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Guilderland Archives The Altamont Enterprise, September 9, 2010
As town faces higher pension payments, super says workers won’t get raises
By Anne Hayden
GUILDERLAND Republican Councilman Warren Redlich hopes Supervisor Kenneth Runion will have a more transparent budget process for 2011 than he did for 2010.
He is concerned, with decreased sales tax funds and increased pension payments, that the town will run out of money in 2011.
But Runion says that, with belt-tightening across the town’s departments and workers’ willingness to forego raises, taxes won’t have to increase.
The state comptroller recently announced that contributions from municipalities to the employee retirement system are expected to increase from an average of 12 pervent to 16 percent in 2012, according to a release from Thomas DiNapoli.
Since the state’s investments have been battered by the economy, individual municipalities will have to pay a greater share of their workers’ pensions.
For the town of Guilderland, which has a budget of $30 million this year, that could mean an annual pension contribution increase of $500,000, according to Redlich. He said the 2011 budget should take the increase into consideration. Redlich raised the same concerns when the 2010 budget was drafted, but Runion said, at that time, that Guilderland’s budget was lean enough to handle the increases when they came.
Redlich, one of two Republicans on the five-member town board, and Runion, a Democrat, have frequently sparred on a range of issues.
Runion told The Enterprise the same thing this year about the 2011 budget.
“We have always had the ability to meet the increases through proper budgeting and belt-tightening within the town itself. Our retirement contributions don’t come from just the general fund, so it’s spread out,” Runion said. Some of the pension contribution money comes from the water, sewer, and highway funds, he said.
A new state law was passed earlier this year to allow local governments to opt into a program that would allow them to borrow against a portion of their increased pension fund payments over the course of a decade, according to the comptroller’s office. Runion said Guilderland would not be opting into that program.
“The interest rate for the program is pretty high, and it wouldn’t make sense to borrow for current expenditure. Once you start borrowing, you keep borrowing, so you continue to leverage your future for the next 10 years,” said Runion. Redlich agreed that the borrowing program was not a good option, but said he was concerned about where the money to meet pension obligations would come from.
Off by $1M?
“Our pension contribution increase could be $500,000, and sales tax revenues look like they will be $500,000 short, so I think we’re about $1 million off the mark,” said Redlich. He said the town must find a way to cut spending and avoid a tax increase.
Runion said that is exactly what he plans to do, and has been doing, since 2009. He instituted a policy that required all department heads to submit expenditure requests to his office for approval, to cut down on unnecessary spending on supplies and equipment; cut down on overtime hours for police; and kept vacant positions open. He said he will continue to do the same.
“When we were searching for a police officer to add to the staff earlier this year, we purposely looked for a Tier 5 officer because the retirement rates for Tier 5 are much lower than those from the older system.” Runion said. Tier 5 employees contribute 3-percent of their salaries to retirement, which reduces the amount municipalities have to contribute.
“We do have some retirements coming up over the next year or so, and we’ll be filling the positions with lower-salaried employees for the most part, or we will be looking to eliminate a position here or there, due to a retirement,” said Runion. In addition, nearly all of the budget requests from department heads reflect a decrease from last year, said the supervisor.
The department heads will discuss their individual budget requests at a series of budget workshops, scheduled for Sept. 23, Oct. 14, and tentatively Oct. 28 all at 7:30 p.m. at the Guilderland Town Hall. The workshops will be open to the public.
“I have to give Mr. Runion credit for scheduling the workshops,” Redlich said. He asked Runion to schedule the workshops several months ago, and Runion announced them at a board meeting on Aug. 17. Redlich accused Runion of breaking Guilderland’s town code during the 2010 budget process, when the supervisor waited until late in the process to schedule workshops.
“I’m looking forward to the first budget workshop; it is on Mr. Runion’s shoulders to make it productive,” said Redlich.
At the first meeting, the board members will discuss department requests and prioritize items, said Runion. The assessor, town clerk, and court clerk will attend the first workshop.
“None of the departments asked for much of anything, and there are no salary increases. A memo was sent out to all department heads, informing them that the intention was to hold the line with no increases,” Runion said. The only salary increases will be for those employees entitled to a longevity bonus. Union contracts also come due this year, but Runion said part of the negotiations would be that, with increased retirement benefits and health insurance, the town won’t have the ability to make salary increases.
“We talked about no salary increases and the department heads have indicated that employees are very receptive everyone understands the state of the economy,” said Runion.
Runion feels confident that his plan for the budget will eliminate the need to raise taxes in the face of pension contribution increases. Redlich is still skeptical.
“It simply doesn’t add up. To say the pension contribution increases won’t be a problem, when it is a problem for every other municipality, doesn’t make sense that’s because it’s not true,” concluded Redlich. “I believe we’re going to run out of money in 2011.”