The 2022 Tentative Budget for Cattaraugus County, New York State has been released and is ready for review.

Filed with the Clerk of the Legislature November 3, 2021 By John R. Searles, County Administrator.

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View or download the 2022 Tentative Budget

Schedule for Review and Adoption of the 2022 Budget

Monday, November 8, 2021

3:00 p.m. Labor Relations

3:30 p.m. Human Services

Monday, November 15, 2021

3:00 p.m. Development & Agriculture

3:30 p.m. Public Works

4:00 p.m. County Operations/Public Safety

Thursday, November 18, 2021

6:00 p.m. Finance

Tuesday, November 23, 2021

5:00 p.m. Public Hearing and Budget Adoption

Introduction to the 2022 Tentative Budget

To The Honorable Members of the Cattaraugus County Legislature:

Welcome to the release of the 2022 Tentative Budget for Cattaraugus County.

This is the second budget delivered to you, which was developed and responds to a wide variety of issues generated by the global COVID-19 Pandemic and its associated consequences.

In many ways, the 2022 Tentative Budget proposed here is unprecedented. The traditional budgeting mechanisms of projection, past expenditures, and market trends are all subject to flux and change rapidly. To address this, the budget before you not only provides needed capacity, but also simultaneously flexibility in responding to changing environments.

Any budget can be characterized in a variety of ways, so what are some of the elements that characterize this Tentative Budget?

This budget:

• Lowers taxes for about 70%, or more than two-thirds of the municipalities in Cattaraugus County. If taxes are going up in a municipality, it is solely due to equalization rates in that municipality. The County does not control the equalization rates.
• This budget, and the associated Capital Program, address the largest multiple year investment in infrastructure and economic development in my tenure with the County.
• Anticipates a robust road, bridge and culvert program that includes both ongoing and legislatively driven elements.
• Accommodates collective bargaining expenditures and contains no layoffs.
• Addresses the animal safety issues that have become more prevalent during the pandemic.

Now is the time of unprecedented uncertainty about the future. There are concerns about major funding streams used by the County and an ever-present need to find new ways of providing programs and services.

This budget, similar to the 2021 budget, is bold, proactive, and it affirmatively addresses a positive vision for the future of Cattaraugus County. This approach is firmly anchored in an abundant faith in the resilient nature of residents of this County and our workforce in Cattaraugus County government. Collectively, we have shown that we rise to challenges and if needed, have the ability to modify direction should circumstances change.

Each budget is unique and provides its own set of challenges, opportunities, and approaches. The 2022 Tentative Budget is no different. Some of these items include:

TAX CAP

The 2022 Tentative Budget, as presented, is <$2,716,548 below the allowable tax cap limit amount. This budget meets the New York State Property Tax Cap requirements. Meeting this requirement in Cattaraugus County, is the norm rather than the exception, as this requirement has been met every year since the inception of this methodology by New York State in 2012 (11 years ago).

REVENUES

Nature of Revenues

Overall, total revenues in the 2022 budget increased $12,074,688 over 2021.

The Tentative Budget has been prepared with certain revenue assumptions regarding State and Federal funding. These assumptions use the best information we currently have available, but are projections that certainly are subject to change!

I would like to discuss six revenue impacts incorporated in this budget, namely: local sales tax, the various opioid settlements, loss of casino revenues, American Recovery Act, use of reserves/undesignated fund balance and other pandemic related resources.

Local Sales Tax

In 2022, the local sales taxes will continue to be impacted by COVID-19. In 2021, sales tax proceeds rebounded to exceed budgeted levels. In the fourth quarter of 2021, supply chain issues have begun to emerge that can affect both growth and prices, but pent up demand, in general, continues to drive sales tax growth.

In 2022, sales tax are budgeted to reflect the growth experienced in 2021. It is important to note businesses generating sales tax proceeds are changing, with internet sales surging while other sectors are not doing so well.

Overall, this budget includes an increase of $5,000,000 in sales tax revenues, $3,000,000 of which is in the General Funds and $2,000,000 of which is in the County Road fund.

