Steuben County 2020 Budget Message & Summary

Jack K. Wheeler, MPA

County Manager / Budget Officer

As always, the development of this budget is a team effort, and many individuals deserve recognition for their assistance:


  • All Legislators, Specifically the Finance Committee:

Scott VanEtten, Finance Chairman

Gary Swackhamer, Vice Chairman

Kelly Fitzpatrick

Gary Roush

Robert Nichols

  • Joseph Hauryski, Legislative Chairman
  • Carol Ferratella, Legislative Vice Chair
  • Finance Department:

Pat Donnelly, Commissioner

Tammy Hurd-Harvey, Deputy Commissioner

  • Chris Brewer, Deputy County Manager
  • All Department Heads

In addition to these elected and appointed officials, it’s critical to note that it’s the staff of Steuben County that are responsible for implementing these spending plans and they do a tremendous job year in and year out.

2020 Budget Message to the Steuben County Legislature



EXECUTIVE SUMMARY


The proposed 2020 Steuben County Budget adheres to the fiscal policy set by this Legislature – to maintain critical services and infrastructure that our residents depend upon, while also funding State-mandated programs. This budget accomplishes those goals with a minimal increase in the tax levy, well under the Property Tax Cap limit, and another decrease in the average tax rate. At a time when New York State continues to fiscally and operationally pressure municipalities, it is a credit that this Legislature and our staff have been able to incorporate those costs into the budget without overburdening the taxpayer.


The development of this budget was significantly more difficult than recent years. In 2020, the trend of Public Safety as a cost-driver continues, with increased staffing and cost to comply with criminal justice reforms mandated by New York State. Coupled with a change in medical service providers at the County Jail, Public Safety and court-related cost centers account for the largest expense increases in the 2020 budget.


To help offset these costs, we were able to anticipate additional revenue, particularly in sales tax, as actual collections continue to outpace prior year budgets. Without the ability to recognize additional revenue, the proposed budget would have carried a much larger increase or necessitated cuts in services.


In all, the 2020 budget is a fiscally responsible plan that strikes a balance between the needs of the organization and the interest of the taxpayer. It is through the guidance and hard work of our Legislators and the collaboration of department heads and staff that such a reasonable budget can be presented for your consideration.

TOTAL BUDGET

The total proposed budget for 2020 is $197,130,584, representing an increase of $6,089,229 or 3.19% in total expenditures. This increase can largely be attributed to growth of public safety and court costs, specifically within the District Attorney, Public Defender, and Jail, plus additional programmatic needs within Social Services.


Fortunately, projected revenues have also increased for 2020, totaling $146,605,245, an increase of $5,553,005 or 3.94%. This growth is primarily the result of increased sales tax anticipation, and additional state and federal reimbursement.


While there have been significant increases in both expenses and revenue over the past five years, a majority of these changes reflect capital projects in the Landfill and accounting for municipalities’ shares of sales tax, which do not impact the tax levy (net cost). With that in mind, and as indicated by the tax levy, this Legislature has essentially held the line on expenditures and the resulting tax burden.

The following table details the five-year history of total budget figures:


BUDGET COMPARISON BY CATEGORY

For 2020, we are projecting changes in the net (county) cost by operational category. The following chart displays the anticipated cost differentials in comparison to 2019, in descending order by change in net cost. A more detailed narrative of significant changes is provided here:


For the third consecutive year, costs within the Public Safety have increased at a greater rate than any other budget category. This is due to both enhanced state requirements and local decisions made by this Legislature to invest in additional law enforcement resources. This cost category has grown on average $982,269 or 4.54% per year since 2016, as demonstrated in the graph below


Conversely, the county cost of other large budget categories, particularly Economic Assistance & Opportunity and Transportation, have increased at a much lower rate. For Economic Assistance & Opportunity, costs have increased in 2020, primarily due to changes in foster care programs at the federal level. However, the five year trend for this category shows an average growth of $1,113,363 or 1.62% per year.


Finally, the County continues to be successful in improving our transportation infrastructure overseen by the Department of Public Works. In 2020, there is a marked decrease in overall spending levels, attributed to the sunset of augmented Pave NY funds. Still, this Legislature has invested significant sums in the Transportation budget category, and continues to do so in 2020. Within this category, the five year average local cost trend has been $10,507 or 0.05% per year.



Staffing Levels

County personnel remain both our most important asset and our largest expense, and as such, administration and this Legislature maintain a careful watch of staffing levels. The 2020 budget includes the addition of ten positions in comparison to 2019. This continues a concerning trend of the past four years, with the requirement of additional staff to meet the demands of the State, namely in Hurrell-Harring compliance, Raise the Age, and most recently, criminal just reform. Over the past decade, staffing levels were reduced through attrition and the sale of the Health Care Facility, but that trend has reversed and must be closely monitored in the coming years.

MAJOR CHANGES IN THE 2020 BUDGET


Criminal Justice Reform


While 2018 and 2019 marked the implementation of Raise the Age, the sweeping criminal justice reforms, enacted by New York State this past legislative session, will have more severe budgetary consequences for Steuben County in 2020 and beyond. This is the result of the haste in which the state passed these laws, with no input from counties who must implement the reform, and certainly no additional funding to pay for staffing and equipment to achieve compliance.


