Montgomery Coun

Board of Supervisors 20 Park St., PO Box 1500

Office (518) 8s3-4304 Fonda, NY 12068-1500
Fax (518) 853-8220

May 4,2011

Mayor & City Council Members

Corporation Counsel
City of Amsterdam
61 Church Street
Amsterdam, NY 12010

Dear Mayor Thane:

On behalf of myself and many of my colleagues in Montgomery County I would like to address the City
of Amsterdam's ill-advised proposed water rate increase for the 201 1-2012 budget, which is at best, a
band-aid approach to a long term problem of un-sustainability created by a continued pattern of
increased spending and decreasing revenues. In addition, it is an affront to every constituent in the City
who approved a 3o/o tax cap and to the County and Towns who negotiated agreements in good faith with
the City to extend water and sewer services to the Towns on behalf of the County's residents and
businesses. Outside users, which include some of the largest employers in the County, are already
paying one and half times for these services and the message this sends to any existing and potential
company or resident is one of indifference. In our opinion only, to many of us, it has the appearance
that the City finds itself targeting the City's water resources in order to balance the budget; deferring the
hard decisions to future Administrations and Councils to the detriment of their constituents, already
burdened by some of the highest property taxes in the nation. It is not our intent to question your
administrative duties within the City of Amsterdam, but we will not apologize for the ill affects this
decision would have on our constituencies.

in November 2008, the City of Amsterdam, Montgomery County Industrial Development Agency and
Town of Florida and HeroiBeech Nut entered into a Hero/Joint Municipal Agreement, aft.er successful
negotiations with HerolBeech-Nut, Montgomery County, and New York State -to retain the Company's
presence here in the County as well as relocate their corporate headquarters to the new facility. This
agreement is the financial foundation for the necessary upgrades to accommodate the new facility in the
Florida Business Park. ThLe majority of these upgrades were required due to the age of the system and
would have had to occur in the near future at the City's expense regardless of the Hero/Beech Nut
project. Per the Agreement the City received well over $4 rnillion in water and sewer improvements due
to this single project, when the majority of the expense would have been born by the City if it weren't
for the auspicious timing of the project. Not only did this project allow the City to remedy some long
standing issues with their wastewater treatment plant but corrected an ongoing low-pressure situation on
the South side as well.

www.co.montgomery. ny. us
 Montgomery County
Board of Supervisors 20 Park St., PO Box 1500
Office (518) 853-4304 Fonda, NY f2068-1500
Fax (518) 853-8220
During negotiations regarding the Extension, the City of Amsterdam requested a greater portion of the
County Sales Tax Revenue prior to approving the extension of water and sewer services to the park
Extension. Upon reaching a consensus, the County of Board of Supervisors in April 2009 approved a
new Sales Tax agreement throughout the County in order to 'foster economic growth, inter-iunicipal
cooperation and long-term stability". This agreement went into effect in the third quarter of 2009 when
the City of Amsterdam received their first sales tax payment under these new terms.

Since this iime, the City has received an additional $833,131.22 in sales tax revenue as compared to the
amount they would have received under the prior distribution formula before the good faith negotiations
took place. This figure does not take into account the additional sales tax revenues that will be received
directly from the Towns of Amsterdam and Florida based upon separately negotiated agreements
between the two towns and the City.

The parties involved entered into the aforementioned agreements with the full understanding that
continued economic growth would lead to future sustainability of the County and City. Furthermore,
such future cooperative agreements, based on mutual trust and understanding, will be required for
continued growth. The parties recognize the value of both water and land in the efforts toward realizing
growth in the tax base and job creation. In fact, it is this recognition and compromise that call for the
provisions in the agreements to charge outside users one and half times the amount of that charged to
inside users. Should the City decide to continue fbrward with the course of action laid out in this
budget, one would have to question whether any additional mutually beneficial agreements, such as the
agreements discussed in this letter will ever come to fruition again.

The City, we believe, wants to position itself as a business friendly, attractive place to work and live, yet
takes actions portraying the exact opposite message, and it is with this that we ask that you reconsider
your increase in water rates and consider the tough choices that you were elected by the people to make
and not hinder the future prosperity of this community we all call home.

