Earlier this week, The Batavian asked Batavia City Manager Martin Moore to explain the $700,000 shortfall in the 2020-21 budget, considering that the loss of VLT (video lottery terminal) funds from Batavia Downs Gaming amounted to much less than that at $440,789.
The current budget proposal calls for a 7.48 percent property tax increase to City residents and has City Council considering a vote to override the state's 2 percent tax cap at its March 9 meeting.
Prior to Councll learning about Gov. Andrew Cuomo's intention to take the VLT money from municipalities and include it in the state budget, Moore's budget called for a 0.97 percent tax hike.
Moore sent back the following email in Q&A form on Thursday evening:
Q. How short are the City’s revenues compared to its expenses?
A. $700,000 (This figure is rounded. The actual amount is $698,329).
Q. Why $698,329? I thought the amount of VLT funds the State is trying to take is $440,000.
A. The City is facing two (2) hits to its revenue:
-- The loss of VLT funds: $440,789.
-- A reduction in the use of unassigned funds (Workers’ Compensation unassigned funds): $257,540.
-- Total shortfall: $698,329
Q. What are unassigned funds?
A. Unassigned funds: Funds in City accounts that are not approved for use in the budget, but are still accounted for. Unassigned funds are monies left over after a previous fiscal year(s), that are either kept in reserve to pay for cost overruns in the next year or are used to pay for capital improvements, replenish reserves, or to balance the budget.
Q. How many years has the City been using unassigned funds to balance the budget?
A. I have verified the use of unassigned funds for the use for at least the past eight (8) years.
Q. What is the original amount of unassigned funds that the City Manager was asking approval to use in the General fund budget?
A. In order to avoid overriding the tax cap, the City Manager originally recommended that the City use $741,640 of uncommitted funds. These funds would have come from:
-- $259,100 of General unassigned funds;
-- $225,000 of Water unassigned funds;
-- $257,540 of Workers’ Compensation unassigned funds.
Q. Why is the City reducing its use of unassigned funds by $257,540?
A. The City of Batavia is self-insured with both our Workers’ Compensation and Health Insurance programs. As a result, major illnesses or accidents can require the City to pay for claims out of City funds. While this is less expensive than buying prepackaged insurance, it does require the City of Batavia to maintain a reserve of funds in the case a major illness or accident happens during the fiscal year.
With the City being hit by the loss of VLT revenue, it is highly important to avoid any more cuts to other General Fund programs should we be hit with a large worker’s compensation claim(s). Therefore, I have strongly recommended that we leave the Workers’ Compensation funds alone and not use them.
