Information:

Year 2000 Budget Address

Honorable Members of the Oneida County Board of Legislators:

In accordance with the terms of the Oneida County Charter, I appear before you today to present the proposed operating budget and capital project plan for the year 2000. It is a special honor to be able to present to you our operating plans as we approach the new millennium. I trust that you will see as we unveil this plan that it meets the policies that you have laid out and that I have furthered in my recent State of the County Address. I trust that you will also find this plan continues our solid accomplishments of fiscal stability and conservative spending as we continue our work. Perhaps most importantly, this plan will continue our maintenance of a low property tax levy for the County of Oneida, and in particular advances a property tax freeze for the year 2000, which we believe will lower the actual property tax rate for more than half of our taxpayers.

We should be very proud of our fiscal performance over these past three years, which has kept our property tax stable, despite having to absorb very large increases of expenses, particularly in Medicaid and in certain other mandated Social Service programs. We have also been able to invest over $4,000,000 in economic development incentives, in addition to the normal operating aid that we have provided to economic development agencies. Yet, as you will see, we have been able to increase our fund balance. All of this is proof that our fiscal management has been sound and conservative, and our investments have been wise in building the economy and the tax base of the future.

It has been a significant effort to keep the property tax stable over the last three years. We know low property taxes are vitally important to our homeowners, our farmers and our business people. The first chart shows the level of the property tax and its’ stability since 1995. As a comparison, I want to show in the next chart the increases in the local share of Medicaid costs. This is the unreimbursed share which we have been absorbing as we have kept the property taxes level.

The property tax levy is 18.5% of the overall revenues of County government. We anticipate that this year, for the first time, a slightly larger portion of our revenues will come from the sales tax. Because of the economic conditions of the County, we have endured a very flat sales tax over recent years and the 1999 Budget only projected a 1% increase in sales tax receipts. However, in fact, for 1999 we now expect closer to a 4.5% increase in sales tax revenues. This projection is based on the actual receipts from the first half of the year, not including a sizeable one time adjustment which we expect in the third quarter from the Woodstock Festival. Based on these figures, it is our consensus that it would be very prudent to project a 3.1% growth for the year 2000.

Other departmental income will also jump appreciably, by $6.7 million. This includes the tobacco settlement payments, which are expected to begin in the year 2000. The tobacco settlement has been finalized in New York State Courts. Payment should be expected no later than June 30 of 2000. The first annual payment should be $4,400,000. However, in order for those payments to begin certain other actions must still take place outside of New York State. There are also some additional legal challenges either threatened or begun. Therefore, to be very prudent, we must make sure that the taxpayers cannot be hurt if for any reason these payments are delayed or altered. While we have put this money in the Budget as a revenue to help cover the increased costs projected for Medicaid, which is what I expected we would have to do, I have also recommended a reserve from our fund balance in an equal amount to make sure that we can cover these costs in the event of any unexpected change in this revenue.

Departmental income also includes a major increase in revenue from the Sheriff’s account. This is because of the foresightedness of the County Legislature, working with the Sheriff, in building a jail with capacity that would be available for housing of prisoners from other Counties, the State and the Federal governments. The revenue increase that we have projected is based on the actual results in the year 1999, which have exceeded expectations. The Sheriff and I have recommended that a 1999 payment be made from Sheriff’s surplus revenue as a prepayment on debt service on the County jail. That in turn has reduced our debt payment requirements for next year, and we are very grateful for this success. We have budgeted year 2000 revenues from the jail in excess of $4,000,000.

The Federal aid figure in our revenue side show an increase which may be misleading. There is a $4.7 million increase shown in Federal aid, but $2.5 million of that is a shift from State aid funds to Federal funds. The remaining Federal aid increase of $2.2 million is in support for our buses, increases in other transportation support, and other increases in social service programs which are necessary and of course, offset by expenses. That does include in particular some increases in child care assistance, which we know is a well used and well needed program in our community.

