Last-minute injection of funding from BPU leads to .8 percent property tax hike
JAMESTOWN – Jamestown property owners will see their taxes go up by less than one percent in 2013. That after the Jamestown City Council was able to make several key amendments to next year’s $33.45 million budget during last night’s work session and budget vote. In all, lawmakers were able to reduce spending in the mayor’s budget proposal by $233,700 while increasing revenue by $545,000. Those changes resulted in the city tax levy to fall from 6.4 percent to just over .8 percent – which would equate to a tax increase of 21 $0.21 per $1000 assessed value.
Ward 2 Councilman Tony Dolce (R-Ward II) says lawmakers were able to come up with several adjustments to help bring down the tax rate, including decreasing appropriation by $11,000 in the Department of Public Works central garage, $1,000 to the DPW District Heat bill, $3,000 from the city parking ramp and $35,000 from the city street lights fund. Dolce also said that $175,000 was taken out of the city’s workers compensation payment to the county, which will instead by paid for by the Board of Public Utilities. In addition, lawmakers reduced the budget by $8,700 by refinancing BPU debt from 4 to 2 percent.
As for the revenue increase, Dolce said the city would receive an additional $300,000 from the BPU electric fund surplus and $420,000 from the BPU’s water fund surplus – total $420,000. That was made possible thanks to action by the BPU earlier in the day. The city council also increased its 2013 sales tax projection by $125,000 – based on higher than expected sales tax revenue for the current year.
As Dolce noted, much of the adjustments came by way of the Jamestown BPU. The city readjusted its workers compensation formula so that BPU workers would have to pay an increased amount – based on the annual amount that the city is required to pay to Chautauqua County. Additionally, the city was able to use the additional $420,000 from the BPU water and electric revenues, after learning the BPU had a surplus of more than $5,000,000.
Jamestown Mayor Sam Teresi – who also sits on the BPU, explained why the city was able to receive the extra funding from the utilities.
“Under the state constitution and also under the state general municipal law, there’s language that allows municipalities that own and operate their own utilities to pay to the city an amount equal to what that utility would pay in all forms of taxation if that utility was owned by a private sector utility operator,” Teresi explained. “We’ve done that for years here in Jamestown with the tax equivalency payment. But there’s also companion language in the state constitution that reads and in addition to a tax equivalency payment a municipality can retain some of the profits of those utilities as the owner of those utilities.”
The final vote for the budget was 8 in favor and none against, with councilwoman Maria Jones absent from the meeting.