Mayor Says the Village is in Great Shape and Urges Residents to Volunteer

Scarsdale Mayor Jonathan Mark gave this report at the Scarsdale Forum Meeting on Thursday October 15. Here is the "State of the Village."

President Nadel and members of the Scarsdale Forum, thank you for having me here this evening.

The Village is in great shape.

Our new Village Manager, Steve Pappalardo, has stepped up from his deputy position and has taken firm control of day-to-day Village operations. He is ably assisted by our new Deputy Village Manager, Rob Cole and our senior professional department heads and staff.

Services are being delivered pursuant to a 2015-2016 budget that stayed within the state mandated so-called tax "cap."

Approximately 2.1 miles of our roads that were in the worst shape have been repaved.

Recently, the Scarsdale Police Department submitted to an exhaustive inspection and audit by two assessors from the Commission on Law Enforcement Accreditation (CALEA) in a bid to maintain its national accreditation status. SPD was initially awarded national accreditation by CALEA in 1989 and has since been through six successful reassessments, the last in March of 2011.

This year the department pursued a "Gold Standard Accreditation" requiring an even more critical examination of the department, operations and policies, including many more personal contacts and interviews with staff. The department was awarded the Gold Standard Accreditation in December 2014 and during the customary exit interview, both assessors stated they were extremely impressed with our agency as a whole.

Our fire department continues to provide exemplary service when called upon having recently maintained a national Insurance Service Office (ISO) risk rating of second from the top level that favorably impacts the cost of homeowner insurance for our residents.

In the last year, a major renovation of our principal water pumping station – Reeves Newsom – was completed. This followed the 2011 renovation of our Ardsley Road pumping station. These important capital projects, funded at just under $9 million, should, with proper maintenance, provide sufficient water pumping and pressure capability to the Village for the next 40 to 50 years.

The Recreation Department continues to deliver widely accepted programs, while modifying or adding new programs based on community demand. In addition, enrollment at the summer day camp program increased year-to-year with overall program revenues improving year-to-year as well. Currently 68% of the 2015-2016 fiscal year departmental expenditures are funded through operating revenues. This is the highest percentage in recent history achieved in accordance with a Village Board policy directive to reduce the burden on the General Fund property tax.
At the same time, the Village continues to face significant challenges.

First and foremost, is the overarching question of whether or not we can keep it up – or more precisely what are we willing to pay as a community to keep it up.

The budget process drives municipal operations. Since the 2008-2009 fiscal year Village budgets have risen on average 3.75% per year. Some of the costs covered by the budget are within the control of the Village. These include wages, debt service and capital expenditures. Other costs are not within Village control. Most significant of these are the cost of the Village's contribution to the New York State retirement systems: the New York State and Local Employees' Retirement System ("ERS") and the New York State and Local Police and Fire Retirement Systems ("PFRS"). In the six fiscal years 2010-2011 to 2015-2016, this line item has increased 107% from approximately $2 million to $4.4 million. This percentage increase takes into account a $500,000 year-to-year decrease in this line item for 2015-2016.

The contribution cost of ERS represents more than 19% of the payroll for Village general government employees and almost 25% of the payroll cost of police and fire department payroll. The slight decrease in this cost in 2015-2016 may be an indication that the trend of the preceding six years may be slowing. The point for this discussion is, however, that even though the costs of these systems are not within the control of the Village, they are weighed in the balance when budgeting for costs that are within Village control and so play a role in determining the level of services to be provided.