The $1.3 million decrease in State aid figures reflect the shift of the $2.5 million for accounting purposes from State to Federal aid. Therefore, when you adjust for that, you recognize that State aid to our operations has increased by $1.2 million. These increases are formula driven and range from Courthouse maintenance to mental health services, to other social services and are reimbursements for mandated expenses.

The revenue sources are in fact resources which we must treat as careful stewards. The programs of County government are extensive and include many initiatives of this administration working with this County Legislature. Let us review where the expenditures occur. Obviously our largest expenditures are in human services. Most of these are for programs that are mandated and are also the essential services provided to many of our citizens.

Our Medicaid budget continues to grow at an alarming rate. We are projecting a 9% growth in Medicaid for next year, which follows a 9% actual growth in Medicaid this year. We had hoped it might slow, but it has slowed only minimally. The State response has been to call for additional cost containment measures on providers. However, we know that there is a brick wall there at some point, since many of the providers are now being paid at sub-standard rates, compared to market rates. Many eligible local recipients are not able to get Medicaid benefits locally because of these rates, and they have prevented us from putting into effect a full program for managed care in Medicaid. Note that the overall public assistance rolls have continued to drop, but the Medicaid numbers of clients have continued to increase. Some of this is attributed to those who need institutionalized care. A large percentage of the increase is due to those who are working full time but simply cannot receive health care benefits through their employment or afford health care insurance on their own. These are problems that society must be ready to tackle, and we must be ready to promote the availability and use of long term care insurance and health insurance by employers and by individuals throughout our community. We must look at ways to promote the private sector alternatives if we expect to reduce the public sector costs.

In addition, we are taking administrative steps to increase cost effectiveness of Medicaid. We decided with you this year to restore a number of positions that had been removed in Social Services so that we would have the number of caseworkers necessary to review Medicaid applications properly and screen them more diligently. We have also stepped up a program to recoup monies from people who have received Medicaid benefits inappropriately or who have failed to disclose assets they received after Medicaid payments which are subject to our recoupment. That program has increased our revenues this year by over $400,000 and we expect to continue. I want to thank Bob Malpezzi of our Social Services Department who has been working on this program with Social Services Attorney Gay Carl and Commissioner Ted Mohr. We will continue to work with Attorney Nancy Rose Stormer on the Medicare maximization program to make sure that people are receiving benefits appropriately under the Medicare program, which gives the consumer a greater choice of services and the local taxpayer a savings. I would also thank our Veteran’s Services Program which has continued to encourage use of the VA Health Facilities at Griffiss and in Syracuse so that veterans can receive benefits to which they are entitled. Thanks to the Legislature, we have added this fall a person in the Veteran’s Service Program who will be extending our outreach to homebound veterans. He is already working with our Office of Continuing Care to make sure that all benefits from any sources appropriate are available for homebound veterans.

Yet with all of these efforts to make sure that services are provided efficiently and economically, to contain costs and to recoup monies, our Medicaid budget continues to grow at a rate unseen since the Medicaid crisis of the early 1990's. Without increased State support for Medicaid services our ability to hold our property taxes in line in the future is clearly in peril. We have been working with the New York State Association of Counties and have approached our Legislators and the administration of Governor Pataki to address the urgent need for State attention to this problem.

Likewise, we have a continuing rapidly mounting cost increase in the area of child education, education of handicapped children, foster care, day care, and related services. The Federal Government has seen fit to increase our assistance for day care programs and that money will be well used in our communities. However, the costs of the education of handicapped children program are still very difficult to keep within reason, pointing up the need for reform in the regulations and additional support from the State.

Kendra’s Law was also passed this year in Albany. This amendment to the Mental Hygiene Law, will require our Oneida County Mental Health Commissioner to operate a locally assisted outpatient treatment program and assume new legal obligations for community-based clients. The County is mandated to provide services according to a treatment plan which may be found necessary by a court of law. The financial impact on counties has yet to be calculated. Although state aid for mental health has increased, the state aid for this program has been calculated at zero. Therefore, the Commissioner of Mental Health is working with contracted provider agencies under our programs to ensure compliance with the new law. I have insisted on a reserve for Kendra’s Law in the budget in the amount of $175,000.

