The 2025 Tentative Budget for Cattaraugus County, New York State has been released and is ready for review.

Filed with the Clerk of the Legislature November 6, 2024 By John R. Searles, County Administrator.

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View or download the 2025 Tentative Budget

Schedule for Review and Adoption of the 2025 Budget

Monday, November 18, 2024

3:30 p.m. Labor Relations

3:45 p.m. Human Services

Tuesday, November 19, 2024

3:00 p.m. Development & Agriculture
3:30 p.m. County Operations/Public Safety
4:00 p.m. Public Works

Wednesday, November 20, 2024

Finance (Immediately following regularly scheduled Legislative Committee Meetings)

Tuesday, November 26, 2024

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

Introduction of the 2025 Tentative Budget

To the Honorable Members of the Cattaraugus County Legislature:

I am pleased to present to the Legislature and the residents of Cattaraugus County, the Tentative Budget for the fiscal year 2025. This budget is balanced, and as the County has done for the past twelve (12) years, it meets all thresholds pertaining to the New York State Property Tax Cap.

The average full value tax rate for taxpayers in Cattaraugus County has decreased <7.29% on a year over year basis.
This Tentative Budget proposes an average full value tax rate of $8.29/1000. This will be the sixth consecutive year
of a tax rate decrease for County residents.

As with any budget, the preparation of this budget has brought with it both opportunities, and challenges:

• Increased property values throughout the County
• Continued Investment in Capital Infrastructure throughout the County
• Decreased reliance on the use of Undesignated Fund Balance
• Reorganization of the County Youth Bureau
• OATS Bus Transportation Services
• Unfunded Mandates imposed by New York State
• Flat Sales Tax Revenues
• Declining Service Revenue projections
• Uncertainty surrounding Tribal Compact Revenues
• Finances of the County Nursing Homes

THE BUDGET LANDSCAPE

OPPORTUNITIES:

Increased Property Values (OPPORTUNITY):

Property values throughout the County have increased 10.41%. This is primarily being driven by NYS issued equalization rates, which compare actual sales of properties to assessed values of properties. While this phenomenon may not repeat itself into perpetuity, this is the second consecutive year of substantial growth in this area. Thirty-one towns and two cities have seen growth on a year over year basis.

Continued Investment in Capital Infrastructure (OPPORTUNITY):

Over the past 3 years, Cattaraugus County has made a concerted effort to maximize its investment in Capital Infrastructure. In 2025, the Capital Program, addresses an additional investment of $25,903,110 in the County roads, bridges, culverts and buildings, for the year.

This program will be funded using New York State allocations, County dollars, and the issuance of either Serial Bonds, or Bond Anticipation Notes in the amount of $4,460,749.

Decreased Reliance on the use of Undesignated Fund Balance (OPPORTUNITY):

The 2025 Tentative Budget proposes the use of $4,692,905 in Fund Balances and Reserves. This amount represents an overall $1,249,950 decrease as compared to 2024.

In order for the County to have the ability to mitigate potential current and future risks, and to ensure the stability of tax rates for the future, it is essential to deliberately begin to minimize the reliance on Fund Balance usage to address recurring costs. In this budget, Fund Balance plus Reserve usage in the General Fund amounts to $2,850,268. This represents a decrease of $1,001,313.

Total Surplus/Reserves $4,692,905

Reorganization of the County Youth Bureau (OPPORTUNITY):

For many years, the County Youth Bureau has been a stand-alone department in Cattaraugus County. This year, as the County continues to evaluate its departments, and programs, to maximize services to the taxpayers in the most efficient and cost-effective manner, the County has decided to reorganize the functions of the Youth Bureau.

This budget accommodates this reorganization by transferring the functions and duties of the department. This reorganization is able to be achieved without any layoffs of staff, or diminishment of services. Youth functions will be incorporated into the Department of Social Services, the Probation department, and the Department of Aging and Youth Services (formerly, the Department of the Aging).

OATS Bus Transportation Services (OPPORTUNITY):

In March of 2024, the City of Olean approached the County to ask that the County take over operation of the OATS Bus system (Olean Area Transportation System). This budget incorporates a provision to ensure the continuation of this transportation service for the residents of Cattaraugus County.

CHALLENGES:

Unfunded Mandates Imposed by New York State (CHALLENGE):

Each year, Cattaraugus County, as a function of New York State, is required to raise local tax dollars, which are in turn, sent to Albany to be used to fund State created, and controlled mandated programs and services.

In the 2025 Tentative Budget, the local cost of these eleven mandates is $46,661,949, which is an increase over 2024 of $2,161,910 or 4.86%.

