Rye Could Increase Parking Fees, Cut Library and Recreation Services to Balance 2011 budget

Faced with dwindling revenues in almost every sector, Rye may have to increase its tax rate by 10 percent and cut services, jobs and programs at the Rye Free Reading Room and the Rye Recreation Department—and possibly double parking meter and permit fees—to balance its 2011 budget.

The Rye City Council held a special meeting Monday to discuss the preliminary 2011 budget and the city's overall financials. The picture, to say the least, was bleak, with city officials warning residents that cuts in services and tax increases were inevitable.

The city will not adopt its 2011 budget until December, but wanted to begin the budget process early because, like other municipalities, it is facing several fiscal challenges, Mayor Doug French said.

"All of our revenue sources are drying up," he said. "This is so serious and requires a fundamental shift in our thinking that we have to start this process now."

According to an auditor's report of the city's 2009 financials, Rye anticipated receiving $28.8 million in revenues last year, but only took in $28. 3 million. Sales tax revenue is down $238,000, while mortgage tax receipts have also decreased by $700,000 because of declines in home values and home sales.

The city has also generated less money from other revenue sources. Building permit revenues are down $158,000 compared to 2008 and Rye's interest earnings also declined by $300,000.

The city has dipped into its reserves to pay for some of these added expenses. In its $52 million 2010 budget, the city estimated that it would have to use $2.7 million of its fund balance, which is essentially its savings account, to provide tax relief for residents.

However, the city has only had to use $1.1. million of its fund balance to cover increased expenses. But that news was a bright spot in an otherwise disheartening overview: The city's fund balance has dropped from $13.3 million in 2007 to $9.8 million in 2010.

City Comptroller Jean Gribbins said the city has been conservative in estimating its budget, but will need to reduce service levels in order to reduce expenses.

Gribbins gave a preliminary overview of the city's 2011 budget Monday, saying that a 25 percent year-to-year increase in health insurance premiums—an amount that totals $948,00 in additional costs this year—will cause the city to not fill 6 positions that will be vacant when several members of the city's staff retire in 2010.

Gribbins also said the city may have to ask the Recreation department to generate an additional $380,000 in revenues and cost savings, which would offset the tax increase by 2 percent, but result in increasing costs for several programs and cutting many others, which would impact Rye students who typically find work in the summer within the Recreation department.

The Rye Free Reading Room could also face nearly $200,000 in reduced funding. The city  awarded $1.1 million in funding to the library in its 2010 budget, but this year's possible cuts would reduce materials and programs for library patrons, postpone building repairs and maintenance and leave one full time position unfilled.

Rye may also have to double the parking fees for all parking permits and parking meters, Gribbins said. The increases would reduce the tax rate by another 3 percent, but the city would have to negotiate with Metro-North officials to raise prices at the parking lot by the train station.

The Rye City Council will hold a follow-up meeting on June 28 before city staff begins to prepare the budget on July 1.