Our Public Safety Budget represents the costs at the jail, and the costs of the Sheriff’s Department, and also includes increased expenses in the District Attorney’s Office, which are the result of shifts which we have requested so that the District Attorney could directly oversee some of the operations of our Drug Task Force and our Child Sexual Abuse Task Force. These are not as much new expenditures for County government as they are shifts to the District Attorney’s Budget.

In the Public Defender’s Office, certain staffing and cost increases are recommended in response to a request that we made to the Oneida County Bar Association to review the services of the Public Defender’s Office. This followed a court case in which a Federal judge in our vicinity criticized the operations of the Public Defender’s Office in their representation of a client. Although that decision and those criticisms were later overruled specifically in a higher Court, the County Bar Association worked with all of us and brought in the resources of the American Bar Association to help us look at the issues of service raised in that opinion. These recommendations would allow for proper representation by the same attorney of a case throughout the proceedings in all appropriate cases. I want to thank Frank Nebush and all in the Public Defender’s Office for their great work with their caseload and for cooperating with this review.

The Public Safety Budget also includes new expenditures for the 911 system, namely the phone lease, that will necessary as part of the new building in Oriskany. This is also an important improvement for public safety and will help to realize the further consolidation of 911 services.

In the areas of general government and public works, our debt service has had to increase by just over $1,000,000. This is lower than it could have been because of the very good efforts of our Comptroller Joe Timpano to refinance debt and take advantage of our improved bond rating and favorable interest rates that have resulted. The increased appropriation is necessary, because of the work we have done at the jail, the courthouse, and Mohawk Valley Community College, in addition to the ongoing work, from which we must not shrink, on our County roads and bridges. However, I will also note that in these areas, we have found innovative ways to stretch our dollars and to match our dollars with other support. For example, the College Hill Road project which was finished this year in Kirkland, was a combined effort on a County road with support from the State, with special thanks to Senator Ray Meier and Assemblyman Bill Magee. We also received additional contributions from Hamilton College to meet certain conditions they desired. Our Department of Public Works did a wonderful and a creative job of completing that project and matching our dollars in the process.

This budget also includes increased support required for the County’s Motor Vehicle Bureau. This is because the operations and the services provided by Sandy Caruso and all of her staff, which have always been done on a very economical basis, have been deprived of a revenue source from mail-in registrations. This year's State Budget directs motor vehicle license and registration renewals to be mailed directly to the State. This has a significant impact on the Clerk’s budget, and she is therefore compelled to ask for increased aid which we believe is necessary. Since she had blended the mail-in registrations with the customer service positions, she had a wonderful efficiency, but we are only minimally able to offset the revenue loss now with expenditure decreases.

We are also including a substantial $100,000 increase in support for our libraries throughout the County. This brings our total support of libraries to the highest level ever.

We have shown an increase in this budget for the arts and cultural activities in the County by approximately 3% overall. We have added to that figure for the Rome Art and Community Center, in response to needs they have identified and particular efforts that they are making which are very commendable to revitalize their own organization.

Our education budget includes a further increase in the support for Mohawk Valley Community College. Last year, this Legislature approved a major Capital Program for improvements at the Utica Campus of Mohawk Valley Community College. This Board is currently considering a transfer from an underused fund in payments to other community colleges of $350,000 to restore the fund balance for operations of MVCC. We added our own program of training of the County workforce through Mohawk Valley Community College, which also increased their revenues by approximately $80,000 over the past two years. This year we will ask for an additional 3% increase in direct county aid for operations at MVCC. I am hopeful that we can supplement this modest increase in County operating support over the course of this coming year by programatic changes and new initiatives that can draw in additional dollars from County and other sources. Investment in Mohawk Valley Community College is an investment in the workforce of the future, which is one of the most critical challenges in front of our communities if we expect to continue to build and to maintain a viable economy into the 21^st century.