Sincerely,

-f/,- | fl",/t,--
Thornas L. Quackenbush, Chainnan
Montgomery County Board of Supervisors

Cc: Montgomery County Board of Supervisors

Heather Reynicke, City Comptroller
Susan Alibozek, City Clerk
Media

www.co.montgomery. ny. us
 M*y S, 3*1:

Mr. Thcn"ras Queckenbush, fhairman

M*ntErnnery e*unty ffi*ard *f Supervirors
?fi F*nk $t., P* Ssx L5S*
F*nda, New Ysrk E3*SS-1$SS

Dear thairman Quaekcnb*sh :

I have re*d y*r*r ietter *f l4*y 4, 2011" and i* appears thnt y*u
h*ve several fundamentai misesnc*ptions regarding taxes cnd the
best interests *f th* tity *f Amsterdam.

First, sc|:**l *nd r*unty tax*s arE levisd at a high*r rate than city
taxes nnd hav* ir:creased at a higher rfit€ *ver the last *ecad*. I
'::' , i'.':' {," {.}i::'tlt I I ., "f
'}.'tr:
have *ncl*sed n $pre*d$he*t det*iiing the tax rates irnpcsed *n
1.. ri 1 i '!. iii{,; lll';} t"f' city r*slder:ts from thc fiscai year 3*0*-20*1 t* the present day,
s* that y*rr m*y verify this fundamentel truth, {"}sing e$tirfiates of
th* scho*! tax r*te end city tax rate for ?*33-?fi1^?' the e*mulative
iner*ase fr*m ?*S*-?#*1 is 49"5s/* fcr the schscl tax rate, 38"93CI/o
for the **unty tex rete and ?6"41"s/c for the city tax rate. These
high i*cr*ases from the c*xr:ty *nd sch**l taxes are detriment*l t*
pr*psrty v*lrJes *n*l h*ve a tnemend*gs ?rfipagt *n eity taxpay*rs-

$*c*nd, sn€ *f the primary $tratesies fotrlawed by the ei$ *f

&rr"lst*rdam is tfr earn rev€Flu* fr*rn the saln *f w*t*r" Thi* g*ai
har *nj*ycd icng standing sLrPSOrt frcm city rssid*fits, If ws w*r*
n*t t* r*i$* the weter rstc, City r€sidsnts w*ul* *fi!-i"l n0 benefit
fr*n'l the $alfr *f waf*r. The r*vsnu* would merely c*Ver *Xper"1$e$.
,{ss*m!nE w* sh*uld *perete #*\r*rilffient like a businesE wh**
pr*ctical" why wculd ws *h**se t* *nrn nothing fr*m the s*le *f
*ur res*ure€$? Cle*rly, f*r city resid€fits t* beneflt frsm the 5*l€ *f
water, this is th* **ly strntegy thnt n"lak*s s*ns*. An increas* in
the weter r*t* pn*du**s revqfiue at e IOW*p c*st t* city t*xpnyers
th*n an incrs*s* in the city Fr*perty tax rate. Th* }s/e tap that
w*s S'eC*d tn t*is rat€ had the unforesasn negfitiv€ **r:seqil*ilc*
*f destroyinE th* clty's ebility t* sell its watsr arld *crn enything
from th* ssl*. fver: if, th* *ity budg*t b*ard elects to reduce
g*n*rfi: fur:d expendit*res the water rate shCIt:td stilt be incremsed
*s prapss*du h*weve r, ihe city property tax r*te 5h*uld th*n be
{*1, a$ that w*uld provide th* maxirnum t*x rellef f*r rity
resid*r':ts"
! t-Jrrrri.i) nir') I i