One other technical point worth noting with respect to the costs of participation in these New York State retirement systems for those of you that closely follow Village finances. The Government Accounting Standards Board establishes accounting and financial reporting standards for governments. In June 2012, GASB issued Statement No. 68 that established new accounting and financial reporting requirements for municipalities and school districts that provide their employees with pensions. In general, Statement No. 68 requires that municipal financial statements report a net pension liability, pension expense and pension related deferred inflows and outflows of resources based on their proportionate share of the collective amounts for all municipalities and school district in the relevant plan. The Village financial statements, available on the Village web site under the Village Treasurer tab, reflect the reporting required by Statement No. 68. Because one of the requirements of Statement No. 68 is to report net pension liability as debt, it may be that during future periods in which this liability increases, total Village liabilities reported as required may exceed total Village assets and create the appearance of the Village being bankrupt. However, since the net pension liability is a non-cash accrual based on actuarial data, it does not reflect the year-to-year actual cash cost of the Village contribution to these systems and so will not reflect the ability of the Village to pay its debts when due. It is also important to note that the State of New York, not the Village, is responsible for providing the pension benefit to eligible Village of Scarsdale retirees. Mention is made of this technical accounting point so that those who closely follow Village finances and budget are not unnecessarily alarmed by this accounting change.

Interestingly, the rating agency Moody's that rates the Village debt has already taken this accounting change into account. In a March 2015 press release, Moody's stated "Moody's rating methodologies already consider unfunded pension liabilities as debt-like obligations. Thus, the new accounting has little credit impact because Moody's already approaches the liabilities in a similar way."

As noted, this year's budget stayed within the so-called tax "cap." In terms of expectations, we should not expect that next year's budget will stay within the "cap" if services are to be maintained at present levels. It is expected that the tax "cap" established by the NYS Comptroller for the upcoming fiscal year will be less than one percent. Each year the Board and Village Staff look at each departmental budget and cost center, to assess whether the services provided, and the costs of doing so, are reasonable in light of resident expectations. The process this year will be no different from prior years in that regard. It may be that after going through such analysis the tax "cap" might be met, but with such a low ceiling, that may be an unrealistic expectation, especially with the capital infrastructure responsibilities facing the Village which will be discussed in some detail later. In addition, other factors, including any portion of a year-to-year increase in the NYS pension contribution in excess of 2% which is exempt from the "cap" and a NYS identified assessment growth factor which is added to the tax "cap" limit, further impact the allowable levy increase. Therefore, even if the budget stayed within the "cap," a budget increase year-to-year may in fact exceed the "cap" percentage.

Future capital projects identified in the Capital Budget to be bonded include a long-pending multi-jurisdictional project for flood improvements along the Hutchinson River, a structural improvement and space renovation of Fire Station #1 and work to rehabilitate the Freightway Garage, although there are no plans for this last matter at present. The issuance of $3.5 million in bonds for the Fire Station project was approved by a prior Board and the bonds were issued in January 2014 at an interest rate of 3.48%, although the work has yet to commence due to the necessity to revise the original plans based on budgetary concerns noted during final construction plan preparation. The Board should be reviewing the revised drawings this fall in preparation for public bidding for the construction contract. Funding for the other projects mentioned has not been approved and in the case of the Hutchinson River Project will not go ahead unless Westchester County, which has verbally committed to funding 50% of project costs, the City New Rochelle and the Town of Eastchester contribute funds to this project.

Other matters:

Capital Projects

As noted, approximately 2.1 miles of the roads identified as being in the poorest condition have been repaved. Unfortunately, with repaving contractors in very high demand, they can dictate when and where they work—within the parameters of what is contracted for. At present, there is a pause in the repaving work as the contractor has moved on to another municipality. The staff is doing its best to have more work done before winter sets in, however if not, additional roads will be paved in spring 2016. By the end of this project approximately 4 miles of roads will have been repaved.

There are a number of other on-going capital projects and some others anticipated. The installation at Hyatt Field Park of new playground equipment, basketball court and a comfort station is underway. Weather permitting, it is hoped that the new equipment and associated improvements will be in place by mid-November. The Recreation Department led by Jason Marra worked diligently on the planning for this project, and engaged in a very useful dialog with residents adjacent to Hyatt Field as part of the process.

Work on the replacement staircase on the northbound side of the Metro North station platform is beginning. Although this is a Village staircase to build, because the staircase connects to the Metro North platform, certain approvals from Metro North were required. These approvals were obtained last week and the construction work commenced on Tuesday, October 13th. If the weather and Metro North continue to cooperate, we hope to have the replacement staircase in place before winter sets in.

