City of Elmira 2021 Budget Proposal


November 13, 2020

 

Honorable Mayor Mandell, Deputy Mayor Joe Duffy, and Members of Elmira City Council:

To say 2020 will be a year that goes down in history is not an understatement.  We have been faced nationally with the COVID-19 Pandemic.  Our municipality, our employees, our families and our community have endured extremely trying times this year.  As a municipality, we have been faced with the specters of a reduction in sales tax monies and a reduction in AIM funding from New York State.  If these concerns materialize, both would create a financial hardship for our city.

We have taken steps internally to help offset these potential reductions.  In March of this year, we implemented a hiring freeze for all departments.  We reduced our Capital Budget by approximately $1.2 million.  We laid off School Traffic Officers in May once the Governor announced virtual school for the remainder of the 2020 academic year.  We decided to allow the Compost Center to remain closed for the season, and we implemented an essential spending only plan.  We will take similar steps in 2021, and pursue an essential spending only plan.

On a very positive note, the City of Elmira ended 2019 in the black and the City had a net profit of approximately $2.8 million.  This erased the remaining general fund deficit and afforded us a fund balance surplus of $1.5 million.  This accomplishment would not have been possible if it wasn’t for the collaboration of our dedicated Department Heads and employees.  The elimination of the negative fund balance of $3.1 million over the last two years is an exceptional achievement.  In addition, S&P upgraded the City’s rating to BBB- with a “stable” outlook.

 

2021 GOALS

The City of Elmira has several goals as we look to the upcoming year. These are:

 

  • To continue a strong and positive working relationship with Chemung County Government.
  • To investigate additional shared services with other municipalities.
  • To increase the City of Elmira’s general fund balance, and
  • To continue to provide City services to our residents in a professional manner.

BUDGET SUMMARY

 

Today, the City Manager’s 2021 Proposed Budget is respectfully submitted to the Elmira City Council and residents of the City of Elmira.  This budget has been prepared in accordance with Section 51 of the City of Elmira’s Charter.

 

The proposed 2021 Operating Budget is a comprehensive document that addresses the anticipated revenues and expenditures for all departments within the City of Elmira, including Animal Control, Assessor, Buildings and Grounds, City Chamberlain, City Clerk, City Manager, Code Enforcement, Corporation Counsel, Fire, Mayor and Council, Police and Public Works.

 

At a high level, the 2021 Operating Budget incorporates revenues of $38,571,122 and expenses of $38,571,122.  Please note that we are appropriating $450,000 of the General Fund balance to offset the 2021 proposed budget spending.

 

 

Operating Revenues

 

In 2021, I am proposing a very modest 1.97% property tax increase.  Generating revenue within the City is very challenging, as the majority of revenues come from taxpayers.  With the number of tax-exempt properties in the City of Elmira, 62% of taxpayers are paying 100% of taxes.  Additionally, sales tax is a major source of revenue for the City.  The sales tax is shared with us by the County.  Over the past several years until 2018, the allocation of monies between the City of Elmira and County of Chemung decreased, causing the City a significant loss in revenue.

 

For 2019 and 2020, in lieu of increasing our sales tax allocation, the City and the County came to an agreement that lowered our annual shared service payments for the Department of Public Works and Buildings and Grounds.  Over the two years, the City agreed to pay $500,000, and this significantly aided our financial results.  While the sales tax allocation will remain the same for 2021, the Buildings and Grounds staff are returning to the City’s payroll.  We look forward to working with the County in 2021 to propose a new Sales Tax formula that will facilitate continued improvement in City’s finances.

 

Furthermore, we continue our efforts to make the Elmira Water Board a department of the City.  As you are aware, a lawsuit has been filed and we are awaiting a decision.

 

 

 

 

Operating Expenditures

 

The Elmira City Council, Department Heads and City Staff are dedicated servants to the tax payers.  This proposed budget will maintain essential services to all residents.  The City Staff will continue to strive for more efficient and improved ways to do business to provide services to the City taxpayer.

 

It is very difficult to cut cost from a budget, when such a large proportion is personnel. Our employees are an asset to the City of Elmira and, over the years, department staffing levels have significantly decreased.  For 2021, we will continue to be on a hiring freeze, and filling of vacant positions will require the approval of the City Manager.

 

As I noted a few moments ago, this upcoming year, the County has decided to end our shared service agreement with Building and Grounds.  Therefore, I am proposing that all employees will return as City employees effective January 1, 2021.  This has caused an approximate $1.0 million increase in cost in the 2021 budget.  Upon the return of these employees, the City has an outstanding balance of $1.3 million dollars for services rendered to the County. In reflection of its awareness of the challenge that the termination of this agreement represents for the City of Elmira, the County has agreed in 2021 to reduce the $1.3 million dollar balance by 66% of total salaries that will be returning in 2021 and by 33% in 2022.  The payment of the outstanding balance will be negotiated in 2021.

