Extra money might be used to pay off debt, buy vehicles
City lawmakers are considering using some of the city’s fund balance to pay off existing debt to the New York state retirement system and to purchase several vehicles for the police, fire, parking and building safety departments.
During a special meeting of the Common Council’s Finance and Audit Committee on Monday, members endorsed a resolution authorizing that $777,787 of the city’s fund balance be used to pay off a portion of Kingston’s remaining amortizations with the state retirement system.
The committee adopted a separate resolution to use $271,500 from the fund balance to purchase three police vehicles, a response vehicle for the deputy fire chief, two all-wheel-drive hybrid vehicles for the Building Department, and one all-wheel-drive hybrid vehicle for the parking division.
The resolutions still had to be voted on by the full council at its Tuesday night meeting.
The request to use part of the city’s fund balance came from Mayor Steve Noble, who did not attend the committee meeting.
In a letter to Council President James Noble, his uncle, the mayor said the city’s unassigned audited fund balance in the general fund increased to $6,976,287 as of Dec. 31, 2017. The mayor said that brought the city’s unassigned fund balance in the general fund to 15.86 percent of the spending in the proposed 2019 city general fund budget. Noble said the city’s policy is to maintain a fund balance of between 10 and 13 percent of the total adopted expenditures in the general fund budget.
The mayor said that policy allows the city to spend “excess” fund balance money on any legitimate purpose approved by the council, such as onetime expenses that do not result in recurring operating costs.
“We developed the policy for a reason,” city Comptroller John Tuey told the Finance and Audit Committee.
Tuey said using money from the fund balance would allow Kingston to pay off part of its existing debt to the state and purchase vehicles it otherwise would have to borrow money for. He said it would be a good business practice for the city to pay off some of its debt and that buying the vehicles outright would save interest that city taxpayers otherwise would have to pay.
Tuey said once the city makes the payment on the existing amortizations, it will owe less than $750,000 to the state retirement system.
Municipalities have the option to pay a portion of their annual contribution to the state retirement system over time, leading to more predictable pension costs.
Tuey said the city would be paying its retirement debt for the 2012 and 2014 fiscal years.
All the vehicles proposed for purchase were requested by the different departments during the city’s recent budget development process, Tuey said. He said in creating the proposed 2019 budget, the mayor removed the vehicles from the spending proposal specifically so they instead could be paid for out of the fund balance.
Of the funding, $114,000 would go toward the police vehicles, $45,000 for the deputy fire chief’s vehicle, $75,000 for the Building Department vehicles, and $37,500 for the parking vehicles.
The new vehicles would replace older, high-mileage vehicles, the department heads told the committee.