A 2012 East Hampton Town budget totaling $65.6 million was submitted by Supervisor Bill Wilkinson on Friday. It calls for a slight increase in spending of 2 percent, but would result in a tax decrease for residents of both the town and the village.
Should the budget be passed as proposed, the tax rate for town residents would be $26.58 per $100 of assessed value, a savings of $2.32 for a house with a $500,000 market value, and a savings of $8.12 for owners of a $1.8 million market-value house.
Village residents, who are not taxed for all of the town services, would see a 9.3-percent tax decrease next year under the proposed budget, at a rate of $11.10 per $100 of assessed value — a $46 tax savings for a $500,000 house and a $161 savings on a $1.8 million house.
The budget calls for staff and service cuts enacted this year to be maintained, including the discontinuation of the Highway Department’s leaf-pickup program and the closing of the Springs-Fireplace Road recycling center one day a week.
It eliminates over $1 million budgeted this year for the operation of the scavenger waste treatment plant, anticipating that the town will stop operating the plant itself, through an outside contractor, and instead lease it out to a private entity.
The increase in spending, according to the supervisor, is due primarily to increased employee costs.
Payments toward debt from bonds issued to cover a $27.3 million deficit incurred under the previous administration accounts for over 6 percent of the tax rate for town residents and over 8 percent of the tax rate for village residents, according to the proposed budget.
The budget uses surplus money in the highway and sanitation funds to provide needed revenue. Of a projected highway fund surplus of $2.1 million at the end of this year, next year’s budget would appropriate $705,000, leaving $1.4 million as surplus. In the 2011 budget, $1.1 million of the department’s accumulated surplus was appropriated for spending. That appropriation was questioned by Scott King, who is running for re-election as highway superintendent on the Democratic line. Mr. King has said that, with a moratorium this year on capital budget spending, extra money outside the department’s operating budget could be needed to replace aging equipment.
In his budget message, Mr. Wilkinson said that in the coming months he plans to propose a three-year capital improvement plan and budget “to address plant, equipment, and the future infrastructure needs of the town.”
In next year’s Sanitation Department budget, $1.1 million would be appropriated from a surplus that is projected to reach $3.5 million by the end of this year — 61 percent of the department’s overall budget.
The budget proposal notes that the state comptroller has advised that surplus money not used for annual expenses should be maintained at “reasonable levels,” and otherwise used to reduce the tax levy. The town has a policy of maintaining a 20-percent surplus in each fund, and, according to the budget message, the surplus appropriations in the highway and sanitation funds move the totals closer to that level. The Highway Department’s surplus, anticipated to be 37 percent of the department’s budget at the close of 2011, would be at 26 percent at the end of next year.
In the town’s two general operating funds, the administration says it expects a $3.1 million surplus at the end of this year, and a $3.3 million surplus at the end of 2012. Anything above a 5 percent surplus must be used to pay down the bonds issued to cover the deficits in those funds.
` Mr. Wilkinson’s proposal also calls for the sale of East Hampton Town’s 50-percent share of the Poxabogue Golf Center to Southampton Town, its partner in the $6.4 million purchase in 2004.
The $2.2 million sale will enable the town to make payments on the debt for the property of about $180,000 a year for four years, and then to pay off the bond in full. That will save the town $100,000 in interest, according to the supervisor.
The town board is expected to pass a resolution authorizing the sale at its meeting tonight. Southampton Town will use its community preservation fund to buy East Hampton’s half of the site, thus ensuring its preservation.
The town board, which has not yet held a public discussion of the supervisor’s budget, must prepare a second draft, or preliminary budget, on which it must hold a hearing by Nov. 15, and adopt a final budget by Nov. 20.