November 16, 1998

Westchester County Board of Legislators
800 Michaelian Office Building
White Plains, New York 10601

Honorable Members of the Board:

I am pleased to transmit the proposed 1999 Operating Budget for County Operations, the first to be prepared by my administration. We have spent untold hours to accomplish our three main objectives:

1. A REDUCTION IN PROPERTY TAXES
2. AN EASY TO READ AND EASY TO UNDERSTAND "TAXPAYER FRIENDLY" BUDGET FORMAT
3. A RE-ENGINEERING OF GOVERNMENT OPERATIONS, THROUGH THE USE OF TECHNOLGY, TO PROVIDE SERVICES THAT ARE MORE COST EFFECTIVE AND EFFICIENT FOR WESTCHESTER RESIDENTS

PROPERTY TAX RELIEF: Tax Levy Decreases
I made a pledge to Westchester taxpayers that I would reduce the cost of government. I am well aware, as all of you are that escalating taxes are a tremendous burden on our residents and our businesses. That is why I am especially proud that I have been able to decrease the county property tax by $1,045,066, which is a reduction in the tax levy of .29%. While it may appear modest, this decrease is the largest tax reduction proposed by a County Executive in this decade. The proposed General Fund tax levy for 1999 is $364,506,671 versus the 1998 tax levy of $365,551,737.

It was not easy to accomplish. For while we were able to decrease those areas of the budget where we had control, most of this decrease was offset by an overwhelming increase in the uncontrolled costs of one State mandated program. Costs for part of this program, called Services for Children with Disabilities should have been reimbursed by the State to the County at a rate of 75%. However, the State has not honored this commitment, which has left us no choice but to increase taxpayer support of this program in 1999 by $5,884,700. If the State had paid its fair share, the County tax levy would have been reduced by an another $5.4 million for a total decrease of almost 1.8%.

PROPERTY TAX RELIEF: 1998 Actions
My commitment to implement taxpayer savings began in the earliest days of my administration. The following actions were taken during 1998:

• We immediately decreased my salary and the salaries of my commissioners and executives. We rescinded the law that allowed elected officials to buy their own office furniture and we eliminated positions in my own department budget, and consolidated the balance of two departments for total savings of $346,000.
  
• We recommended the elimination of the Department of General Services for initial savings of $500,000, which your Board recently passed. This savings will be effectuated with your adoption of the 1999 budget.

• We saved over $400,000 by canceling the plan to build an executive lounge at the airport.

• We re-negotiated the purchase price of the Central Bus Maintenance Garage in Yonkers saving $500,000.

• We submitted to your Board, a request to create a new Department of Investigations to provide for a completely independent office to root out any waste, fraud or abuse in government.

• In a new era of municipal cooperation between local governments and the business community, we argued successfully that any elimination of the sales tax on clothing would mean an increase in property taxes.

 PROPERTY TAX RELIEF: 1999

County Executive’s Budget
The reductions I began in my own department in 1998 continue in 1999 for a total savings of $500,000. This has been accomplished by eliminating six positions; consolidating functions, reducing expenditures and eliminating trust accounts. The divisions of Governmental Operations and Cultural Affairs have been abolished with functions redistributed to remaining divisions. At the same time, we have reestablished the Offices of Youth, Aging, Disabled, Veterans Services and Women as separate, identifiable units.

Department of Social Services
I mentioned earlier that the reduction in the County property tax would have been far greater had it not been for uncontrolled State mandates. To illustrate my point further, one of the ways we have been able to decrease taxes results from our ability to manage spending in those mandated areas where the County does exercise some measure of control.

For example, we are estimating a budgeted decrease of $8.4 million in the relief expenditures of the Department of Social Services. Our Power Plus program has even exceeded my original goal of a net reduction of 550 caseloads a year. By changing to a more holistic approach that combines job training, education, child care, transportation and housing and by initiating aggressive programs that lead to ultimate self-sufficiency, we have reduced the 1998 caseload by 700 and we expect to experience continued case load reductions in 1999.

