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Tuesday, October 11, 2016

No Tax Increase – Part 1

Workers' Compensation according to Wikipedia is “a form of insurance providing wage replacement and medical benefits to employees injured in the course of employment in exchange for mandatory relinquishment of the employee's right to sue his or her employer for the tort of negligence.”

Workers' Compensation is provided to ALL employees whether they work behind a desk or drive a truck. The Town of New Hartford is part of the county self-insurance program so each year the town is billed an amount for administrative charges which up to 2017 have been based on assessed value.

However, in 2016 after Tyksinski raised some questions, the Oneida County Board of Legislators adopted a resolution so that starting in 2017, the administrative charges are to be billed based on payroll. Respective of how the county bills the town for administative costs, each of the funds with payroll should be taxed their fair share of the administrative costs.

Additionally, the total town contribution is also based on a 5-year rolling claims average which would depend upon the claims filed; that cost should be attributed to the department that has claims filed.

To begin the discussion, let’s get some town finance basics. First of all, the Town of New Hartford does not have a comptroller. Tyksinski tried to create the position a few years ago, but the town board rejected his suggestion preferring to allow the town board to continue their role as oversight of finances.

However, other than town board audit of the bills each month, Tyksinski continues to act as though he is the comptroller and has failed to bring financial decisions before the board which is probably why he has chosen to not have a meeting prior to the Public Hearing on the 2017 budget. Yet the town councilmen remain silent!

About town law…

By town law, transfers have to be approved by the board. Transfers between funds where taxes are not collected from the same taxpayers are considered loans and can only be made by board approval and town finance law requires that interest is paid.

The major funds we will be discussing for Workers' Compensation are:
  • General Wholetown – taxes paid by everyone including the two villages of New Hartford & New York Mills.
  • General Part Town – taxes paid only by residents outside of the two villages
  • Highway Part Town – taxes paid only by residents outside of the two villages
  • Police – taxes paid by all residents except those in the village of New York Mills
  • Sewer Fund – taxes paid by residents outside of the two villages who are included in the sewer district
  • Willowvale Fire District – taxes paid by residents served by the Willowvale Company
Town Law Section 125 says in part:
The supervisor shall keep in his records, in such manner and form as the state department of audit and control may direct, a separate account with every appropriation for which funds are appropriated or raised by tax.  He shall state in every check or draft drawn by him the fund against which it is drawn and the appropriate account chargeable therewith.  He shall not permit any fund or appropriation account to be overdrawn at any time nor draw upon one fund or appropriation account to pay a claim chargeable to another (underlining added by me).  In a town in which there shall be no town comptroller no money shall be paid out by the supervisor except upon the warrant, order or draft of the town clerk, after audit and allowance by the town board.
What the underlined portion of Town Law 125 says, for example, is that expenses that are supposed to be charged to the Police fund cannot be instead charged to General Whole Town because the taxes are paid by two different groups of taxpayers.

With all that in mind, I have prepared a spreadsheet to help me show how expenses have been manipulated from at least 2015 to the current 2017 Tentative Budget.

I used adopted budgets for 2015, 2016 along with the 2017 Tentative Budget to create my worksheet. I have listed total wages and benefits budgeted for each fund that has employees as well as the volunteer Willowvale Fire Company because they too have been tapped for workers comp expense even if they don’t have any paid employees; however, they are covered under the town's workers' compensation.

The funds are separated by year and sorted each year by the lowest total wages to the highest total wages based on figures in the town budget. For clarity, I color-coded the funds that were tapped for worker comp expense each year.

To view or download the pdf to your computer, click on the image!

Immediately after looking at the color-coded spreadsheet, it is almost impossible to not notice that the funds tapped for the expense are different each year contrary to Town Law Section 125. In 2017, they even include the Willowvale Fire Dept. even though they have no paid employees. Willowvale Fire Co. taxpayers also were taxed for workers comp in the 2016 budget.

Next, you might notice that the amount expensed each year has nothing to do with the total wages budgeted in each fund. Keep in mind that employers must pay workers' compensation for each employee and the town cannot use one fund to cover the expenses of another fund. For instance, the Willowvale Fire District with no payroll was taxed for $22,600 in 2016, while General Wholetown which has the second highest payroll was only taxed for $30,000. Quite obviously, Willowvale Fire District taxpayers are not being fairly taxed.

As someone who once made her career working with numbers, I have to tell you these numbers make no sense. Interesting, but what will make it even more interesting is what funds actually paid the workers' comp expense in 2015 and 2016 and how much they each paid toward the total cost.

Why would the town supervisor produce a budget that does not comply with town law? Because if the expenses were properly distributed to the right funds, the tax rate would not show a zero tax increase.

Stay tuned…I have more information and another spreadsheet to share in a couple of days!


Anonymous said...

Hocus Pocus! Poof! Here's your budget!

Thank you for this article, it lays it out in spades.

Anonymous said...

Why isn't the willowvale fire dept more vocal about this? do they not care? this isn't right for the people they're taking the money from? How does this effect the other paid career fire depts in our town - NYM and NH???