The Mamakating Town Board met Sept. 29 to reshape its tentative annual budget and keep property taxes under the state-mandated 2% cap, but rising health insurance premiums and retirement system costs are limiting the town’s options.

Supervisor Peter Goodman led an intensive financial workshop, as the board reviewed the proposed budget. Mamakating’s General Fund totals slightly more than $3.5 million. Non-tax revenues cover about $2 million of that amount, leaving taxpayers to cover the remaining $1.5 million.

The largest area of pressure is the Highway Fund, which accounts for nearly $2 million in spending. Rising costs for diesel fuel, gasoline, vehicle parts and asphalt have contributed to a 4.5% increase in overall infrastructure spending. Overtime has been capped at $150,000.

The town is also facing a 12% increase in employee health insurance premiums, adding $91,000 to the budget, along with a $10,000 increase in required state retirement contributions.

At the same time, some revenues are falling short of projections. The Town Court was expected to generate $750,000 in fines and bail, but collections are below that amount. Board members speculated that the decline could be related to fewer cases being processed rather than changes in enforcement, noting that one town justice had logged significantly fewer bench hours.

Building permit revenue is also underperforming, with the town projecting between $175,000 and $200,000 compared with an initial estimate of $250,000.

To help close the gaps, the town is relying in part on cash management and investment income. Capital reserves were moved into the New York CLASS — the New York Cooperative Liquid Assets Securities System — which allows municipalities to pool funds and earn interest while maintaining access to their money.

The investment is expected to generate about $240,000 at a 3.8% interest rate, with $198,000 already earned. The town's shared county snow-plowing contract is increasing from $225,000 to $232,000, while state aid for road paving has increased to $600,000.

Other revenue increases include the police station cell tower lease, which is expected to bring in $95,000, and adult-use cannabis tax revenue, which is currently tracking slightly ahead of its $2,500 projection.

The board is also examining individual town expenses. Officials are considering changes to the town's agreement with the Wurtsboro Art Alliance at 73 Sullivan St. The organization currently pays $600 a year while the town covers electricity, heating oil and maintenance.

Board members suggested a triple-net lease as a way to make the building financially self-sustaining. Under a triple-net lease, the tenant typically pays base rent as well as property taxes, building insurance and maintenance costs. Goodman said the board would continue discussing the proposal.

A request from the assessor to hire a part-time property data collector at $29,000 per year also prompted discussion. Town records are still based on 1998 property values, and board members warned that a property-by-property search for unpermitted decks or additions could trigger a town-wide reassessment, potentially resulting in unpredictable tax increases for homeowners.

The town is considering sharing the position with a neighboring municipality instead.

Funding for major trail projects is not expected to be affected by the budget constraints. Any unexpected costs associated with the O&W Trail and D&H Canal projects would be covered through specific grants rather than the town's tax base.

The town also managed to extend its summer youth camp from six to seven weeks, with the additional operating costs fully covered by increased registration revenue.

Long-term environmental monitoring is also being reviewed. After 25 years of stable testing at the closed landfill, Mamakating is asking the state to reduce the frequency of water and gas testing to help offset an increase in costs from the town's testing laboratory.

Meanwhile, plans for a new $500,000 municipal dog kennel remain on hold. Strict state regulations and required environmental setbacks from local streams have increased the projected cost, meaning the project cannot move forward without outside grant funding.

“Pounds that we work with are often full, and it’s getting hard to place dogs we are expected to pick up,” Goodman said.

For now, elected officials are taking cost-of-living increases of between 1% and 2%. The budget remains a work in progress as the board prepares for collective bargaining on the upcoming highway union contract.

Once labor costs and outstanding fire department bills are finalized, the town will hold formal public hearings to gather additional community input before adopting the final budget.

Goodman closed the meeting by saying the Town Board is working to hold the line on spending and “really look out after the taxpayers.”