Administrative Reductions
This proposed budget shows the elimination of 141 vacant positions in all departments. Sixteen new positions have been funded, leaving an overall net reduction of 125 positions. This translates into an annual savings of approximately $5 million. While a net reduction of 125 budgeted lines occurs between 1998 and 1999, the County’s overall position count increases to 4912 from 4852 due to the inclusion of approximately 185 lines previously hidden in trust accounts that have been incorporated into my proposed 1999 Budget. I have challenged my Commissioners to do what I have done with my own department: to continue to look for additional ways to automate and consolidate services for increased savings. While vacant positions have been abolished, potential salary settlements with other bargaining units have been fully funded at the same level as the CSEA.

Travel accounts have been reduced across the board by $40,496 or 4.5% less than 1998 as more emphasis is placed on tele-conferencing. Any increases in travel accounts are directly related to union contract mandated reimbursement. Although travel will continue to be monitored closely, the need for the County to invest in educational training for our employees to keep them current on the latest changes in their fields is a high priority for my administration and funding reflects that priority.

I am reducing by 23 the number of vehicles in the County fleet. By also reducing the number of assigned vehicles by 15, we are actually making more cars available to our employees during the day. At the same time, I am proposing an expenditure of $552,000 to replace 48 cars in our aging fleet. The routine replacement of vehicles has been an easy budget cut for the past seven years, which we can no longer afford. Many of our County employees rely on the fleet to provide vital health and social services to our citizens. They should feel safe about driving them.

The first year of the lease with the New York State Dormitory Authority for the construction of a new Courthouse appears in the 1999 Department of Public Works budget. The lease payment of $7.7 million is offset by the same dollar amount from bond proceed revenue. The financing has allowed us to capitalize interest until beneficial occupancy of the building in 2002. By including the lease payment in the Operating Budget the County is able to collect $2 million in Court Facilities State Aid.

Advocacy Groups Held Harmless
While we have made reductions in the cost of government to our taxpayers, we have not jeopardized the level of funding given to our various advocacy groups whose tremendous contributions add immeasurably to our County’s quality of life. In many cases, these organizations received increases in the 1998 budget. These increases have been held intact for 1999.

Westchester Health Care Corporation (WCHCC)
I am pleased to be able to report a new era of cooperation between the County and the newly formed Public Benefit Corporation (WCHCC). Reflected in my 1999 budget recommendations are the results of seven months of mutually productive discussions; an improved Operating (Transition) and Lease Agreement that is better for the County and better for the Corporation.

I am requesting $26 million for support to WCHCC, which is a decrease of $4.6 million or 15% from the 1998 contribution. As a result of our negotiations, this decrease will not result in any diminution of medical services to the citizens of the County nor will it be a one shot reduction. Over the life of the revised Transition Agreement, the decrease in County support to WCHCC will decline to zero. In addition to the decrease in the County tax levy contribution to WCHCC, the credit support to the Corporation is being reduced by $10 million to $85 million. Both are significant impacts on the 1999 and future budgets.

TAXPAYER FRIENDLY BUDGET:
To say that the County Budget is difficult to understand is a gross understatement. Even before I was elected I made a commitment to the people of Westchester that they would know where their money goes; that the budget would have nothing to hide and that its information would not be hidden from our taxpayers. The process to create such a document, separate and distinct from the primary budget volume, began to be implemented in the earliest days of my administration.

Released for the first time today is the premier edition of the "Taxpayer Friendly Budget". It is the result of months of work by a task force established by Legislator Richard Wishnie, Chairman of the Board’s Budget and Appropriation Committee, and myself. It was comprised of my Chief Advisor, the Budget Director, Commissioner of Finance, the League of Women Voters, the Board of Legislators Citizens Budget Advisory Committee, and the Board’s auditors. It is a document in transition and all comments for improvements are welcome.