Our economic development fund continues to show our strong commitment to rebuilding the economy of the Mohawk Valley. It includes $673,000 for a Griffiss runway agreement, which underwrites and insures operations not only for Global Aviation, but for future tenants whom we are recruiting at this very moment for aircraft maintenance, air freight, and other non-passenger services at Griffiss Air Park. The County has made a very substantial commitment to Griffiss, and it is a very wise investment in our future. The best news is that we have budgeted the same amount as revenue from the tenants at Griffiss Air Park, and expect this expense to be fully reimbursed.

The Capital Budget proposal for the year 2000 was recommended by the Capital Projects Review Committee, including many of your members, and I am forwarding it with very minor modifications to you. It involves $12 million in new bonding, including $2.5 million to continue the Courthouse reorganization Phase 2, $315,000 for continued work at Union Station, to bring us toward completion of that project, $765,000 for Capital work in the County Office Building, and $546,000 for technological upgrades as part of the overall campus improvements at Mohawk Valley Community College.

I would note that we have also recommended $250,000 in bonding for the Stanley Performing Arts Center expansions and renovations. This continues our proud association with the renovation of the Stanley Theater. This new program, behind the stage, will bring the Theater to the capacities that people would expect when they walk into the beautifully renovated house. This is by far only the beginning of the new project for renovations at the Stanley. We have not committed to further dollars at this time. I must tell you that I will likely be recommending further involvement in the future depending on the completion of the plans and the level of involvement of other parties and the community at large. However, I think that the Stanley Theater has proven itself to be a major regional asset and one which we should support.

We have recommended a $2.5 million increase, the largest single increase in our bonding, for the acquisition and renovations of the Rome Sentinel building for County operations in downtown Rome. This recommendation was the work of a committee that involved many of your members and involved substantial input from the community in Rome. It allows us to provide a proper space for the Family Court in Rome, to ease a parking situation in the vicinity of the current Rome Courthouse, and most importantly to consolidate the Department of Motor Vehicles, Family Court and other County functions currently in rental space in downtown Rome. This consolidation will reduce our expenditures substantially on the rental side and improve our delivery of services to citizens of Rome and Western Oneida County. This is a major investment in downtown Rome, and it furthers the efforts of Mayor Griffo and others to revitalize downtown Rome.

We have included $400,000 of pay-as-you-go financing, trying to use our fund

balance wisely to avoid expenses of interest and other expenses of borrowing. Almost half of that is for a new initiative in fire safety. This administration, working with the members of this Legislature, has expressed a strong interest in Safe Communities. This has included Capital investment in a new Fire Training Center in Whitestown which is under construction now, an air van which was purchased this year to be shared among fire departments, and of course the support for the Arson Strike Force and other initiatives. $200,000, with the advice of the Fire Advisory Board and following the recommendation of Legislators Bill Croll and Dave Kennett, who have been joined by many other legislators on both sides of the aisle, will provide aid to fire departments for mandated safety equipment. I believe this is a very valid program and one we should pursue.

Our Capital Program also includes continuation of the upgrade of our County offices in relation to computer equipment. We have already invested over $200,000 over the past three years in upgrading our computer capabilities, including everything from terminals on desks to hard wiring of the County building itself. I am very proud that we have accompanied this process with a program from Mohawk Valley Community College in training our workforce so they can upgrade their computer skills and make good use of the technology that is available. I believe this is a very prudent way to improve our capabilities and our productivity. Finally, our Capital Program includes a $1.7 million continuation of our strong commitment for County roads, to be supplemented by State funding, and $600,000 for Capital work on bridges, which is also supplemented by State and in some cases, Federal funding.

