WPCNR QUILL & EYESHADE. By John F. Bailey. April 13, 2005: In the legal notice published today by the City of White Plains detailing the new proposed 2005-2006 budget,  the budget balance sheet, second column on page 9F of The Journal News Classifieds indicates no figure has been set aside for Tax Refunds.

NO TAX REFUNDS IN 2005-2006! The City Budget capsulated in the Legal Notices, The Journal News, Wednesday. The Key line is "ADD ALLOWANCE FOR: TAX REFUNDS  (no figure)." Photo by WPCNR News.

City Hall has not responded to WPCNR’s inquiry as to why there is no forecast of certiorari settlements, and how they will be paid, even though the City School District expects to pay back $5 to $8 Million in certioraris in the 2005-2006 year. This grim certiorari prospectus was reaffirmed at the Council of Neighborhood Associations Tuesday evening by Superintendent of Schools Timothy Connors.

The city has paid back  $2,775,521 to Westchester One, $613,469 in Tax Certioraris to Nordstroms, and $405,994.80 to Gateway One, a total of  $3,794,484 in the first three months of 2005. The City School District has reported that they have been told by the City of White Plains to expect to pay back as much as $5-$8 Million more in certiorari to city businesses in their planning of the new City School Budget. The School District has said they plan to bond for these anticipated certioraris.

The absence of an allowance for tax refunds for these certioraris the city expects has not been explained by The Budget Department or The Mayor’s Office as of this hour. There is also no mention of the total dollar amount of anticipated tax certioraris in the published 2005-2006 Proposed City Budget.

Calls to City Hall and a followup e-mail message for an explanation of why the city told the City School District to expect $5 to $8 Million certiorari “hit” and was not anticipating a hit on their own budget or how they expected to pay that hit have not been answered as of this hour.

Given that the city tax rate is $122.25 per $1,000 of assessed valuation, and the City School District Tax Rate per $1,000 of assessed valuation is $412.51, for every dollar the city collects, the School District collects 4. Therefore, WPCNR believes that if the School District is expecting from 5 to $8 Million in tax refunds the city may be anticipating a minimum of $2 Million to $3 Million in certioraris. If paid for out of fund balance (sitting on $12 Million – if the $42.5 Million Sales Tax Projection for 2004-2005 comes true), the fund balance will sit at about $9-1/2 Million after paying the certioraris out of it during 2005-2006.  

Former Mayor Alfred Del Vecchio, speaking to WPCNR, said his administration routinely budgeted a reserve for tax refunds. Rita Malmud, councilperson, confirmed late Wednesday afternoon that certioraris were paid for as they were settled by the city. Last Monday, the Council approved a $35,000 certiorari payment to CVS Pharmacy at 601 North Broadway.

Asked if the Common Council had any input on formulating the budget they received Monday, Ms. Malmud said, “No, that begins now.” Budget meetings were supposed to begin Tuesday, but the Tuesday evening meeting was cancelled, according to the Budget Department because of scheduling conflicts. A spokesperson at the budget department said a new date has not been set. There is a budget meeting Tuesday, April 19.

The Budget Advisory Committee which aided the Mayor’s Office in formulating the 2005-2006 proposed budget, includes two Common Council members, the finance and budget department heads, so in a way the council does buy in to the forming of the proposed budget, through those two council representatives, each of whom have MBA’s in finance.

Ms. Malmud said she did not know how the city was going to pay any certioraris but she said “they would not bond for them.” She also did not know the projected liability the city faced in certiorari settlement claims pending. The School District has placed the certiorari claims at approximately $100 Million, but to be fair, certs are normally settled for less than they litigate for.

Malmud defended the use of $8.7 Million in fund balance to pay for operating expenses in 2005-2006, saying it has been a longstanding practice of the city to do this for many years.

Given the massive certioraris agreed to by the city and given back to Westchester One, Nordstrom’s and Gateway One, similar businesses may be expected to mount a new round of certiorari assaults on the tax role.