Council Approves 1% Tax Increase for 2014

At the final meeting of the Rye City Council, the budget for 2014 was approved. The Council lowered the rate from an expected 2% to .99% by taking $206,000 from mortgage tax revenues.

By Tom McDermott and Robin Jovanovich

At the final meeting of the Rye City Council, the budget for 2014 was approved. The Council lowered the rate from an expected 2% to .99% by taking $206,000 from mortgage tax revenues. That translates into a $36 increase for the average household.

Revenues are forecast to increase by about $1 million over last year’s budget to approximately $32 million. The current building boom in Rye will fuel $1.6 million in mortgage taxes and $1.35 million in building permit fees. In 2013, mortgage taxes are forecast to be about $2.4 million and building fees will be about $$1.7 million.

Spending will be up $1.9 million or 5.9% in 2014. General Fund transfers to the Capital Project Fund and the Building and Vehicle Fund will be $2 million versus just $195,000 in 2013, paid for out of the Unassigned Fund Balance. During the recession, the City spent less and less on repair and upkeep of roads, sidewalks, sewers, buildings, and vehicles – bottoming out at zero in 2012. As the City has replenished its Fund Balance, it can now fund necessary capital projects. 

Other major increases are for health insurance, which will increase $304,000 or 14%, and salaries, up $582,000 or 4.8%. There are two new positions budgeted for 2014. All of the City’s union contracts will have expired by Dec. 31, 2013; and the City has budgeted for approximately 2% increase in salaries.

The projected year-end Unassigned Fund Balance remaining in the General Fund equals 18.6% of expenditures or $6.2 million. However, since the Council voted to take out of the budget the cost of redesigning and rebuilding the Police Station and Court (about $1.25 million), the size of the City reserves is somewhat exaggerated. Further, although the budget calls for spending $400,000 on road, sidewalks, and sewer repair, the City estimates it could easily spend double that amount on needed repairs of its infrastructure.