Common Council to vote on $19.8 million city budget Tuesday

By RICK MILLER

Olean Star

OLEAN — Finance Committee Chairman Sonya McCall hopes to pass the 2025-26 Olean city budget with its 6% property tax hike on Tuesday night as planned.

The Common Council hasn’t made any cuts in the tentative $19.8 million general fund or the sewer and water funds, which bring the budget to $29.1 million.

The proposed $4.79 million sewer budget is up $292,000 and the $4.5 million water department budget is up $219,000. Look for a 4% increase in the water rates, but no sewer rate hike.

Alderman David Anastasia, D-Ward 7, pushed his colleagues last week to consider cutting the proposed increase by one-third. If the budget were cut by $144,000, the tax rate could go down from 6% to 4%, he said.

Anastasia also asked if there could be a personnel feasibility study to determine if the city could get by with fewer employees by not replacing retirees or others who leave.

Mayor Bill Aiello said if the council directed, the city could look for money to fund such a study.

McCall noted that keeping property taxes low had bought the city’s general fund to the point where it needs more to operate. City salaries and fringe benefits take up more than 70% of the budget, she said. That leaves about 24% for everything else.

McCall pointed out that from 2011 to 2022, the property tax increase was 1% or below.

Alderman Jennifer Forney, R-Ward 3, voiced support for the 6%. It’s hard to make enough adjustments to get to

2%, but without 6% this year “We’ll be in the same position next year.”

Aldermen have approved a resolution to exceed the state’s 2% tax cap in the 2025-26 budget..

One reason this tentative budget is so difficult for city officials to work with is a $1 million shortfall in sales tax revenue. While the mayor imposed a spending and hiring freeze, it’s unclear how much the city can cut spending in the fiscal year ends May 31. The council passed a resolution calling for a more conservative estimate of sales tax revenues — 90% of the previous year’s receipts.

The 2025-26 general fund budget is more than $600,000 less than the current budget. State aid is also down by $513,000 to $2.88 million.

The tentative tax rate is $17.77 per $1,000 assessed value, up from $16.71. Assessed value in the city dropped from $482,000,000 to $478,588,683.

There is $104,000 in new revenue from North Union Street parking fees, although it’s unclear how much profit there would be after hiring a parking enforcement officer. The city is looking at using a cellphone based parking system with a QR code to pay for minutes.

McCall said, “None of us relish raising taxes,” but the 1.3% average property tax increase since 2011 leaves the council with little choice.

Council President made a bid to take up to $50,000 from the city’s fund balance — about $1.2 million — to pay for needed repairs to city infrastructure without having to come back to the council.

City Assessor Lens Martial replied, “That’s why we are where we are now?”

The city added $400,000 to its fund balance last year. It’s unclear where this year’s fund balance will end up.

___________________________________________