Scarsdale Could Receive $1.9 Million in Relief Funds from Washington

Good news from the U.S. Congress may help cash-strapped local villages to close their budget gaps. At a work session of the Village Board on Tuesday March 9, Scarsdale Mayor Marc Samwick announced that the American Rescue Plan, President Biden’s $1.9 trillion Covid-19 relief package, might provide $1.9 million in relief funds to Scarsdale. Samwick learned the good news from NYS Senator Chuck Schumer.

The funds will be payable in two installments, with the first expected within 60-90 days after the bill is signed, and the second payment to come exactly one year after the first. There are restrictions on the use of these funds; For example, the money must be used to respond to the effects of the pandemic and cannot cover the cost of pension funds or reduce an increase in the tax levy. They can be used to support workers' needs, cover revenue losses, or invest in infrastructure projects.

Mayor Samwick then reviewed the past fiscal year and announced an expected revenue shortfall of $2.4 million from decreased parking revenue and sales tax revenue, and several other sources. While the Village set aside $2.225 million to cover the current and future revenue shortfalls from the pandemic, these funds from the federal government will help Scarsdale manage and recover from the losses experienced over this past year. Village Manager Pappalardo believes that if managed properly, it will take three years to fully recover from the pandemic’s fiscal impact.

What to do with the windfall? Samwick suggested that the Board use this money to restore the salary increases of non-unionized Village employees. Each year, Village employees receive a standard 2% salary increase, but this year these employees agreed to forgo their raises. The Mayor asked the Board to use the federal funds to restore these salary increase retroactive to June 1, 2020 which would cost approximately $70,000 of the $1.9 million allocated to Scarsdale.

He emphasized that “it would be a strong statement for those who have sacrificed so much and for those who have done so much for the Village” during such a stressful and chaotic time. He also stated that “seeing what staff has been through, the struggles they have enduring and continue to endure, I think it is very important to show our deep appreciation for our staff.”

Trustee Crandall expressed her enthusiasm for this idea and said that she "fully supports the proposal to restore the 2% increase for non-unionized employees. For all that they have done, it's incredible." She added that the money "might help with morale issues. We are a team here and I think it's a great idea." Trustee Waldman agreed.

Trustee Arest was caught off guard by the proposal and said he felt “like a deer in headlights.” He said he would “like to think about the retroactive increase as opposed to a [salary] bonus… I fully appreciate staff… [but] we need to be responsible… this money will obviously give us the ability to reallocate things, the idea that we can’t help taxpayers but the first thing we are going to do, without real process here, is to just make a decision, before even making a decision, is concerning to me.” He concluded by saying that he is not against the proposal but that he needs more time to consider the implications.

Trustee Lewis mirrored some of Trustee Arest’s concerns. He said “it comes from a good place, and we have people who have served well… I share your spirit. [But] I do believe the conversation begins with [the question]: What is the tax rate that we think is appropriate based on what we know? I think [the proposed rate of] 3.4% is too high… I don’t think the first dollars should be about salary increases, I think it should be about tax relief.”

Trustee Whitestone spoke next and said that “we have a lot of wants and needs competing for these dollars. One is a lower tax rate, one is to show appreciation for our amazing staff… I believe we have taken a very thoughtful and careful approach analyzing each item [in the budget thus far] and this wasn’t on our radar.” Similar to Trustee Arest, Trustee Whitestone requested more time to understand the impact of the salary increases.

Next, Trustee Crandall spoke again in support of the proposal and stated that “when the Board originally spoke about holding off on the 2% increase, what I understood was that we would eventually restore it… The way [Mayor Samwick] conditioned the proposal, the 2% would only be restored if the American Rescue Plan is passed and therefore there wouldn’t be an increase on the tax levy… so I am sticking with my position based on what [Mayor Samwick] said.” She concluded by adding that “our strength as a Village comes from our staff in Village Hall… without them helping, we would be in trouble. It is our partnership working with them that makes things smooth. I feel strongly that we should look to do this as [Mayor Samwick] proposed conditioned upon receiving that money.”

Based on the expressed concerns by various Board members, Mayor Samwick asked Village Treasurer Scaglione if she could put together a memo to help the Board understand the overall impact of implementing this retroactive salary increase. This information will be presented at the next meeting on Monday, March 15th, and the discussion will resume.

Penalties and Fees for Late Tax Payments

Next, Trustee Lewis turned the Board's attention to the late fees that will be collected from a group of residents who did not pay their taxes on time. Village Treasurer Scaglione announced that the Village has collected $300,000 of outstanding school taxes to date. Manager Pappalardo added that he has spoken with several aggrieved residents who are concerned about the penalties and the two-part tax collection process this year.

Trustee Crandall asked for an update regarding the potential for the Governor to provide relief on these late fees. Manager Pappalardo stated that due to the winter storm, the Governor declared a State of Emergency on February 1, 2021. This opened the possibility for Scarsdale to request an executive order from the state that would allow the municipality to provide a fee waiver of 21 days from when the taxes were originally due. Because the second tax installment was due February 1, 2021, this waiver would allow the penalty-free period to extend until February 23. The Board has the option to vote on whether to request this executive order. This action would affect 53 taxpayers and would result in $75,000 in refunds from the Village.

Trustee Whitestone then voiced his change in thinking regarding the Board’s idea of using the tax penalties to potentially reduce the proposed tax levy increase. He stated that while he was originally uncomfortable with the suggestion, the Board now has more confidence in how the fiscal year will turn out and he is more “comfortable with the long-term picture… [and] with this use of the tax penalties.”

Trustee Arest disagreed and said that he doesn’t think using some residents’ late payment fees to lower taxes for the Village will solve the issue. Instead, he suggests something to positively impact the lives of Scarsdale residents, such as the recommendations made in a recent Scarsdale Inquirer Letter to the Editor, where the author suggested that Scarsdale make technological improvements and send out automatic email reminders regarding tax deadlines.

Trustee Crandall disagreed with Trustee Arest and stated that Scarsdale “has a highly educated community… I feel badly for folks who missed their payments… but I don’t think we need to hold their hand. It is my understanding that if you bank online you can schedule your future payments right away. I would rather use that money to lower the overall tax policy if possible.” Trustee Waldman added that the Letter to the Editor in the Inquirer made some forward-thinking suggestions like the digitization of many documents, and she would want to see some of the late fees going towards modernizing Scarsdale systems.

Finally, Mayor Samwick wrapped the discussion by adding that there are plenty of Village needs, such as roads and technology infrastructure, but he is still supports putting employee needs front and center by voting to approve the 2% salary increases.