fee set by the board for construction costs above $5 million, to $100 plus $18 per $1,000 or fraction thereof over $1,001 for a construction cost between $1,001 and $4,999,999 and $91,000 plus a fee set by the board for construction costs above $5 million.
Arest said although he had been an advocate for raising the merchant lot permit fees in the past, he was conflicted about that option now, due to the pandemic.
“[Are] we better off making that entire open area a commuter lot and removing the merchant spots, moving them inside the commuter facility and increasing the number of spots available?” Arest asked.
Pappalardo said the village would “almost come full circle” if they removed the merchant spots since a previous board had decided to move merchant spots out of the Christie Garage and onto a designated area on East Parkway when the spots became popular among merchants.
“We’ve got flexibility and now we’ve got less commuters that are coming to work so we’ve got space in Christie right now,” said Pappalardo.
Citing the pandemic’s strain on retail business, Crandall said she was uncomfortable raising the fee for merchants and suggested postponing a fee increase to the following year.
The next budget work session will take place on Feb. 10.