Follow the money: Margaretville village budget examined

Editor’s note: Catskill Mountain News writer Joan Lawrence-Bauer kicks off her series of articles on municipal finance this week with a look at the Village of Margaretville’s current budget.

By Joan Lawrence-Bauer
“Follow the money” is the mantra adopted by investigators of all stripes – from lawyers and detectives to journalists and accountants. So we’ve followed the money in the Village of Margaretville to see where it comes from and where it goes. It’s a complicated task.

For fiscal year 2012-13, the Village of Margaretville’s operating budget is $561,863. Of that sum, $324,094 will be raised by taxes, $47,769 will be revenues and federal and state aid such as AIM and Chips funding. The additional $190,000 will come from an unexpended fund balance of the previous year. (How the village had an unexpended balance of $190,000 in a year with the greatest natural disaster in its history is a story for another day.)

According to public records, there are 347 properties from which to collect the $324,094 needed this year, meaning that each property owner would have to pay $933.98 this year. Fortunately for taxpayers, one single property of the 347, the City of New York’s wastewater treatment plant, will pay a whopping 45 percent of that, or a total of $146,017.

Last year, the city paid $235,074 but their taxes were reduced after they won a court case alleging that they were being unfairly assessed on the property. With just $178,077 left to be raised in taxes, the remaining 346 properties need to pony up an average of $514.67 in taxes this year.

Assuming larger properties and commercial entities get higher tax bills, the rates charged to the average homeowner might seem manageable. But a closer look shows that this budget does not include the cost of water, which is budgeted and billed separately to users at a total of $117,289.
Nor does it include capital equipment purchases budget this year at $147,483. Add in those two numbers, and subtract a fund balance of $190,000, which can’t be assumed every year, and the picture does not look good.

Sticking with analysis of just the operating budget and just for one single year with no fund balance carried over, it’s pretty easy to see where the money goes and the figures are daunting.

Compensation to people doing village work makes up 51 percent of the budget. That is $287,189 which when divided by 347 properties equals $827.63 per property, to cover salaries, personal service funds, employee benefits, or work done by contractors like attorneys, engineers and other people who provide services.

The next biggest chunk is street maintenance of $79,493 ($229.09 per property) followed by $59,800 ($172.33 per property) to volunteer fire departments to pay for fire protection.
Again, it’s important to note, that for each of these numbers, 45 percent of the total is being picked up by taxes on the city’s wastewater treatment plant so the rest of the taxpayers are only paying 55 percent of those totals.

The budget is bare bones, no doubt about it, but even at bare bones rates, it’s hard to see how an aging population will be able to sustain it in the future. There is little developable land left in the village so new construction in the future is likely to be minimal. Many properties receiving services are tax-exempt churches and non-profit organizations. Discretionary funding in the budget is less than $15,000. Short of instituting fees for use of local parks and eliminating small but important recreational and cultural budget items, there really isn’t much room for improvement. Elected officials and business and community leaders will need to get pretty creative to ensure the viability of the village in the future.

If the picture is bleak in Margaretville, it’s bleaker in Fleischmanns. While the city helped fund the new sewage treatment system there, it insisted that the village be the ultimate owner of the facility. That means the city does not pay taxes on it. Without such a big and deep- pocketed taxpayer, village residents have to dig into their own pockets to cover the cost of operating their wastewater treatment plant. While reinvestment in its Main Street would help considerably, there too, new solutions must be developed to make the costs affordable for those who bear them.

Middletown, the town in which these two villages exist, is in the early stages of budgeting for its next fiscal year, which, unlike the villages, matches the calendar year. In the weeks to come, we’ll take a look at those budgets, along with Andes and Roxbury.