i r, r .i1:!t3i{'iit:tl}lllr,llit!
iji ii ll- llil l ),, r;'ilii-t'.i:l-l;iir',]
i, i r !l' iaii11l,r "i r|i!r' tllili:,i21r,1
 Tlrird, th* pr"*p*s** il**r f** incres** is n*t pcrticulnrty unique in
magnitxde. Ifl the *s*r f** ral*s are *na*t*d *s pr*p*sed, the
effect ** a sir":61*-f*mily resid*nce is an inereese sf $58"25 per
ycar in ilser fees. 3n ?*03-S4 thn t*tal f**s iner*ased w*s $76"**,
in 3fi*4-5 t*tal fecs iner**scd $57.S* snd in ;***-g tstal fe*s
decremsed $e"3$. While nny incre*se in taxes *r f*es is
sigrrif!*ant whcn *ur- r*si**nts arre *ire*dy highly taxed, it is
imp*rtant to remer"r"rb*r th*f, thiu f** increase has the l*nst impncl
nn city residents *f any *th*r t*x *r f** du* tn its epplicability t* a
hr**d*r number of us*rs"
Fourth, the fsct*rs tlrnt drive tax ln*re*ses in the elty, scho*l
district, and the cmunty *r* n*t "# ssfififfi;edpaffern pf irlcress*d
sp**#ingl end decre*sfnE rtrvst?{J#sr - es you essett in your letter.
The fnetsrs thnt ar* cnLlsit'?g th* budg*t shsrtfe lls s{:ross the stste
*r* incr**sed r*tir*nrent **ntribxtions, reduced sales tax r*v*nue
*nd reduc*d st*le aid. All cf tF:*s* fact*rs are bey*nd lccai e*ntr*|.
*nly stat* g*\r*r*ment can flx this" As bng e$ stat€ g*v*rr::"':r*nt
sc*ks tn trensf*r **sts t* t*eal Sov*rnment by cutting *id and
in:pcsing *nfund*d mnndmtes the only result wlll be higher t*xes
and fcwen x*rvic*s"

Fiflh, y#u s*em t* f**i thmt thE lnereas*d s*les t*x revcnue paid t*
the city is in som* w*y r":r-rf*ir" This is rr*t true. Aft*r years of heing
underp*id, *ity taxpayers are finally g*tting * fsFr share sf sales
tax rcv*nLies. Th* sh*r* thre city *ow r*esives is r**ghly equal t*
tt"le city'* Ehare of ***r:ty pcpulati*n.

5ixth, the *ity nnd r"r'ly *dministr*ti*n frr€ csmmitt*d to econ*mle

gr*wth and tn prnvi*ir"rg ti:e infrnstructulne for that grnwth"
I'J*c*ssary infrnstruetur* g**s b*y*nd water and sewer iin*s; it
ineludes polic* elnd fire pr*t*eti*rr. Cuts that would cl*se l**
r*v*nlje sh*rtfetl witi-rryut a wat*r rat* increase wnuld damcge tlre
effectiv*t"r*ss *f these departm*nts. }""{iEh crime and high fir*
insurancs rnt*s have a c*st t* resldenls that cannot be ign*r*d.

S*v*plth, th* **r.rnty {sr} easiiy corrert a *ignifica*t nrea *f unfnlr

tr*atment rcgarding its practic* *f p*ying *ut r*ed nrnintenance
fees. turr*ntly th* **unty pnys **t significont f**s to nll of th*
vnni*ils t*wns tm rnairltain "c*urrtyu' l**ds. These r*ads are n*t
renlly e*ilnty rond*" Th*y are tcwn r**ds, The eftect of this is th*t
county t*xs$ are appNied tc maintaS* r*nds th*t sh*utd be th*
resp*1":slbility *f the t*wn ln which they *r* l**st*d" Since county
r**ds are practic*lly r":**-*xistent in th* city, the net *ffect is th*t
city taxpayers subsidiue thes* tow* r*eds. This practice should
f6ace

t t1;tl,t,.
 It is my duty as Mayor t* da whnt is best for the resid*nt* sf the
clty as a whole. That means protecting the taxpayer's financial
interests even when those interests are not well understosd by the
public at larg*. i h*pe that this l*tter sheds light on aur pnsitie;r
and that you better understand the city's motivations in this
difficutt economic period.

I have faith that the City and County will overcCIme this time of
difficulty and, tcgether, wili pr-osper in the future.
i-i' ,r, SinEergly,

ttaw;&r}/*rt*--*
Ann M. Thene
Mayor

CC; *ouncil
i{*athe,r" Reynicke, City Contr*l ler
$*san Alib*zek, City Cterk
Medie

t, :l v.* i*$tflrdtlnr fit,*qls

r,.i ".lf;-llt.r l.ili i ir: iit-tt$f-!iri' I
 Chart of Tax Rates, Fees, Exemptions, Equalization Rates
City ofAmsterdam

