Watching the village budget
It’s budget season for the village of Saranac Lake. Every year the village’s budget determines how almost $11 million will be spent. Since village taxes can make up approximately 45% of the total property tax bill (and this is on top of water and sewer bills), it’s important to know what is in the budget. With a new board and administration in place, it will be fascinating to see how this budget comes together and what priorities it reveals.
No later than March 20, the village manager files the tentative (draft) budget with the village clerk and the Board of Trustees starts its formal review. Several work sessions are already scheduled, and then, by April 15, the village must hold a public hearing. The village board must adopt the final budget prior to May 1 so that it can go into effect on June 1.
The budget is the village’s most important policy document because it reflects funding priorities for the upcoming year across categories such as administration, community development, emergency services, parks and recreation, streets and sidewalks, and water and sewer. Here are some highlights to watch for when the tentative budget is released.
¯ Tax cap. This year the maximum increase in the amount the village can collect in property taxes is 2.99%. When the rate of increase for many large expenses such as employee salaries and material costs is greater than the tax cap, new revenues and/or cost savings must be found to make up the difference. Watch for cost savings masquerading as cuts because no one, especially a politician, likes to deliver bad news, and the bad news rarely makes it into budget presentations.
¯ Fund balance. Fund balance is the cash in the bank that is unused at the end of the year and which has not been set aside for a specific purpose. The village often uses these leftover funds to reduce how much money needs to be raised in taxes in the upcoming year and as a rainy-day fund. The amount can vary from year to year, but last year $568,000 was used to offset taxes. Watch for how this year’s fund balance compares to previous years, how much is used to offset taxes, and how much remains for a rainy-day fund.
¯ Reserve accounts. Reserve accounts are savings accounts set up for specific purposes. The village has nine of them — the largest being the $2.5 million account established last year for public safety facilities. There is also a $300,000 account for the well system and a $518,000 account for street improvements. Watch for how much money the village adds to any of these accounts, whether any new accounts are created, and whether there are plans to use any of them.
¯ Bonds. The village regularly borrows money to pay for important capital projects such as wastewater treatment plant upgrades. Watch for whether the village proposes to borrow money for any upcoming construction projects and whether money is set aside to pay back principal and interest.
¯ Capital improvement plan. The village’s budget does not provide much information about what capital projects are planned for upcoming years, how much they will cost and how they will be paid for. This is because these types of projects often have multiple phases spread over several years and require different sources of funding. The annual budget is just not set up to accurately display and track these types of projects. To solve this, the village needs a capital improvement plan that acts as a companion to the annual budget and which gives staff, the board and the public an effective tool for long-range project planning and budgeting. Watch to see if there is any discussion about finally getting a plan in place.
¯ Budget document. Government budget documents are notoriously difficult to read. The village is currently upgrading its accounting system, but it won’t be ready to use for this budget cycle. Watch for a more user-friendly and transparent budget document next year!
The village budget is very important, and we should all be informed about where and how tax dollars are spent. By watching for a few key indicators, we can gain insight into the priorities of the village and an understanding of its fiscal health without becoming government finance experts.
Jeremy Evans is a Saranac Lake resident and former village community development director. He ran for mayor in 2022.