At this point, it’s a foregone conclusion that Pelham village officials will approve a budget that goes over the 2.3 tax levy cap mandated by the state.
The only question that remains is how much over the cap the spending plan will when the board approves it later this month.
Village board members met Wednesday for a workshop and came up with a rough draft for a $13 million budget that would represent a $446,491, or 4.6 percent, increase to this year’s tax levy.
“What’s making this whole thing so difficult is that we’re paying more than $1.4 million in mandatory pensions on a $13 million budget,” said Mayor Edward Hotchkiss.
The $1.4 million in pension costs is about $47,000 more than this year’s payment, which Hotchkiss called highest in the village’s history.
“We weren’t expecting this,” Robert Yamuder, the village administrator, said of the pension costs. “All the pundits were saying otherwise and then we get hit with this.”
Going into Wednesday’s workshop, the board had put together a draft budget that would have increased the tax levy by about $382,082, or roughly 3.75 percent.
The board was able to whittle that number down by adding $41,000 in targeted revenues and other reimbursements on Wednesday. But they also made a number of additions that caused the tax levy to increase again.
First, the board added $25,000 for additional police overtime.
Hotchkiss said that $250,000 had been budgeted for police overtime in this year’s budget, but it’s likely the department will go over that.
“This year, it looks like it’s going to be [about $275,000] anyway,” Hotchkiss said. “For next year, just in case we need it, we want to put it in.”
The board then decided to borrow $500,000 to fund road maintenance, buy a at a cost of no more than $50,000, purchase fire equipment mandated by the state and federal government and purchase a multi-use sidewalk tractor for the department of public works.
Hotchkiss said the village would borrow the money using five-year bond anticipation note. The first payment of a little more than $100,000 would be made on the note next year. Hotchkiss added that the village can always pay the note off early if things improve from economically.
Trustee Joe Marty said the board can easily keep the tax increase under 4 percent, but it would come at the expense of not doing any extra road maintence, by not providing the police department with equipment to conduct surveillance and by not buying equipment for the department of public works.
"We chose to do those three things," Marty said. "We don't live just to pay salaries, pensions and healthcare. There are other services that we have to provide and these are it."
Although the state calls for a 2 percent tax cap, but the Village of Pelham’s cap figure was increased to 2.3 percent due to exemptions for categories such as pension and capital expenses.
In order for the village to go over the 2.3 percent cap, a supermajority, or 60 percent, of the village board must approve the budget. Although a public hearing was held for the resolution allowing the board to override the tax cap, village officials have yet to vote on it.
The board is scheduled to adopt a final budget on April 24.