FROM MAYOR JOAN WALSH
October 1, 2008

ALERT ABOUT HARRISON’S FINANCES

Right now, the economy is the focus of attention for almost everyone.  By the time you read this, perhaps the bailout will have been approved, in one form or other.  Here in the Municipal Building, our attention is not only on the wider implications, but also what it means for the Town.  Folks in Washington are taking a lot of heat because they did not alert people or act quickly enough regarding the dangers.  So – I am alerting you now – alerting you to the Town’s current finances. We will meet our obligations, but the outlook is not a good one.

Most people think that the Town gets all its funds from real estate taxes.  However, those taxes are only part of our income.  We also get money from the sales tax, from the mortgage tax, from Building Department fees, from interest on money in the bank, and from Court fines.  As you no doubt realize, those sources of income will not bring in the amounts anticipated when this Budget was prepared last November.  That Budget  projected that we would receive the following revenue:
        REVENUE SOURCE                ANTICIPATED        ACTUAL to Sept 26th
        Mortgage tax                             $3,150,000                $1,878,000
        Sales Tax                                   $3,450,000               $1,683.798                          
        Interest on deposits                  $1.625,000                $   202,400
        Building Dept fees                    $3,000,000                $1,724,670
        Court fines and forfeitures       $   750,000                 $    567,049 (to July 31)                              
                       
                        Shortage as of Sept 26,2008                 $2.57 million
                        Anticipated Shortage year end:        $3.706 million

When I became Mayor in January, I realized that these projections would cause problems.  I immediately asked each Department to cut down on their spending. They did, saving over $351,000. I sincerely thank them. Since September 1^st, other than needed operating costs such as fuel and electricity, only emergency expenses have been approved, saving still more money.  Salaries are our biggest expense so we did not fill several planned positions, and did not fill other positions when employees retired.  However, the list of homeowners who have not paid their taxes is growing.  Even if they don’t pay, we still have to send the school and the county their share, for a cost to us so far this year of approximately $ 750,000 out of pocket. We thus have less income and higher costs, increasing our cash shortfall. Equally importantly, since 2006 our taxable assessed valuation has dropped by $4.4 million, due to a sluggish market and these economic times. There was a time when the tax base used to grow each year as new homes were constantly being built.  Not any more.  Lastly, this year we have been completing projects such as the West Harrison Streetscape, the Passidomo Park Pool and the Mintzer Annex. We issued bonds in the amount of $12,638,820 for those costs, and repayment starts in 2009. We will meet our obligations, but the outlook is not encouraging.

As we plan for the 2009 Budget, we have to consider all of the above. The housing market will still be slow so mortgage tax receipts will remain low, the consumer will still not be shopping so sales tax receipts will be down, interest rates will remain low, and few people will be building new homes or remodeling current ones.  The picture for income for us is bleak.  

And yet – raising taxes enough to cover all these shortfalls is not an acceptable solution.  Often I hear that a certain homeowner can’t afford the taxes and has to move, or that families are doubling up in order to keep the family home.  We want to keep our Harrison families in Harrison.

The only other solution is to cut costs.  We will continue our policy of not replacing employees who retire, and we will continue to cut spending wherever possible.
That won’t be enough to keep the tax rate down.  We have to consider cutting services.

At a meeting with Department Heads and Board members last week, it was suggested that we look at other towns and see what services we provide that others don’t.  One area mentioned was the weekly trash pick-up on Wednesdays.  Few municipalities do that on a weekly basis, opting instead for one day a month.  This would save on fuel as well as wear and tear on the vehicles. And would it be such a hardship on us?  Other towns charge $25 or more for pick-up of such items as refrigerators and washer/dryers. Since few of us use this service more than once every few years, it would not seem to be a hardship if we did this.

Our 2008 budget is just under $50 million. We are currently determining where we can create savings or increase income for 2009, but would welcome your suggestions. What are YOUR ideas for ways that the town can reduce costs?  We are not going to delay plowing snow during storms, nor stop helping people during flood conditions. We can delay repaving streets or sidewalks, but only for a year or two. We won’t reduce the Recreation programs as that would hurt children and families.  Almost everything else is on the table.

Please email me your suggestions at jwalsh@harrison-ny.gov, or drop me a note at the Municipal Building, Harrison, NY 10528.  All suggestions will be seriously considered.  And – thank you for your help.