Charl of Tax Rates and Fees % change from 00/01 to 2011112 lfrom O1l02 to 2004 i iO+,o ZO1O lfiane
ZUUJiZUg+iZUU'
-iaidi--'', --666i i 66i ::":+ I
i'ty i
t4t t1.E4i 12.4t
'.i653 "ii: ' 13.64 13.96i 13.69i 13.49 ,67IdAt
"i6.03n/.' $15s.004 iz27'Et l , 7.s3"/
"""32.5rr;:""""'-'i--"i:i0%'--':it.'s-6%
l0 i 13.021 13.8t
"2i: i6.3i
'ai4 {O.gil..- 1r,.0ti";i-i16.60 $255.0ii'
-ra 5i 'it{6i""'ai dad" i5do45 1i tsi)": - -"-- | -i5iiib7" --C:idal"

53.15i 54.32i 59.461 5l.l9t 5l.4lt 56.491 59.6 ^e4st/" 2O.5O%t

tYl3t_- 56.04
t-_-i
40.39% $910.45. i 9.46%, 2.34% 2.14%

rlGi;i 200.23i 200.53i 223.7A 2?0.ddi'-'-2i116:5<ti-'-'zllrt:rti 302.63 318.37 i 313.77 | 331.54 352.81
iinG; 173 a4 i 17239 i 171 35 ,i7 ati | rla' 1i r "'ai8na
-' -
261 52 260 9a: 251 a1i 266 52 267 1
ianlaton ror,ori - --eii
-;t876_f ror.oJi ---7nH 193.C4 t99.6/i 205.36i -80iias-
'Talats'""1iatt)i 2t1.33.- 2lt.! __ - -taat;f
r;l- el_
7zi-!i7i 847!

fser tue chandes 1 7 61 i 242( 76 ao r 5t titr ,aa\ it a,

jj
2111-i ' ' -Brit'- 'i8 ar- '--'r8 air' -' '-58
i5 r

Charts of ExemDtions
iTAR
,1.5i6 .:?r.p_ge__i._:!9.e!e 20.000 i 3 630/.
i-6- Ti?t 4t 060 i 36 aao 40070 i a65o/"

Senior Citizs - RPTL sedion 457

e!!
nder Y,"_':-YY
,0ei 9.000 45
,001 'l( 40
. l-u-ru.Yi. -
Under
"iihiiat $ii
"ii 5-0
45
"i
'-( 0bT
a;;
'7 0-o-d
,59 45
I
tat 1o
ti
00
3,200 35
3;70i 4,f i5
3,604 1;i
1,0b0
4,&o
\l
4,S
?1
15oi i0
a qoo i-
5,OOO 20
a 8bh

LOA'S. RAR'S and Eoualization Rates 10161

'Tentative or Preliminary)

PS, released I

c MD/Pbc66 and Pbceduregchadof Tax Rat6 Fees.xls

 CITY OF AMSTERDAM
HEATHER REYNICKE
CITY CONTROLLER

INTEROFFICE MEMORANDUM

ApnJ,26,201,1

Attention: Budget Revrew Committee

Re: Fund Balance

As the aucdon has now been completed and mostly finaLzed, the impact to the fund balance
has been determined. This rmpact is detrimental.

Losses on property taxes are recorded after the transfer of propetty is made (when
auction/saie is completed and corresponding Deed ftansfers are filed). After reconcjliation
recently completed; it has been determined that $856,663.00 is need to balance this
transacdon. As always done, the loss is recotded against the allowance for uncollectible
accounts, vzhich in this case does not have enough futditg. Therefore, there must be an
appropdation made in the dollar amount stated above. In the future, with more timeiy and
regular in-rem foreclosures, I do not anticipate this to occur agun. I would recommend that
the Common Council create stipulations before the next auction is performed (ie: minimum
bidmg).

This transacd.on, coupled with fund balance akeady used to balance this current year's
budget and anticipated overtime and retroactive payments made teduces the fund balance to
approximately $ 600,000.

As previously stated, the fund balance is needed to effecuvely operate city government.
Fund balance shouid not be used to balance an operating budget, as previously noted
numerous times. A plan to grow and increase fund balance needs to be put into place to
maintain our current bond rating. If this is not done, the City will be issuing debt at much
higher rates ffran it cwrendy Procutes.

Please contact me with any questions you may have. Thank you.

Heaiher Reynicke

61 CHURCI{ STREET . AMSTERDAM/NEW YORK' i2O1O

PHONE,: (s18) 841 -4332' FAX: (518) 841-4338