The 2005 City of Rye, New York Finance Committee

2005 Finance Committee Meeting Agendas and Minutes

January 10, 2005         Agenda    Minutes

February 7, 2005         Agenda    Minutes

March 7, 2005             Agenda    Minutes

May 2, 2005                Agenda    Minutes

June 6, 2005                Agenda    Minutes

July 18, 2005               Agenda    Minutes

October 3, 2005          Agenda    Minutes

November 7, 2005      Agenda    Minutes

December 5, 2005       Agenda    Minutes

2005 Projects & Accomplishments

As in prior years, the Finance Committee was very active in 2005, reviewing several key issues and developing recommendations to the City Council. A summary of our 2005 activities is as follows. For a more in-depth discussion of the issues, discussions, and conclusions, we encourage you to read the Committee’s minutes and the various documents posted on the Finance Committee website.

The Committee continued to track the City of Rye Occupancy Tax legislation, noting that as of December 31 it had passed one house of the State Legislature.

The Committee reviewed the concept of a City of Rye Real Estate Transfer Tax, and in June 2005 issued a memorandum indicating that it could not support the concept. As year end 2005 approached, the Committee was asked by the City Council to reconsider the proposed tax with some modifications. At year end 2005 the Committee was awaiting a proposed draft of such legislation from the Corporation Counsel for further review.

The Committee discussed the appropriate use of fund balance, and concluded that the City’s financial policies concerned with this issue are sufficient to require the City Council to carefully review the use of fund balance in making judicious budgeting and funding decisions. The Committee noted that such decisions should be made in the context of other financial policies such as the minimum level of fund balance that should be maintained.

The Committee discussed and concluded that the City’s policy to maintain a minimum level of fund balance equal to 5% of expenditures is appropriate, and that the City should strive to maintain a higher balance whenever possible.

The Committee discussed the concept of establishing a minimum tax rate increase that is equal to or less than the increase in the Consumer Price Index. The Committee concluded that the City should not follow such a policy.

The Committee reviewed the auditors’ findings in the fiscal 2004 audit and the City Comptroller’s responses to those findings. The responsibility for a more in-depth review and analysis of the annual audit rests with the City’s Audit Committee.

The Committee began work on developing a Popular Budget Report that would be a highly-summarized presentation of the City’s annual budget document presented in a format that would be easily read and understood by the average reader. The document would be similar in scope and format to the Popular Annual Financial Report, which was well-received by the public as a user-friendly version of the City’s comprehensive annual financial report. At year end the Committee was developing the first drafts of the concept.

The Committee discussed the Finance Department’s “Citizens’ Tax Bill” project, an effort by the Finance Department to make the City’s property tax bill easier to read, understand, and more informative. The first publication of the revised format will be released in February 2006 with the City’s 2006 property tax bill.

Respectfully submitted,

Jono Peters
Chair

Specifics on the Real Estate Transfer Tax Project and Occupancy Tax Project

City Real Estate Transfer Tax
N.B.: Special legislation amending New York State Tax Law Article 31 is required to authorize the City of Rye, New York to implement a real estate transfer tax. Among other provisions, such laws typically require that the revenues derived from such a tax be used for one or more specific purposes, and typically have a "sunset clause" wherein the law is repealed unless extended by legislation.

NYS Tax Law Articles 31-A through 31-E are special legislation provided to certain counties and towns authorizing a real estate transfer tax. NYS Town Law Sections 64-e and 64-f are referenced in NYS Tax Law Articles 31-D and 31-B respectively. The City's Finance Department has provided a summary of the authorized uses of the real estate transfer tax revenues found in existing legislation.

The City's Corporation Counsel, in a memo dated February 17, 2005 provides guidance  regarding the possible enactment and implementation of a City real estate transfer tax. The New York State Office of State Comptroller has a publication entitled "Reserves", which may be of assistance in determining the dedicated use of real estate transfer tax revenues.

At the request of the Finance Committee, the City Comptroller has prepared a memorandum dated April 22, 2005 containing suggested language for the deposit and disposition of real estate transfer tax revenues.

Following extended review and discussion, the Finance Committee agreed that it would not support a City of Rye real estate transfer tax, forwarding their findings and conclusions in a memorandum to the City Manager dated June 7, 2005.

Subsequent to the Finance Committee's decision to recommend against the implementation of a real estate transfer tax in June 2005, the Committee was asked to consider a revised proposal of a real estate transfer tax as described in a memorandum from Councilman Seitz dated November 17, 2005. That memo, along with the Committee's original decision of June 7, 2005 and an analysis of 2004 residential sales applying three top rates as prepared by the City Comptroller is being presented to the Committee for discussion at their December 5, 2005 meeting. It should be noted that the analysis does not include any exemption for home sales where the seller subsequently purchased another home in the City of Rye, and there may be functional difficulties implementing such an exemption at the time of sale (in other words, confirming at the time of sale that a home would be subsequently purchased in Rye, thus exempting the seller from the proposed tax).

City Occupancy (Hotel) Tax - Project
N.B.: The County of Westchester has an occupancy tax of 3%. The other four cities in Westchester County that have their own sales tax (Mount Vernon, New Rochelle, White Plains, and Yonkers) do not have an occupancy tax.

The City is currently awaiting passage of the proposed City of Rye Occupancy Tax legislation by the State Legislature, and signature into law by the Governor.

NYS Assembly Bill A8015B (Senate Bill S5387-A) - City of Rye Occupancy Tax (2005) 
City Council Resolution re Occupancy Tax, May 19, 2004
Finance Committee Memo Recommending an Occupancy Tax, April 22, 2004
Memo re Occupancy Tax - Other NYS Cities, March 10, 2004
Corporation Counsel Memo on Occupancy Tax, February 27, 2004
Wave of Hotels Planned in Westchester, The Journal News, August 8, 2001
 

This page last updated January 09, 2006 02:23 PM