In this Tentative Budget, these mandates represent 79.15% of the tax levy proposed, leaving the Cattaraugus County Legislature control over 20.85% of the levy for local programs and services.

Flat Sales Tax Revenues (CHALLENGE):

Sales tax represents the second largest source of revenue in the County budget. Since the start of the pandemic in early 2020, sales tax has been volatile, and difficult to predict.

In the 2024 budget, sales tax revenue projections increased slightly. Payments received year to date for 2024 are meeting budgeted expectations, however, are not indicating any potential growth for 2025.

In the 2025 Tentative Budget, the County’s portion of sales tax revenue projections were left flat, budgeted at $21,970,237 in the General Fund and $13,800,529 in the County Road Fund.

Declining Service Revenue Projections (CHALLENGE):

In the 2025 Tentative Budget, departmental service revenue projections have declined in aggregate $793,094 or 5.07% as compared to the 2024 adopted budget. While some departments have realized an increase, the largest decreases are being felt in the Health Department (10.96% decrease) and Community Services (8.95% decrease), related to direct patient care services provided.

Uncertainty Surrounding Tribal Compact Revenues (CHALLENGE):

The existing tribal compact between the State of New York and the Seneca Nation of Indians expired in December of 2023. To date, there has been no successor agreement put into place. The compact has been renewing on a quarterly basis, and the Seneca Nation of Indians continues to distribute the required funds to the State of New York.

In the 2025 Tentative Budget, Cattaraugus County conservatively budgeted $1,000,000 to account for County property tax loss for properties within the City of Salamanca that are purchased by tax exempt individuals. These properties are then removed from the County tax levy calculation.

Finances of the County Nursing Homes (CHALLENGE):

As you are aware, Cattaraugus County is the owner/operator of The Pines Healthcare & Rehabilitations Centers located in Olean and Machias. These facilities are largely funded by Medicaid, Medicare and Private Insurance. While healthcare costs continue to increase, reimbursements continue to decline. This is set upon a backdrop of staffing mandates, regulation changes, increased prescription drug costs, and inflation in general.

The Pines facilities are dependent upon Intergovernmental Transfer payments (IGT) from the State and Federal Government. These IGT payments are calculated on Medicaid patient days three years prior to the year in which they are paid. While elements of the formula used to calculate the IGT payments are known, there are unknown factors that make it difficult to adequately predict the amounts the County can expect to receive, namely the available Federal funds for Medicaid and the number of publicly owned facilities that are accessing these funds. The local match for the IGT payment is budgeted in the Department of Social Services.

The County is currently still awaiting the receipt of two IGT payments for Federal fiscal years 2023-2024, and one payment for Federal fiscal year 2024-2025. The lag in these payments creates a detrimental cash flow situation for both of our facilities.

In the 2025 Tentative Budget, it is projected that the two nursing homes will receive $7,735,179 in payments after the local match of $3,838,583 is applied. In aggregate, this is a 15% increase over amounts budgeted (yet not received) in 2024.

Although the IGT payments are helpful to the bottom line of the facilities, there is still a need to utilize reserves to cover operating deficits.

Currently, The Pines Machias, does not have any reserves available, and is operating by receiving a loan from The Pines Olean in the amount of $1,511,549. The Pines Olean must also use $173,479 of their reserves in order to balance their budget. It is important to note that these reserves are limited, and must be replenished in order to maintain operations of the facilities, without other revenue increases.

In Summary:

I would like to sincerely commend each County Department for developing their 2025 budgets within the parameters that were given to them. The adherence to these parameters has allowed me to address the opportunities and challenges detailed above, while assuring compliance with the property tax cap. I am appreciative of these efforts and offer my gratitude for the levels of professionalism and fiscal responsibility shown by all.

I compliment the staff of the County Administrator’s Office, and also commend the staff of both the Information Services Department and the staff of the Treasurer’s Office. The collaborative effort put forth by these departments allowed for the successful production of this document.

The County must remain vigilant in monitoring not only State and Federal reimbursements, but also departmental service revenues. If these revenues continue to decline, we must carefully examine how services are provided, and adapt our methods to continue to meet the needs of the taxpayers in the most effective and efficient ways.

This Tentative Budget is now subject to review and modification by you, the governing body of Cattaraugus County. I urge you to scrutinize the document, and ask questions of staff, in order to reach a comfort level with this budget,
so that you are ultimately able to vote for its passage.

The County Administrator’s Office stands ready to assist the Legislature in your review of the 2025 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