Opioid Settlements

Both New York State and Cattaraugus County are actively involved in various lawsuits involving the opioid epidemic. It has been widely announced that that some settlements have been reached. However, at this time, the County cannot specify the dollar amount, the timing, or the restrictions placed upon usage of these funds. Given this, these revenues are not reflected in the 2022 Tentative Budget.

Loss of Casino Proceeds

In 2022, for the fifth year in a row, Cattaraugus County is budgeting zero for Casino proceeds tied to the increasing level of tax immune properties in the City of Salamanca. This revenue stream is currently part of an ongoing dispute between the State and the Seneca Nation.

American Recovery Act

In 2021, the Federal Government authorized the American Recovery Act, which allocated $14,784,835 in resources to Cattaraugus County over the period of Calendar years 2021 through 2026. This funding is specifically tied to eligible projects approved by both the US Department of Treasury and the Cattaraugus County Legislature. Given the tracking and audit requirements on these funds, they are not included in the overall Tentative Budget. Projects are vetted and approved and tracked in a separate Coronavirus Recovery Fund. Generally, these funds are used for non-reoccurring activities.

Use of Reserves and Undesignated Fund Balance

Refer to the "USE OF SURPLUS/RESERVES" on page 7 (labelled page 3) of the 2022 Tentative Budget

The 2022 Tentative Budget proposes the use of $8,508,267 in Fund balance. This dollar amount represents an overall increase of $2,085,937. Fund balance usage in the General Fund amounts to $2,495,126 for 2022. This represents a $63,855 increase from 2021.

The use of undesignated fund balance to address recurring costs creates a structural imbalance within the budget, in that the dollar amount appropriated needs to minimally be re-appropriated in subsequent years, to maintain operational integrity without growth.

Pandemic efforts

Throughout the pandemic there have been various revenues created and used associated with the response to COVID-19. These have included Federal, State and local funds. These funds tend to address specific needs and the costs associated with meeting those needs.

The largest recipient of pandemic funding is the Cattaraugus County Health Department. They currently have $1,766,813 in COVID funding in their 2022 budget.

Federal Emergency Management Act (FEMA) funding is also included in this budget. The 2022 Tentative Budget includes $280,094 in FEMA reimbursement.

APPROPRIATIONS/EXPENDITURES

Nature of appropriations

Appropriations/expenditures in the proposed 2022 Budget increased a grand total of $14,160,625 (5.7%) over 2021.

Federal Medicaid Assistance Percentage (FMAP) and the Intergovernmental Transfer (IGT)

Medicaid is an insurance program jointly paid for by the Federal and State government. In New York State, the State requires counties to pay a component part of the State’s Medicaid match to the Federal government for this insurance. During the pandemic, the Federal Government has agreed to pay for a larger percentage of Medicaid costs. Because of this, less local funds are needed to match, or draw down the federal share of Medicaid dollars. This results in a savings to Cattaraugus County in 2022 of <$734,267.

At the end of any given year, if the New York State share of Medicaid is not totally spent, the remaining funds are made available to nursing homes to help offset the cost associated with Medicaid eligible residents. This funding stream is called the Intergovernmental Transfer (IGT).

Both County-operated nursing homes receive significant funding through the IGT. The IGT is calculated on Medicaid patient days three years prior to the year they are paid. The basis for calculation of the 2022 IGT payments is 2019 Medicaid patient days. The 2022 budget projects that these two nursing homes will receive $3,022,340 in payments after the local match. This is a reduction of $339,760 over the 2021 budgeted amount.

Unfortunately, there is little decisive information available and the payment amount depends upon the amount of Medicaid days per facility, the available federal funds for Medicaid, and the number of publically owned facilities accessing these funds.

NYS Retirement system

Earlier in 2021, the NYS Comptroller’s Office noted that based upon positive proceeds in the stock market, the County allocation of NYS Retirement System expenses would decrease in 2022, compared to 2021. This decrease in retirement costs have been built into the associated departmental costs in the 2022 Tentative Budget; overall, this generated a $1,291,690 savings to Cattaraugus County.

