The 2024 Tentative Budget for Cattaraugus County, New York State has been released and is ready for review.

Filed with the Clerk of the Legislature November 8, 2023 By John R. Searles, County Administrator.

View / Download the File

View or download the 2024 Tentative Budget

Schedule for Review and Adoption of the 2024 Budget

Monday, November 13, 2023

3:30 p.m. Labor Relations

3:45 p.m. Human Services

Tuesday, November 14, 2023

3:00 p.m. Development & Agriculture

3:30 p.m. County Operations/Public Safety

4:00 p.m. Public Works

Wednesday, November 15, 2023

5:00 p.m. Finance

Tuesday, November 21, 2023

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

To The Honorable Members of the Cattaraugus County Legislature:

Welcome to the release of the 2024 Tentative Budget for Cattaraugus County.

Every budget is developed against a backdrop of environmental factors that influence and direct its nature. This budget is no different. The 2024 budget reacts to three global environmental factors, namely: the property tax cap, the recent growth in property values in the County and the devastating impact that the most recent New York State budget has and will continue to have upon the County.

Property Tax Cap

The 2024 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 mandated methodology by New York State in 2012 (11 years ago).

Growth in property values in Cattaraugus County

Property values in Cattaraugus County, in aggregate, increased by almost 17.10% on a year over year basis. This is being driven by New York State issued equalization rates, which compare actual sales to assessed values and on a more limited basis, reassessments. The net effect is that property values increased by $940 million dollars, with six towns experiencing greater than 20% growth on a year over year comparison. Homeowners are heavily impacted by whether assessors in local towns, villages and cities are maintaining assessed values against a strong housing environment. It is important to note that there is a delay in the issuance of equalization rates. As interest rates have increased this year, the housing sales have begun to decrease. This said, this phenomena will probably not repeat itself to this magnitude in future years.

Impact of the 2023-24 New York State Budget upon Cattaraugus County and associated increases in mandates

Counties are created by and a function of State government. We are tied to factors and decisions made at the State level. This last budget approved by the State did little to assist their self-defined “partners”, Counties. Instead, the State:

• intercepted Federal revenues approved for Counties (e.g. Medicaid),
• embellished and enhanced mandates (e.g. Assigned Counsel Rate increases, foreclosure processes),
• walked away from or fumbled new revenues (e.g., a New Compact with the Seneca Nation of Indians, legalization of marijuana),
• Stifled local youth decision making (e.g. lack of adequate facilities for court ordered placements under Raise the Age—a state initiative).
• increased local cost of State mandates by $7,103,307. The costs mandated by New York State now represent 77.26% of the total tax levy for Cattaraugus County.

Now we understand the State is projecting large deficits and that all State agencies are instructed to deliver “flat” budgets. Based on recent experience this does not bode well for Counties.

The 2024 budget reflects both challenges and opportunities. In many ways, a transitional budget pivots to and prepares for the future. So let us discuss some of these items.

See "Page 3", actually Page 7, of the 2024 Tentative Budget file (File Type: PDF; File Size: ~4.3 MB) for the Appropriations and Revenues section.

Appropriations / Expenditures

Nature of appropriations

Appropriations/expenditures in the proposed 2024 Budget increase a grand total of $16,179,421, or 5.914% over 2023. I would now like to discuss four major expenditures included in this budget, namely: Medicaid and related issues, the growth of New York State mandates, self-insured health insurance, and personnel/collective bargaining.

Medicaid, Enhanced Federal Medicaid Assistance Percentage (eFMAP) and the Intergovernmental Transfer (IGT)

Medicaid is an insurance program jointly paid for by the Federal and State governments. 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. After the passage of the Affordable Care Act (ACA), the Federal Government agreed to pay for a larger percentage of Medicaid costs. This percentage is called the enhanced Federal Medical Assistance Percentage (eFMAP). Because of this higher percentage of Federal dollars, the percentage cost of Medicaid to the State and the Counties decreased, yet the program itself significantly increased statewide. In the last NYS Budget, they authorized the intercept of this Federal revenue to retain it for their usage.

The local share of Medicaid is an expensive line item in this budget. This line item in 2024 is budgeted at $20,579,977, a growth of $3,526,403 (+20.67%) over 2023.

At the end of any given year, if the NYS 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 2024 IGT payments is 2021 Medicaid patient days. The 2024 budget projects that the two county nursing homes will receive $6,726,244 in payments after the local match is applied. This is an increase of $2,525,541 over 2023, $1,253,891 for Olean and $1,271,650 for Machias.

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.

It is noteworthy that the local share of funds to match the IGT payments to the nursing homes is resident in the Medicaid account of the Department of Social Services. In 2024, this local match is $3,337,898. Literally, this is an expense for the Department of Social Services and a revenue for the Department of Nursing Homes. Because the basis for calculation of the IGT in past years, the county does realize a small benefit in the match based upon FMAP.