The requirements have been well-articulated by District Attorney Baker, specifically a severely fragmented timeframe to produce discovery material to defense counsel, resulting in the need for additional staffing to compile and disseminate these records. These changes dramatically impact the workflow and processes of the office, but with additional staffing incorporated in this budget, the department should be able to respond to the demands. Below is a listing of the new positions created and funded in the 2020 budget.

The other major component of criminal justice reform is the implementation of cashless bail, meaning most individuals will avoid incarceration in our County Jail, instead being issued an appearance ticket, except for the most serious and violent of crimes. The Governor and some state Legislators have argued that the reduction in inmate populations will cut local costs to a significant degree; enough in their estimates to offset the increases in District Attorney costs. While savings may materialize in the coming years, there is too much uncertainty to confidently budget for such large reductions in Jail expenses. More conservatively, we have zero-based two vacant full-time Correction Officer positions and five vacant part-time Correction Officer positions for 2020, resulting in a reduction of $338,436 in salary and benefit costs.

Sheriff / Jail


The 2020 budget continues the trend of large increases in Public Safety, specifically in the Sheriff’s Department and the Jail. In recent years, this Legislature, with the direction and leadership of the Sheriff, has invested in additional law enforcement officers to combat the opioid and drug epidemic. However, we confronted an unexpected development in late November 2018, with the New York State Office of Court Administration leadership informing the County that we must immediately implement counsel at arraignment reforms that we were previously told we had a number of years to establish. To achieve compliance in the most practical and cost effective manner, this Legislature created five additional Deputy Sheriff positions at the beginning of 2019, funding four of them, to effectuate transports of arrestees to the centralized arraignment court in Bath. While we entered into agreements with the cities of Corning and Hornell for partial reimbursement, these hires represent an additional cost of $325,878, which was not budgeted in 2019. As a result, this staffing increase is the primary reason for the 13.06% growth in the 2020 Sheriff’s department local cost.


The Jail also experienced an operational change with a large budgetary impact for 2020, namely the resignation of the Medical Director and our inability to hire Nurse Practitioner staff. As a result, an RFP for medical services was issued and awarded in recent months. While we were able to zero-base many of the Jail medical positions and eliminate the prescription drug line, as this is now part of our new vendor contract, the net budgeted cost of this change is $837,802. To further compound the fiscal pressure at the Jail, we have experienced a reduction in the number of federal inmates in transit that we house under contract for the U.S. Marshals. As a result, anticipated revenue has been reduced by $492,500. With all of these factors taken together, the local cost of the Jail has increased $997,777 or 13.37%.




Hurrell-Harring Compliance


2020 marks the second budget year in which the direct impacts of indigent defense reform are reflected in our spending plan. As previously discussed, the NYS Office of Indigent Legal Services (ILS) has established three main areas that we as a County must focus our efforts toward and for which the State will reimburse our costs: Caseload Reduction, Quality Improvement, and Counsel at First Appearance. This is the second year of a five-year implementation plan, with reimbursements increasing each year, topping out at approximately $1.6 million in 2023.


Only the Public Defender, Conflict Defender, and Assigned Counsel (administered by the County Attorney) are eligible for state reimbursement of costs. Any fiscal impacts of this system change upon the District Attorney, Sheriff’s Department, or any other County agency will be ineligible for reimbursement and therefore are a direct County cost.

Below is a summary of the additional expenses for Hurrell-Harring Compliance, which are fully offset with budgeted state reimbursement.


Public Works / Highway


For decades, the Steuben County Legislature has supported the maintenance of roads, bridges, and machinery in Steuben County, and this commitment continues in 2020. The County is responsible for the maintenance of approximately 680 miles of roads and 189 bridges on County roads, in addition to supporting shared service work for Town and Village roads. This is not only a benefit to our residents, but to economic development and quality of life initiatives. Notable in 2020 is the sunset of enhanced Pave NY funds, which results in the reduction of capital expenditures for road construction and associated revenue of -$1,011,150, while other operational line items have been funded at similar levels or greater. With these major changes in mind, the overall Public Works – Highway net costs have increased $700,526 or 3.89% in 2020.

Equipment & Capital Projects


The 2020 budget also incorporates a continued investment in the procurement of equipment and execution of projects to help the County function in an efficient manner. The draft budget includes a County cost of $143,071 for Minor/Small Equipment (less than $3,000) per item, with significant portions allocated to the Public Works ($47,900), the Jail ($21,870), and the Sheriff’s Department ($15,750).


The proposed budget also includes a large allocation for Major Equipment (more than $3,000 per item), most of which are replacement of vehicles and equipment. The total County cost for Major Equipment is $2,034,000, with the majority of funds going to Public Works ($1.2 million), the Sheriff’s Department ($391,000), Elections ($128,000), and the Jail ($59,920).


The 2020 budget also includes $1,239,370 in County cost for general fund capital projects. This includes $720,000 in projects for Buildings & Grounds (paid through the Building Renovation Reserve), $535,220 for Information Technology equipment and projects, $100,000 for future voting machine replacement, and $416,350 for the local share of two major bridge replacements in Cameron and Erwin.


