Purpose of Budget Review
The purpose of our budget review was to determine whether the significant revenue and expenditure projections in the Village’s tentative budget for the 2018-19 fiscal year are reasonable.
The Village of Suffern, located in Rockland County, issued debt not to exceed $5 million to liquidate the accumulated deficits in the Village’s general, water, sewer and capital projects funds as of May 31, 2015. New York State Local Finance Law Section 10.10 requires local governments that have been authorized to issue obligations to fund operating deficits to submit their tentative budgets for the next fiscal year to the State Comptroller for review while the deficit obligations are outstanding.
- Significant revenue and expenditure projections in the tentative budget are reasonable.
- The Village’s budget includes $2.6 million for health and medical costs. However, we project the cost to be $2.7 million based on an average increase of 8 percent over the last five years. Therefore, the health insurance cost are underestimated by $100,000 in the 2018-19 tentative budget.
- The Village budgeted $4.2 million in water meter and sewer revenue. However, based on collections of water and sewer rents in prior years, we estimate the 2018-19 collections will be approximately $3.9 million, which is $359,000 less than budgeted.
- The Village faces potential increases in salary and wages for collective bargaining agreements (CBAs) that have expired and the possibility of retroactive increases when these agreements are settled.
- The tentative budget includes a tax levy of $11,016,788 which is $78,962 above the limit established by law.
- The Village Board should consider the potential financial impact of the settlement of the CBAs when finalizing the 2018-19 budget.
- In adopting the 2018-19 budget, the Village Board should be mindful of the legal requirement to maintain the tax levy increase to no more than the tax levy increase to no more than the tax levy limit as permitted by law, unless it properly overrides the tax levy limit.