BETH YOUNG PHOTO
Southold Town Supervisor Scott Russell (left) discusses the 2011 town budget with deputy town supervisor Phillip Beltz Friday.
A tax increase is inevitable for Southold Town residents next year, Southold Town Supervisor Scott Russell says, but he believes it will be lower than tax hikes in the past two years. The supervisor is now working on his 2011 town budget proposal, which he must submit to the Town Board no later than Sept. 30.
Mr. Russell said Friday in an interview that next year the town must honor obligations that kept this year’s tax increase to 8 percent. In 2009, tax revenues collected by the town went up nearly 10 percent from the year before.
Next year, Mr. Russell expects the town will have to pay $900,000 more than it did last year into New York State’s pension system, due to the flat performance of the markets in which retirement funds are invested. That will bring total pension costs to $3.4 million — nearly 10 percent of the town’s current $36.6 million operating budget.
Municipal workers statewide are entitled to pensions that are not based on the performance of the markets and funds in which they are invested. Municipalities are required to make up that difference. The state is currently revamping its pension system, but current workers will be entitled to the plans they were promised when they were hired.
Mr. Russell said he intends to honor a commitment he made last year during contract negotiations with the town’s Civil Service Employee Association to not lay off any workers and to give existing workers a 4 percent pay hike next year after their wages remained stagnant this year.
“We asked CSEA last year to forgo increases. We were ready to lay off 17 people. They agreed to waive salary and step increases last year and we agreed to provide 4 percent this year and no layoffs,” said the supervisor. “We intend to uphold those obligations.”
Mr. Russell said that the town’s full-time work force has shrunk to 150 employees, down from 161 when he took office three years ago, primarily because the town has not filled the positions of employees who have retired.
But with five highway department employees retiring this fall, after that department lost four workers in the past two years, he anticipates having to rehire or move workers from other departments into the highway department. He said that the police force is also working with a minimal staff and will likely need more officers next year.
“How many people they need and how much I can afford are two different things,” he said. “I wish we had the money to hire the personnel we need.”
Revenues other than those from taxes have remained stagnant, Mr. Russell said. He will plan on $1.2 million in mortgage tax revenues next year, down from about $6 million at the height of the real estate market in 2007. Most of the town’s other fees are also land-use based, and have also been stagnant since the real estate meltdown.
“We’ve taken the hit already,” he said of his conservative projection for next year’s revenues. “It’s a bad economy sustaining itself. Last year’s board knew no reason to be optimistic. Now it’s just operating on austerity.”
The town’s strained finances are just one sign of the floundering economy. Southold recently received 50 applications for a part-time clerk typist position in the recreation department and many of those job-seekers were highly qualified, said the supervisor. Suffolk County is expanding the number of hours it will offer career counseling at the town’s Human Resource Center on Pacific Street in Mattituck next Monday, after the town was flooded with requests for career assistance.
“People that work here are lucky to be here every day,” the supervisor said of town employees.
The town is at an impasse in negotiations with the Police Benevolent Association, whose members have been working without a contract since last year.
Mr. Russell said that he hopes PBA members will agree to pay 5 percent of their medical insurance premiums and forgo raises for one year, as the CSEA agreed to do last year.
“I can’t ask one union not to take raises and not ask another,” said Mr. Russell. “The PBA was amenable to a small pay increase.”
Mr. Russell said that negotiations broke down earlier this year over his request that police pay some of their own medical insurance costs.
Mr. Russell said his draft budget will not include any fee hikes, but he plans to discuss increasing the $6 beach sticker fee with the Town Board next month. It would be up to the board to decide whether or not to include the fee in a final budget.
“Fees are just another word for taxes. I think the public is smarter than that,” said the supervisor. “The beach permit fee hasn’t increased in years. We need to commit resources to beach management. We need to be better stewards.”
“Some people think they’re not getting a lot for their taxes, but we’re running a government with no money,” he added. “There’s nothing sexy about this budget.”
The budget must be adopted by the board by mid-November, after a public hearing the first week in November.