Landfill

The Steuben County Landfill is a great example of self-sufficient service, operating as an enterprise fund, outside of County general fund appropriations. While competition for refuse is always prevalent, our managers and staff, under the direction of the Public Works Committee and Legislature, have done an excellent job both maintaining and growing waste sources. This ensures that the Landfill division has sufficient revenue to invest in equipment and infrastructure to keep pace with current demands, while planning for future expansion. Unlike many other publicly-owned solid waste operations, Steuben also encumbers funding to pay for long-term post-closure costs, many years in the future. In all aspects, the Landfill is a benefit to the County and its taxpayers.


COUNTY REVENUES


Sales Tax


Sales tax is always a critical component of the budget, and this fact is highlighted for 2020. During the past session, the New York State Legislature passed laws closing the loophole for third-party sellers on internet websites such as Amazon, Etsy, and others. This provides counties with an additional local share revenue stream, estimated to be worth more than $500,000 for Steuben County. It should be noted here that the Legislature and Governor gave in one hand, but are taking with the other, withholding county sales tax dollars to pay for cuts made to AIM, making local municipalities whole. In our case, this is approximately $235,000 taken from our sales tax collections to pay for a state obligation. While it has been framed as cost neutral to counties, it is an actual reduction in revenue due to us, and a very dangerous precedent of using growth in County sales tax to fund a State expense.


With that said, our year-to-date sales tax collections are up 1.01%. The Legislature has historically approached sales tax forecasts conservatively, as downturns can arise quickly and with little warning, creating a structural budget deficit. This has resulted in flexibility to appropriate additional sales tax revenue within the budget, providing some much needed cushioning of the dramatic increases in expenses we are projecting. With that said, the draft budget has increased anticipated sales tax collections by $2,000,000 in 2020, totaling $31,022,000. The following chart displays budgeted sales tax revenues for the last five years:


Fund Balance

The tentative budget includes a General Fund appropriation of $6.34 million for 2020, which is level in comparison to 2019. In addition, there is an appropriation of $620,000 in D Fund balance (Highway), and an appropriation of $40,000 from the Economic Development Fund Balance, both level with 2019 allocations. All of these appropriations are reasonable and assist in the overall management of funds.

Interest Earnings

Interest earnings continue to be strong for the County, which provides much needed revenue in a difficult year. With earnings on the rise, we have anticipated an additional $240,000 in interest earnings for 2020, for a new total of $1,200,000.

Property Tax Levy & Rate


With thorough review and guidance by the Finance Committee and the Legislature, and the tremendous efforts of our department heads and staff, the 2020 budget carries a minimal tax levy increase. While we were successful in reducing the tax levy for three straight years coming into 2020, the expansion of costs forced a modest levy increase.


The proposed 2020 tax levy represents an increase of $536,224 or 1.07%, well within the parameters of the Property Tax Cap, or approximately 30% of our allowable limit.


In addition, for the seventh consecutive year, the proposed budget shows a decrease in the average full value tax rate. The average rate for 2020 is estimated at $8.07 per thousand, representing a decrease of -2.18% from 2019 levels.

The property tax collections and average full value rate for the last five years are as follows:


Room Tax

The collection of room tax remains a critical dedicated revenue source for Steuben County which serves to fund our tourism promotion agencies. These organizations, most notably the Steuben County Conference and Visitors Bureau, work diligently to attract tourists and promote the quality of life and experiences available in this county.

For 2020, we are projecting close to $50,000 in revenue growth, largely attributable to additional funds from our recently enacted voluntary collection agreement with AirBNB. Total anticipated room tax revenue for 2020 is $975,000, all of which is distributed to our tourism-focused agencies as shown in the graph.


Local Impact of State Mandates

As always, it is important to highlight the local impact of State mandates. As well documented by the New York State Association of Counties, the nine largest State mandates account for approximately 90% of Steuben County’s property tax levy. This does not factor in the cost of the more recent State reforms that were discussed above, or the significant cuts in reimbursement for Public Health, Probation, Social Services, and others in the past two decades.


New York State relies upon local sources of revenue to fill their budget gap every year; at a massively disproportionate rate in comparison to other States across the country. So when the Governor and Legislature bemoan the property tax burden in New York, it can be directly attributed to their reliance upon local government to help fund state operations through property taxes.


CONCLUSION

With a slight increase in the tax levy and a reduction in the average tax rate, the 2020 Steuben County Budget is compliant with the NYS Tax Cap and is a responsible fiscal blueprint for the coming year. Budget development was much more difficult than in recent years, but with the input of talented Legislators and staff, we have created a solid spending plan.


While we have weathered this storm, there are many challenges ahead, particularly with the never-ending pressures coming from Albany. In 2019, it was enacting criminal justice reform; for 2020 and beyond, it is too early to predict. However, if the trends of the past decade continue, counties will face additional operational responsibilities without commensurate funding attached. As staff, we will continue to monitor, keep this Legislature apprised, and respond in the most responsible manner that we can.

REQUIRED REPORTING