WESTERLO — Municipalities in Albany County depend on sales-tax revenues to fund their budgets, keeping local property taxes in check. With the coronavirus shutdown of the economy, Westerlo’s supervisor, William Bichteman, is preparing for the worst.

At Westerlo’s town board meeting on Tuesday, Bichteman confronted the town with the possibility that sales-tax revenue will be down nearly 70 percent for the remaining quarters of this year and down 35 percent in all quarters next year, and what the town’s finances will look like in that worst-case scenario.

Stressing every step of the way that all the numbers he was putting forth are “basically darts at this point” due to a lack of information from the county, state, and federal governments, Bichteman said that, for the town to respond to that doomsday-level of reductions, it may need to lay off 10 town employees, cut back on various expenses, and raise taxes anywhere from 10- to 15-percent. 

In September, Bichteman told The Enterprise that Westerlo has 12 full-time employees — eight at the highway department and four at the town hall. 

“I caution you all,” Bichteman said at Tuesday’s meeting. “These are numbers that I slammed together to get a flavor for what the situation could be.” 

He told The Enterprise later, “Tomorrow, this could all be different, but I can’t look into that crystal ball.”

Using a spreadsheet, Bichteman offered a simple projection of sales-tax revenue for the remainder of the year, which he drew from conference-call conversations with County Executive Daniel McCoy and other municipal leaders.

In 2019, with a roughly $3 million budget, Westerlo was expected to receive about $1.25 million in sales tax from the county, with the amount spread out fairly evenly across the four quarters. Eighty-five percent of sales-tax revenue coming to Westerlo from the county is used in its annual budget and the remainder goes to the general reserve, Bichteman said. 

For 2020, Bichteman envisioned a 50-percent reduction in sales tax in the second and third quarters, and a 75-percent reduction in the fourth. The first quarter was over before the state shut down all non-essential businesses in mid-March in response to the coronavirus pandemic.

That would leave the town with $861,619.29 — a decrease of nearly $400,000. 

Bichteman also said that, following a conversation with someone from CHIPs [Consolidated Highway Improvement Program], which generally gives Westerlo $170,000 each year, neither he nor Highway Superintendent Jody Jansen are optimistic about receiving more money. 

“There’s no guarantee that we’re going to get any CHIPs money at all,” Bichteman said, adding that he and Jansen “will not entertain the idea of spending money we’re not going to get back.”

And Bichteman doesn’t want to plan for rapid improvement in 2021, either, saying that it’s “totally within the realm of possibility that sales tax is down 35-percent across the board next year,” which would leave $691,000, fifteen-percent of which will be unaccounted for outside of the general reserves as a cushion. 

Bichteman showed where the town could theoretically save money, but said that some of the decisions would be difficult to make. 

Three part-time positions within the town hall could be cut, Bichteman said, and one full-time position could be reduced to part-time. In salary and benefits, it would save the town about $36,000. 

Four highway workers could also be cut, saving the town  $57,000 in the summer and $70,000 in the winter. 

The Westerlo Public Library, which employs three workers in addition to its director, could be stripped down to just the director, netting the town nearly $10,000.

“No one is happy about this,” Bichteman said. “I’m particularly upset about the entire deal — that we have to do this to these people who work for the town.” 

With a lack of highway workers and projects, the spending on aggregates, which is the stone material that gets used in paving, would be down $40,000, Bichteman estimated. 

The town can also put a halt on some anticipated improvements to buildings, leaving only critical repairs like the crumbling steps of the town hall, which are a potential liability, Bichteman said, and would save $36,000,

In total, across the highway and general funds, Bichteman anticipates the town being able to save about $308,000. 

With those savings, the town’s 2021 appropriations would be around $2,312,000, Bichteman said, and with a spendable reserve balance of approximately $725,000, the tax levy would need to bridge a $336,000 gap — a 15.28-percent increase from the $976,000 raised through taxes last year. 

That percentage-increase is contingent upon Bichteman leaving $500,000 in the reserves for other emergencies and extra cushioning if the economy doesn’t improve anytime soon, which is an amount where Bichteman has some wiggle room. “I could theoretically reduce the [reserve] funds to zero,” Bichteman told The Enterprise, “but that’s bad accounting so we wouldn’t do that.”

Bichteman told The Enterprise that he doesn’t want to frighten residents, but that the financial aspect of the coronavirus is one that can’t be ignored, and that aid can’t be counted upon.

“The county government is under the impression that, unless the federal government sprinkles money down from heaven,” Bichteman said in the May 19 meeting, “we’re not going to get any money. We’re going to just get the sales tax we get. The state itself isn’t in any position to provide any additional assistance to individual towns and communities along the way.” 

Response

Councilman Matthew Kryzak, who was elected last year and has experience as a business manager for his family’s construction company, urged more caution.

“In my experience,” he said, “I’ve never made a good decision off of speculative data. That’s never turned out good enough. So it’s hard for me to make a drastic choice just on speculative data.

“I would say we should make some cuts where we can,” Kryzak continued. “Try to keep the personnel … and wait for the day the second quarter hits. If that second-quarter data is as bad as [the projection] says, then we revisit.” 

Bichteman, though, hopes that, if the town has to cut employees, it should do so early enough that those workers can file for unemployment and get the extra $600 per week that the federal government is paying the unemployed before that program expires at the end of July, or at least get them started on the claims process even if that window closes. 

“I think it’s important that we notify our employees so they have as much time in advance to do what they have to do,” Bichteman said, adding that he’d like to give 30 days of notice. 

Lisa DeGroff, chairwoman of the Westerlo GOP, said that she agrees cuts will be necessary but that Bichteman should look harder at other areas. 

“I am unequivocally, absolutely opposed to any kind of staff reduction as far as our highway department goes,” DeGroff said. “Period. I know you’re looking at that being a ton of money, but we have seen natural disasters come up all over the place where our town highway department has had to step in. Just a simple thunderstorm can wreak havoc in the town.”

DeGroff suggested that cuts be made to the town fire department, but Bichteman told The Enterprise that he doesn’t want to cut funds to an emergency service. 

“They’re on a pretty tight budget as it is,” Bichteman said. “I didn’t cut anything and am hoping they can maintain, on what they have.” 

The town is holding a special meeting through Zoom next Thursday, May 28, to continue the discussion.