SARANAC LAKE – The village board is considering a $7.3 million budget which sits below the tax cap, includes raises for staff, accounts for rising costs and raises water and sewer rates for the first time in several years.

A public hearing on the tentative budget and the proposed water and sewer rates will be held on April 13 at 5 p.m. in the village meeting room in the Harrietstown Town Hall.

The village is proposing to spend $7,352,083 in the coming 2026-27 fiscal year – $149,733, or 2% more than the current fiscal year.

To pay for this, the tentative budget currently calls for the village to collect, or levy, $4,688,967 from taxpayers, a $128,820 increase from last year and $102 below this year’s state-imposed tax cap. The tax cap this year was set at 2.67% — the state base of 2% plus a growth percentage of 0.67%.

The village is expecting to earn $2,023,569 in revenue this year, $54,029 less than was anticipated the previous year.

To balance the budget, it calls for the village to pull $639,547 from its reserves in its fund balance, $232,060 less than what last year’s budget called for. There is about $1.5 million in the general fund balance currently, though this is subject to change.

Village Manager Bachana Tsiklauri said the $639,547 in appropriated unreserved funds will not necessarily be spent. The $871,607 in unreserved funds appropriated for the current budget has not been touched and is expected to roll over into this year, Tsiklauri said.

The village has around $1.5 million in its unreserved fund balance.

Though the budget calls for the village to pull around one-third of this fund to balance the budget on paper, Tsiklauri said that money will only be spent if needed. Most years, he said the village only uses a portion of it, or it does not get touched.

Former village Trustee Rich Shapiro urged the board to cut the budget.

He said the previous administration built the unreserved fund balance up from $1 million to $3.5 million. He said that in the past few years, the unreserved funds have had a $2.4 million drop and that “the well has run dry.”

Tsiklauri pointed out that these figures started by included encumbrances – money that is set to be spent, but has not been used yet – as well as cash reserves and budgetary contributions, but ended by excluding these encumbrances. He said this was not comparing apples-to-apples and the drop was actually from $2.5 million to $1 million, a drop closer to $1.5 million.

The village has around $396,000 in encumbrances currently.

Shapiro said to reduce the fund balance while raising property taxes is “fiscally irresponsible.”

Tsiklauri highlighted a difference between unreserved fund balance and cash reserve balance. He said an Enterprise article during the recent village election campaign conflated the two.

The unreserved is the “rainy day fund,” based on the budget deficit or surplus – it goes down during deficit and goes up during surplus.

It is different than the cash reserves, which are accounts that the village puts money into for specific purposes – usually large projects or ever-increasing expenses. There are cash reserves for things like fire trucks, sidewalks, water distribution or insurance.

The village has $3,854,841.41 in its general cash reserves, as well as $2,636,661 in water cash reserves and $2,998,580.16 in sewer cash reserves.

To spend from these accounts, the village needs to notify the public. The public can collect signatures and override the board through a permissive referendum if it votes to spend money from these funds.

Tsiklauri said this has been a tough budget year. Costs are up for nearly everything. He said the National Grid electric rate hikes have been “crazy,” nearly doubling the price per kilowatt-hour.

The village also has a new labor contract with a $2 increase for employees in the teamsters union.

Administrators are also set to get a 3% raise to mirror the teamsters contract. This raise will require a separate vote by the board.

The village is also anticipating slightly less revenue that the current year.

This is because the state had initially been overpaying the village for its cannabis tax funds through an accounting error. Instead of anticipating $100,00 in revenue, based on the initial payments, the village is now budgeting for only the correct $45,000 to come in from cannabis sales tax.

The village has no debt in its general fund, but around $18.6 million in debt in its water and sewer departments because of several large infrastructure projects.

The village plans to pay off around $1 million of this debt in the coming year.

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Tax rate

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The village sits inside three towns. The tax rates in each town are different because each town assesses properties differently. To ensure that each town’s taxpayers pay their fair share in taxes, the state has something called an equalization rate, which equalizes each town’s assessments to full market value to make up for any differences in how properties are assessed.

Harrietstown has an equalization rate of 65.56% because it is under-assessed, though the town is in the midst of completing a complete reassessment of its properties, so it should be back at 100% next year.

St. Armand and North Elba are fully assessed at 100%.

Residents who live in the Harrietstown part of Saranac Lake would pay $14.24 per $1,000 of assessed property value under the proposed budget, a $0.38 — or 2.74% — increase per $1,000 from the current fiscal year.

Someone who owns a $300,000 house in the Harrietstown part of Saranac Lake would pay $4,270.86 in village taxes, $114 more than last year.

Residents in the North Elba part of Saranac Lake would pay $9.33 per $1,000 of assessed property value, a $0.40 — or 4.06% — decrease per $1,000.

Someone who owns a $300,000 house in the North Elba part of Saranac Lake would pay $2,799.96 in village taxes, $118.56 less than last year.

Residents in the St. Armand part of Saranac Lake would pay $9.33 per $1,000 of assessed property value, a $2.25 — or 19.41% — decrease per $1,000.

Someone who owns a $300,000 house in the St. Armand part of Saranac Lake would pay $2,799.96 in village taxes, $674.46 less than last year.

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Water and sewer

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Including the village’s $2.1 million water budget and $2.52 million sewer budget, its total spending for the next fiscal year would be $11.98 million.

Water and sewer are funded separately from the general budget, through ratepayers instead of taxpayers. The water and sewer rates have been flat for three years, but with major upcoming projects for both, they are expected to rise again to pay for these upgrades.

The metered rate per 1,000 gallons for water is proposed at $10.97, up $0.22 from the current rate, and at $8.70 for sewer, up $0.08 from the current rate.

The water budget has anticipated revenue of $1,982,112, a proposed 2% increase. The sewer budget has anticipated revenue of $2,609,475, a proposed 1% increase.

The minimum annual rate for homes inside the village is proposed at $372.90 for water and $295.94 for sewer.

The minimum annual rate proposed for homes outside the village but in a district is $745.80 for water and $591.89 for sewer.

The minimum annual rate proposed for homes outside the village and not in a district is $1,118.70 for water and $887.83 for sewer.

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Audit requested

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Harrietstown Supervisor Jordanna Mallach asked the village to consider budgeting for $30,000 to $40,000 to pay for a third-party independent audit.

She clarified that she was not saying the village is out of compliance with anything and was not making any accusations of any purposeful or incidental errors.

But the village has had high turnover in treasurers — several in the past five years. Mallach said things can fall through the cracks and it’s important to have a “third set of eyes” on things.

The village files “Annual Financial Reports” with the state comptroller, but Mallach said the town pays for an independent audit annually – a stipulation of the federal money it gets for the town-owned airport.

People literally wearing pocket protectors come in to look at every aspect of the town’s finances, she said.

The process is long and inconvenient, Mallach said, but has a big benefit that outweighs the burden.

She said audits have helped the town find money and savings and improve their finances.