 

Under the current health insurance plan, all employees will be transferring to the PPO 3 Excellus Blue Cross/Blue Shield Plan.  As the health insurance premiums on the PPO2 plan increased 6% for 2021, by moving to the PPO 3 Plan, we will see no rate increase and there will be no diminished health coverage with this plan.  Furthermore, the City will see a decrease in costs for health insurance from the County, in the form of a 0.5% reduction in the plan administration fee.

 

 

Union Negotiations

 

We are delighted to report that the City has negotiated a 4-year contract with the Elmira PBA, covering 2020 through 2023.  As a result, all four unions – the PBA, the EFFA, CSEA and the School Traffic Officers – are currently under contract.

 

 

ECONOMIC DEVELOPMENT

 

As you look around the City of Elmira, it is obvious that new development is occurring rapidly.  We are excited about this.  This has been the most growth within City limits in over two decades.

 

  • Lake Erie College of Osteopathic Medicine, LECOM, has opened and the school welcomed its first class of students this past July.
  • We are pleased to announce that the Gerard Block Apartment has opened 3 commercial spaces and 20 residential property on Lake Street.
  • Elmira Tea & Coffee House at 100 W. Water Street opened for business this year.
  • Walnut Street Bridge Rehabilitation will be completed by November 2020.
  • DRI projects that are underway include the Lake Street Pedestrian Bridge, Centertown Parking Garage, and Clemens Square.  The Lake Street Pedestrian Bridge and Centertown Parking Garage should both be completed in the Summer of 2021, while Clemens Square should be completed by the end of this month.
  • DRI Activate Building Funds supported 12 local business rehab and façade projects throughout the downtown district and will be completed at the end of this year.
  • Construction is underway at 110-114 Baldwin Street to convert these vacant buildings into mixed-use commercial and residential properties, featuring four commercial tenant spaces and eleven market rate apartments.  The project will be completed by Spring 2021.
  • Work on the West Water Street Downtown project began this past Spring and has ended for the season.  In the Spring 2021, work will resume, and we anticipate that the project will be completed by early Summer.
  • Six67 College Avenue Apartment Complex began construction this year.  Some of the apartments are scheduled to be ready by Spring 2021 to accommodate future LECOM students, and the remainder of apartments will be completed by the following year.

 

 

COMMUNITY DEVELOPMENT

 

In addition to economic development, the work of strengthening our communities continues.

 

  • The City’s 2021 budget will continue to include funding from the NYS Attorney General’s Office for neighborhood revitalization projects focusing on new policies and practices for Code Enforcement and neighborhood housing policy.
  • Community Development launched a Lead Hazard Reduction program in 2020 and anticipates providing at least 60 units with funding to address lead paint hazards.

 

 

 

 

2021 CAPITAL BUDGET

 

As noted earlier, we reduced our capital from last year by approximately $1.2 million due to COVID-19.  The capital budget for 2021 represents a total of $11,624,700 of investment, of which $8.9 million will be invested in our roads, bridges, and other transportation-related areas. Much of this investment is supported by grants from the federal and state governments.  We expect to borrow $3.98 million, an increase over 2020’s reduced borrowing amount.

 

Parks & Recreation                                                              $      105,000

Mark Twain Golf Course                                                      $      125,000

Transportation                                                                     $    8,968,600

Buildings                                                                              $      435,000

Emergency Services                                                            $      114,000

Fleet                                                                                     $   1,640,000

Management Services                                                         $        91,100

Downtown Revitalization Initiative/TAP                                $      146,000

 

Capital Spending Total                                                          $ 11,624,700

 

 

FUNDING FOR CAPITAL PROJECTS

 

State                                                                                    $    2,114,334

Federal                                                                                $    5,369,600

Community Development                                                    $       165,000

 

Grants Total                                                                         $    7,648,934

 

New Borrowing, Net                                                            $    3,975,766

 

 

 

BUDGET PROCESS

The 2021 budget committee consisted of Mayor Mandell, Deputy Mayor Joe Duffy, City Chamberlain Charmain Cattan, and myself.  After gathering input from department heads, the City Chamberlain and I met regularly during the summer months and then weekly with the full committee for the past two months.  Ideas, suggestions and recommendations were made by all committee members.

The proposed budget is the result of months of collaboration of the Budget Committee.  I would like to thank the entire Committee, especially City Chamberlain Charmain Cattan, for the many hours needed to prepare the City budget.

 

CONCLUSION

The environment within which the City operates today has changed dramatically over the years.  I am convinced that the new economic development within the City of Elmira will not only help Elmira to survive, but to flourish.  I look forward to being a part of the changes that are occurring not only in the City of Elmira, but within our broader community.

 

 

Sincerely,

 

 

P. Michael Collins

City Manager

See The Presentation here