Future work on sewers anticipated

During the past several Board meetings, status reports have been given with respect to ongoing conversations with the Westchester County regarding an intermunicipal agreement (IMA) arising from the County's need to comply with certain NYS Department of Environmental Conservation consent decrees governing the County's sewerage discharge into Long Island Sound. Municipalities are engaged in this discussion because their municipal sewerage collection systems empty into the County's system. It is expected that a study of the sewer system will be a requirement of the IMA to identify areas of stormwater inflow and infiltration ("I&I") entering the sewerage system, resulting in flows exceeding the 150 gallons per capita per day limit established by the County in their Sewer Act. These excessive flows that occur during certain rain events, contribute to the overtaxing of the County-owned sewerage treatment plants resulting in untreated sewerage or sewerage with excessive nitrogen levels from the stormwater, being discharged into the Sound. Depending on what the study shows, some remediation work will be required. The cost of this work will, of course be borne by residents, but the mechanism for funding the work is to be determined. Funding could be provided by the Village from a combination of real property taxes, sewer rent and grants (application for which has already been made). Alternatively, funding could be provided from through the County's Sewer District Tax that municipalities collect from residents and remit to the County. Whether the allocation of cost by one mechanism or the other is preferable is a matter of debate, although it would appear that allocating the cost of this project across the entire sewer district might be a fair approach with some cost savings being available due to economies of scale and a larger paying base as property owners exempt from paying property taxes, are subject to paying sewer district taxes. However, as noted, whatever the mechanism used, residents will bear the cost of the work once it is contracted for.

LED Street Lights

The Board appointed an Ad Hoc Committee to study the subject of changing Village high pressure sodium mercury vapor street lights to LED lights. The Ad Hoc Committee, comprised of Village residents and members of Village staff, has made very good progress on this issue. Working with the Department of Public Works, approximately 11 test lights have been installed with 15 more test lights to follow. The installations are in different parts of the Village so the lights can be observed in a variety of conditions and settings.

The test LED lights have different qualities and the Committee has set up a web-based system by which residents can comment on the test lights. Signs are placed on the street poles where the demonstration LED lights are installed so that an interested resident can comment on the qualities of a particular light by referencing a comment to the location information provided on the street pole sign. The Ad Hoc Committee has established a web site to which comments may be posted.

Given the potential for LED lights to transform the appearance of the Village at night, obtaining significant resident input during the demonstration period will be very important and useful in identifying the next steps in the process. I urge residents to avail themselves of this opportunity. Note that this initial demonstration will be the first of two or more demonstrations of the LED lights being considered. No final decision is to be made on which LED lights are to be selected until the Board and the Village staff have collected sufficient information and community feedback to make an informed judgment on how to proceed.

Our thanks go to the Ad Hoc Committee, particularly its Chair Victor Goldberg, and the DPW for their diligent and thoughtful work on this project to date.

Update on revaluation

2013/2014 revaluation grievance statistics (as of July 30, 2015):
For 2014: There were a total of 950 grievances filed.
At the Board of Assessment Review level, 163 matters resulted in reductions.
731 matters were appealed as follows:
585 matters were appealed in Small Claims Assessment Review, or SCAR, proceedings;
146 were appealed in tax certiorari proceedings.
Of the 585 SCAR proceedings, 469 were settled, 30 went to trial of which 19 resulted in reductions and 11 resulted in no reduction. 86 SCAR proceedings were withdrawn or discontinued.
Of the 146 CERT filings, 1 was settled and 145 are pending.

The dollar amount of reductions was approximately $37.6 million by the BAR; $116 million by SCAR proceedings and $362,000 in the one settled CERT matter. The total was approximately $154 million of reductions. While this is a big number, when compared to the total assessed value of Village property of $9.1 billion, it represents a less than 1.7% change. It is noted that with 145 CERT proceedings still pending, this number will likely change further though it may be an extended period of time before those matters are resolved.

For 2015: There were 361 grievances filed.
At the Board of Assessment Review level, 56 matters resulted in reductions.
199 matters were appealed as follows:
134 matters were appealed in SCAR proceedings.
65 matters were appealed in CERT proceedings.