The "Taxpayer Friendly Budget" provides a clear summary of how our tax dollars are spent, an overview of the 1999 budget for the basic operations of County government, an explanation of the County’s budgetary and fiscal policies, financial organization and the budgetary process. It is designed to be a budget-at-a-glance for those who do not have the time or inclination to wade through the main budget. For the widest possible dissemination, we have made it available on the County’s web site:  http://www.co.westchester.ny.us/operatingbdgt.

Changes in the main Operating Budget are a bit more difficult to make as the document serves not only for presentation purposes, but also as the County’s main accounting document. In spite of these constraints, I have directed the Budget Department to make significant changes so that it, too, is easier to follow. These include:

• Inclusion of trusts and grants with the department that is responsible for managing them.

• A summary schedule at the front of each department that includes the sources of all funding for department operations.

• A full forecast, including revenues, is presented for each department.

• Subtotals by major category of expense are shown for each department.

• Positions formerly in trust accounts that more appropriately belong in departmental budgets have been included.

• All positions formerly in expense accounts are now reflected in Personal Services

 FOCUS ON TECHNOLOGY:
As I said in my State of the County Message, it is time for technology to make a positive impact on our government. The creation in 1998 of the new position of Chief Information Officer was an auspicious beginning. By creating a new consolidated Department of Information Technology in 1999, we will continue to make government more efficient, less expensive and more accessible.

By expanding our web site to include information from every department, we have made government more accessible to the public and we have created a vehicle to respond to their concerns.

• By placing such items as the Cultural Calendar of Events on the web, we have reduced administrative and printing costs.

• By our aggressive effort to replace major systems in County government with newer more effective software, we expect to start seeing major productivity increases in several departments starting by the end of next year. These include the larger departments -- Health, Social Services, Correction, Probation, Personnel, and Finance -- as well as the County Clerk and the Board of Elections.

• We expect that by the end of 1999, we will have completed the majority of the work necessary to eliminate the expensive, multi-million dollar mainframe computers and replace them with much less costly newer computing technology.

 PROBLEMS TO BE RESOLVED:
While I am pleased to be able to give our taxpayers a realistic budget that combines a tax levy decrease with the maintenance of popular programs and services, I foresee several problems that must be addressed so that we can continue to move in this direction.

The Correction Department remains a serious issue. This past year, with no decrease in security or safety, we received approval from the State Department of Correction to change staffing and eliminate 22 positions, as a cost savings initiative. However, with the continuous rise in sick/injury claims, we are not going to realize the savings we had anticipated. This remains one of my highest priorities of 1999 and I will soon release the report of the Corrections Task Force I created to look at the Department and this issue, in particular.

Uncontrolled State mandates remain a major concern. As long as the State continues to under-fund programs such as Services for Children with Disabilities, our taxpayers will continue to pay an unfair burden. If the State had honored its commitment, we would have realized a savings of over $26 million over the past 10 years. In 1999 alone, the savings would have been $5.4 million for a tax levy decrease of 1.5%. I have recently announced a task force to review this problem and I will not rest until we have made progress in this area.

CONCLUSION:
As we approach the new millennium, Westchester County remains in excellent financial health. Once again we have received a Triple A Bond Rating from all three rating agencies, the only county in New York State and one of the few in the nation to be so highly rated.

The budget I submit to you today is a tight one, but a realistic one. It does not decrease services, but it does decrease taxes. It is fiscally sound, and I believe puts us on sound footing for the future.

In one short year, we have begun to re-engineer the way we operate. We have eliminated positions; we have saved money; the burden on our taxpayers is less. We have brought new focus on economic development and technology, without losing sight of our highest priority: to help those who need our services. We have ushered in a new era of communication and cooperation with the Board of Legislators, the Council of Governments, the business community, the education community, the Westchester County Health Care Corporation, the unions and our advocacy groups. We are working harmoniously.

My administration stands ready to assist your Honorable Board in the review of my 1999 Proposed Operating Budget. I respectfully request its adoption.

Respectfully submitted,

Andrew J. Spano
County Executive