While drawing up the city’s 2010 budget last year, Mayor James Sottile relied on a retirement incentive program to get expensive senior city workers off of the payroll. Fourteen city workers took advantage of the $10,000 incentive package. In addition to the cash bonus, the departing employees had to be paid for unused sick and vacation time and other benefits. The total cost of the retirements, which Sottile said actually saved the city significant money, came out to $451,000.
Sottile had planned to offset the financial hit by winning approval from Albany lawmakers for a plan to pay off the costs over 10 years. The bill passed the state Assembly and the Senate, but last week Paterson vetoed the legislation.
“The governor and his staff apparently feel that we should be paying these costs out of our fund balance which we don’t have,” said Sottile. “I’m trying to be proactive but they want you be in some kind of financial Armageddon before they’ll come to your assistance.”
Sottile said that he was particularly upset because Nassau and Rockland counties had both won approval for an amortization plan for retirement costs. Sottile estimated if the city is forced to absorb the entire cost of the retirements, it could add 5 percent to a tax hike that he has pledged to keep in the single digits in the 2011 city budget.
“Once again, is upstate is being treated differently than downstate,” said Sottile. “How bad do things have to get before we can get the exact same thing that Rockland and Nassau got?”
But City Comptroller John Tuey said that the city might be able to absorb some of the costs sales tax revenue projections, were running ahead of expectations. According to Tuey, if the current sales tax trends continue, the city will end the year with about $420,000 more than anticipated in the 2010 budget.
“If we don’t get approval to do it we will have to assess our options and how we are going to get through 2010,” said Tuey shortly before the governor vetoed the bill. “It’s just something else the city is going to have to cover.”
Mayor asks unions to skip raises
Last week, Sottile sent a letter to the heads of three unions which represent city employees asking them to forgo raises contained in their contracts for 2011.
The letters sent to the heads of the Police Benevolent Association, Kingston Professional Firefighters Association and Civil Service Employees Association ask that the unions defer mandated 4.25 percent pay hikes until Dec. 31, 2011.
“In the face of ever-increasing healthcare costs and pension assessments, we are looking at a potential double-digit increase in the city budget,” Sottile wrote in the letter dated Sept. 21. “I am asking the cooperation and assistance of the city’s employee unions in helping us lighten this new burden on our city residents.”
Last year, the police and firefighter unions agreed to postpone raises due in 2010 as part of a package of concessions in exchange for the city dropping a plan to lay off some firefighters and police officers. Unless the unions agree to another deferment, they will be due a 7.5 percent raise beginning in January 2011. CSEA, which represents public works and city hall employees refused to defer last year’s pay hike they are due a 4.25 percent raise in 2011. Tuey estimated the total costs of the pay raises in 2011 at about $1.1 million
Sottile expressed little hope that the unions would go along with the request this year. “I have not heard back and I do not anticipate hearing back from any of the unions, but I want them to explain to the public why they won’t do it,” said Sottile. “Don’t get me wrong, we negotiated these contracts in good faith and they are entitled to those raises, but these are extraordinary times. I’m trying to keep people in their homes.”
104 properties on the brink
Sottile also said 104 properties in the city have not paid any taxes since 2008, leaving them open to foreclosure next year. Typically, Sottile said just 20-30 properties a year hit the foreclosure threshold of three years of unpaid taxes. While Sottile said that he expected many of the property owners to enter into structured payment plans to stave off foreclosure, the numbers present a troubling picture of Kingston’s economy.
“These are not abandoned properties, these are people in their homes, these are people operating businesses,” said Sottile. “This is very concerning.”