Since the filing deadline for appeals is today, the number of SCAR and CERT matters may increase if additional appeals postmarked today are received. All 2015 appealed matters are still pending.

Status of 2016 Reval

The 2016 revaluation process is proceeding on schedule. A review of 2013-2015 sales and inventory data has been completed. Sales verification data will continue on a bi-monthly basis up until 2016 valuations are set. Field review of assessments will begin in November and run through February 2016. Reconciliations and adjustments will be made to models and values as necessary. The Village Board has scheduled a Committee of the Whole public meeting for November 17, 2015 at 6:30 pm to get an update on where this process stands.

Water

The Water Department through its operating Enterprise Fund purchases our water from New York City's system. The City has increased the rate for water purchases from time to time over the past several years and the Village had spread out increases that pass along these rising costs over somewhat longer intervals. While there was no increase in the Village water rate last year, the Board will most likely implement an increase for the next fiscal year to pass on costs that continue to rise and to start building an adequate fund balance to cover, in part, anticipated future expenditures for the water system infrastructure. It is presently projected that over the next 15 years an estimated $15 million may be needed to fund improvements to the supply and distribution systems, including the cement lining of the 100 year old distribution pipes and replacement of the equally aged water valves. The Village is currently participating in a New York City Water Board Demand Management Study of Scarsdale's water system. Although the final report has yet to be issued, the Water Board is committed to funding up to $650,000 in system improvements and the institution of Village-wide conservation efforts.

Separate from the Village water department operations, Water District #1, of which Scarsdale is a part, is required, pursuant to Federal and State regulations, to provide ultra violet treatment of the water to kill certain pathogens. To this end, Water District #1 is currently building two ultra violet treatment plants in White Plains on the 48 inch pipe from the Kensico Reservoir serving the Village. The estimated cost of the two plants is $10 million and the anticipated service operation date sometime in 2018. In the future, if full filtration of the water supply system is required, a treatment plant on New York City Water Board property in Valhalla would be built replacing the aforementioned ultra violet plants. If this project, currently estimated at $100 million, moves forward, it would be funded by the County Water District Tax which is allocated among Scarsdale, White Plains, Mount Vernon and Yonkers residents and will not be part of the Scarsdale water or tax bills.

Gravel and impervious surfaces: For a number of months there had been pending a proposed change in the Village Code that would have treated gravel as an impervious surface for purposes of determining lot coverage. A moratorium on the treatment of gravel as pervious was in place during the pendency of the proposal. After considering this matter over many months, the Board determined at its meeting last Tuesday night to not make the proposed change in the Code. At the same meeting the moratorium was terminated. While each Board member had slightly different rationales for not adopting the proposal, a common theme running through all Board member comments was that the proposal did not squarely address the development concern most commonly expressed. That is, in the view of some, houses too large for certain sized lots are proliferating to the point where the character of some neighborhoods or streets are being changed and not for the better. Having voted down the proposal, there remains the perennial question of whether more should be done to manage development in the Village. In my view, which I and other Board members expressed at the Tuesday night meeting, this topic deserves further consideration. It is hoped that the panel discussion following this talk tonight might provide additional insights on what direction we might next take on this important subject.

The Village is successfully dealing with the many challenges that confront it in delivering municipal services to residents. However, running a municipal government is an organic process that requires flexibility and innovation to meet both planned and unplanned changes. It also benefits from resident input. Too often the Village Board and staff find themselves having to make decisions with minimal, or even no, resident input. There are many opportunities for residents to have an impact in how our Village operates from serving on the various boards and councils to the Board of Trustees to appearing at the public sessions of the twice monthly Village Board meetings. Volunteerism in the Village seems to be at a low ebb for reasons that are not clear to me even when taking into account the busy lives our residents lead. It is hoped that the group assembled here this evening can convince some more of our neighbors to find time in their schedules to join in our collective effort to continue to make Scarsdale the Village in the Park we all cherish

Thank you very much for your attention.