As you review our Budget request, we must keep in mind the overall economic and fiscal environment in which we are operating. The economy of the Mohawk Valley, because of the cooperative efforts of County government and the local governments, our neighbors in Herkimer County and Madison County, the State of New York’s tremendous assistance, and the national economic boom which had not visited the Mohawk Valley until we jumped in, has provided us finally with an economy in which the people have a great deal of justifiable optimism. People are excited, and our economy is growing again. I recently checked with the Regional Office of the job bank from the Department of Labor that told me that there were 500 listings for jobs in our area and almost 20% of those were jobs that started at $30,000 or more. This is a very significant and wonderful improvement in our local economy. However, we are also facing increasing workforce shortages for jobs that are available. The same is true in County government. In a number of areas we have identified significant new problems because of the success of our local economy in attracting and retaining qualified workers. We are hampered in our ability to move forward in some cases because of antiquated County labor contracts that, despite our best efforts, have yet to be renegotiated. We will continue our negotiations, and we have put money into the budget to accommodate the step increases which are as high as 8% under the present contracts. We will continue to work for a fair settlement of our remaining open contracts. In the meantime, we have recommended a number of upgrades of positions in the budget. Over the course of this next year we may identify and come to you with requests for other upgrades in positions.

This budget also includes approximately $16,000 for the beginning of a new program of cost of living adjustments to salaries of Countywide elected officials. This week we will be sending you proposed legislation that would allow, beginning January 1, 2000, and for the following three years, for an annual cost of living adjustment for the County Executive, Comptroller, Clerk and Sheriff. The COLA increase would be calculated based on publicly available price index information, and capped at 3% in any given year. By this modest annual adjustment, the first for these offices since 1994, I hope to minimize the need for periodic political football, and to restrict increases, to reasonable amounts at any time that the taxpayers can understand and accept.

Our budget continues to show an investment in our Capital and educational infrastructures, and in our economic development initiatives. We must also continue our initiatives that will accommodate and provide for a long term, viable, residential community. This budget includes funds for County-wide housing code enforcement, and our Neighborhood Empowerment Works (or NEW Neighborhoods) program which will be unveiled shortly.

This budget does not include a recommendation for a permanent exemption of clothing items from the sales tax. You will note that most other counties in New York State to date have also not recommended participating in the permanent exemption. The reason is very simple. As consumers, we are all interested in saving money and as a conservative local government, we are interested in providing tax breaks. However, the estimated cost of this proposal to Oneida County is $5 million, which would require a 10% increase in the property tax if it were to be made up strictly from other revenues. There is no state aid offered for Counties to participate in the sales tax exemption, and even the tobacco settlement money which we believe will come to us has already been swallowed up, as I was afraid it would be, by increasing costs of the Medicaid program. To use our fund balance for such purposes would be to deprive us of a long- awaited goals which we have now achieved, with the elimination of short term borrowing and the upgrades in our bond rating. In short, it would be a very bad reversal to fund an ongoing reduction in revenue from the fund balance, and of course it wouldn’t last for more than a few years at best. In addition, as we have shown, we have in the last few years, absorbed substantial increases in mandated programs by cost savings in current operations. This severely limits our ability to squeeze further. It is my sincere hope that all of our localities in Central New York make the protection of the property taxpayer their top priority.

When I took office, you and I agreed to invest fully a quarter of our fund balance in economic development incentives and further other investments in programs from Safe Communities to employee training to libraries. Our investments, our careful fiscal management and our economic recovery are paying off and I am very pleased to announce, our fund balance is at it’s highest level ever. An $18 million fund balance as of January 1999 is only expected to grow with an anticipated surplus in operations at the end of this year. An $18 million fund balance sounds like, and of course is, a great deal of money. It represents less than 10% of the County annual budget. If we remove the $4.5 million reserve that I call for to be put aside against the tobacco settlement, we are left with the low end of the optimal range of reserves that were recommended during your hearings last year by the accounting and financial communities; the same communities that rate our bonds and encourage or discourage investment in our community. So while I am very proud that together, we are able to achieve our greatest level of fiscal stability ever, we have not gathered money that should be squandered and we will continue to invest this money wisely.

I thank you very much for your attention and support.