New York State Mandates

Dictionary.com defines a mandate as “to order or require”. Cattaraugus County was created as a function of New York State, and the State regularly requires counties to provide and pay for certain services. Cattaraugus County tracks the impact of eleven New York State mandates upon the County budget. The local cost of these mandates in 2024 is $44,500,039, up from $37,396,732 in 2023, an annual increase of $7,103,307 (a 19% year over year increase). When you pay for the increase in these mandates, the Cattaraugus Legislature only controls 22.74% of the 2024 budget, mandates consume 77.26% of the levy. In one year, you lost local control of an additional <9.6% of your levy.

Health Insurance and prescription drugs

In 2024, the costs associated with the County’s Self Insured Health Insurance Program are budgeted at $25,060,616, compared to $25,201,435 for 2023. This represents a year over year decrease of <$140,819 based on usage.

Personnel/Collective bargaining

The 2024 Tentative Budget does contain a few new positions, some changed positions and abolished positions. Please see the attached chart for the delineation of these items. Currently, contracts are in place with all collective bargaining units and the budget reflects agreed upon collectively bargained items.

REVENUES

Nature of Revenues

Overall, total revenues in the 2024 budget increased $13,831,000 over 2023.

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 they are projections that certainly are subject to change!

I would now like to discuss four revenue impacts incorporated in this budget, namely: local sales tax, Casino revenues, American Recovery Act, and the use of reserves/undesignated fund balance.

Local Sales Tax

In 2024, sales taxes are budgeted to reflect small, conservative growth over collections experienced in 2023. Sales taxes can be tricky to project, as they are sometimes volatile and subject to adjustments.

Overall, this budget includes a $1,931502 increase in sales tax revenues, $1,231,447 of which is in the General Funds and $700,054 of which is in the County Road fund.

Casino proceeds

As this budget is prepared, the existing compact between the State of New York and the Seneca Nation of Indians is due to expire in the last quarter of 2023. Since there currently is no successor agreement, nothing is budgeted in 2024 for this revenue. The 2023 budget acknowledged and budgeted for $1,449,029 in Casino collections specifically tied to loss of County property taxes coming off the levy in the City of Salamanca, due to properties being owned or purchased by tax-exempt individuals or entities in the City. Additional Casino funds collected in the past were used for economic development projects. Again, as this budget is presented, it includes no Casino revenues for 2024; this has a very real impact on operations and our ability to assist new and emerging businesses.

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 Calendar years 2021 to 2026. This funding is specifically tied to eligible projects approved by both the US Department of the Treasury and the Cattaraugus County Legislature. Given the tracking and audit requirements on these funds, these items are not included in the overall tentative budget. Projects are vetted and approved; and they are tracked in a separate Coronavirus Recovery Fund. Generally, these funds are used for non-reoccurring activities.

In 2024, the remaining $2 million dollars of this money is being committed to the County’s road program. With the adoption of this budget and the capital plan, all funds available are committed and will be spent within the Federal timelines.

Use of reserves and undesignated fund balance

View the "Use of reserves and undesignated fund balance" table on "Page 6", actually Page 10 of the 2024 Tentative Budget file (File Type: PDF; File Size: ~4.3 MB).

The 2024 Tentative Budget proposes the use of $4,942,855 in Fund balances. This dollar amount represents an overall a decrease of <$2,418,835 compared to 2023. Fund balance usage in the General Fund amounts to $2,757,581 for 2024. This represents a $113,503 increase from 2023.

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. The philosophy in this year’s budget was to minimize or at least reduce reliance on the use of fund balances.

CAPITAL PROGRAM

Every year the County produces a Capital Program that addresses road, bridge, culvert, and building related activities for the upcoming year. The 2024 Capital Program is released 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 that may be a multiple year effort.

To address this, I have proposed a $26,735,220 Capital Program for 2024. This program heavily targets roads and paving work by the Legislature.

Taken as a whole the Capital Program, integrates existing funds, State funds, County dollars and a $6,382,950 bonding program.

This capital program was released to the Legislature earlier this month and is being reviewed by the Finance committee of the Legislature.

PROPERTY TAX LEVY

On a year over year basis, the property tax levy, from 2023 to 2024 is increasing by 4.25%. It is well within the Property Tax Cap allowance set by New York State.

The average full value tax rate for taxpayers in Cattaraugus County decreased to $8.94, compared to $10.05 in 2023, a <10.97 percent decrease, this is the largest decrease since 1988.

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

View the "REAL PROPERTY TAX: Comparative County-Wide Tax Data" table on "Page 7", actually Page 11 of the 2024 Tentative Budget file (File Type: PDF; File Size: ~4.3 MB).

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 was not breached. The vast majority of your 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 2023. Experience notes 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 2024 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 2023 Tentative Budget document is a large, complex, detailed and interrelated document. This budget addresses $ 289,738,408 in proposed appropriations for 2024.

Today, officially, we begin your review of the tentative 2024 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 2024. The goal is to have you reach a level of comfort with this budget, so that you are able to ultimately vote for passage of a budget.

The County Administrator’s Office stands ready to assist the Legislature in its review of the 2024 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

View / Download the entire 2024 Tentative Budget file (File Type: PDF; File Size: ~4.3 MB).