Health Insurance

In 2021, the costs associated with the County’s Self-Insured Health Program have spiked compared to past years. Effectively, this effort in 2021 is tracking to be more than $2,000,000 over budget by year-end. Based on current year experience and market data, the 2022 budget reflects a significant increase ($2,848,628) in self-insured health insurance costs. This projected increase is integrated into the appropriate departmental accounts in the Tentative Budget.

Personnel/Collective bargaining

The 2022 Tentative Budget contains new positions, changed positions and abolished positions, but contains no layoffs. Please see the delineation of these items under “Supportive Documentation” on page 19 entitled “Position Actions within Departmental Budgets”.

In 2021, the County entered collective bargaining with several units who’s whole contracts lapse at the end of 2021. These negotiations are ongoing, and at the time this budget was produced, they were not settled for 2022. Given this, the Tentative Budget includes a projected provision for salary settlements.

Refer to the table "APPROPRIATIONS AND REVENUES" on page 10 (labelled page 6) of the 2022 Tentative Budget

CAPITAL PROGRAM

Every year the County produces a Capital Program that addresses road, bridge, culvert, and building related activities. This Capital Program happens to co-incident with the County Budget. This year, the program incorporates not only traditional elements, but also includes Recovery Act funding and economic development activities may be a multiple year effort.

To address this I have proposed a robust $25,389,096 Capital Program for 2022. This program heavily targets roads and paving work. Included in the 2022 budget is $4 million county dollars to be used expressly for contracted roadwork, as approved by the Legislature. This is $2 million more than 2021.

Taken as a whole, the Capital Program, integrates existing funds, State funds, County dollars and a $3,000,000 bonding program.

PROPERTY TAX LEVY

The average full value tax rate for taxpayers in Cattaraugus County decreased by $.39 per thousand or 3.43 percent.

Many factors affect assessments and tax rates, including growth in the taxable property base, appreciation of property values, and the effect of changing equalization rates and property revaluation throughout the County.

Refer to the table "REAL PROPERTY TAX" on page 11 (labelled page 7) of the 2022 Tentative Budget

IN SUMMARY

Delivering this budget to you for your consideration is the product of many dedicated staff working in unison toward a common vision. Departments and their staffs stepped up their efforts to provide you with the budget presented here. Early in this process, Departments were given threshold figures around which they needed to develop their budgets to assure that the property tax cap amounts were not breached. The vast majority of departments succeeded in this effort, and in many instances delivered budgets below the targeted amounts. Collectively, their ability to hold the line on expenses has allowed me to address emerging local issues. I remain both astounded and appreciative of these efforts. While the words seem inadequate for the skill and professionalism of all, “Thank you, all of you!”

The County needs to be ever diligent in monitoring, evaluating and reacting to changes in funding. As noted earlier, there is quite a bit of volatility in key revenue streams in 2022. Past experience proves that this can change over time. If this is not monitored and critically evaluated, the loss of State and Federal funds will de facto result in substantial reductions in the 2023 Tentative Budget. Reciprocally, the County needs to be vigilant in monitoring and reacting to enhancements in existing mandates.

I compliment the efforts of the staff of the County Administrator’s Office, and commend the staff of the Information Services Department and the staff of the Treasurer’s Office. All of these people play a vital role in the production of the attached document.

Of course, this Tentative Budget is subject to modification by you, the governing body of Cattaraugus County.

As I have noted in the past, the 2022 Tentative Budget document is a large, complex, detailed and interrelated document. This budget addresses $262,690,885 in proposed appropriations for 2022.

Today, officially we begin your review of the 2022 Tentative Budget. I urge you to ask your questions. In the end, you need to feel comfortable with a document that will be your budget for 2022. The goal is to have you reach a level of comfort with this budget, so that you are able to ultimately vote for a passage of a budget.

The County Administrator’s Office stands ready to assist the Legislature in its review of the 2022 Tentative Budget, and we will be pleased to provide any additional information or data, which may be required to assist in that review

Respectfully submitted,

John R. Searles, County Administrator & Clerk of the Legislature