City eyes fiscal stress report
Officials look to improve finances
During Thursday night’s City Council meeting in the senior center, the city’s deputy director of finance gave a brief presentation on the city’s recent fiscal stress report from state officials.
The city of Watervliet faces the second-highest amount of “fiscal stress” of all municipalities in New York state, according to a new report from the state Comptroller’s Office.
Only Monroe County in western New York found itself under more financial pressure than the Albany County city among more than 1,000 counties, towns, cities and villages in 2016, state Comptroller Thomas DiNapoli said in the report, with the city of Albany right behind Watervliet. Those three governments, along with Broome County in the Southern Tier, were the only ones to be classified in the report as being under “significant” fiscal stress.
Albany and Watervliet, as well as the town of Colonie, which was deemed “susceptible to fiscal stress,” were the only Capital Region governments among the 27 to make DiNapoli’s list.
However, the report says, this
comes from a region with the second-highest amount of fiscal stress in upstate New York, trailing only western New York.
While scores trended lower across the state, Watervliet saw its score increase from 2015 to 2016, with its designation upped from moderate to significant stress. In DiNapoli’s scoring, the city’s worst grades came from a $130,000 fund balance that equals only 1.1 percent of its $12 million 2016 budget, well below the 10 percent recommended by the state. The city also earned low marks for running an overall operating deficit of nearly $760,000 for the year, up from about $270,000 in 2015.
“We thought it would be beneficial to go over what the score is, how it’s calculated and what its intended purpose is,” said Amanda Austin, the city’s deputy director of finance.
The purpose of the annual surveys, which track not only municipal governments, but also school districts, is to track trends in stressing conditions and give officials a better sense of where their entities are headed so they can respond before facing a financial crisis. The Comptroller’s Office examines what it calls financial and environmental indicators to evaluate both a government’s solvency and its capacity to raise revenue and meet the service needs of residents.
“We appropriated our fund balance to relieve the burden on the taxpayers, we planned a deficit in our budget, we planned to appropriate a certain amount of money, so we we’re using it,” explained Austin. “One of the reasons we did that aside from relieving the burden on taxpayers is because of the property tax cap credit… while that cap still exists, the credit no longer does, there was also a one time prior period accounting adjustment and we also made some fund balance transfers from the general fund to other funds — such as the water and sewer — and one of the reasons for that is that there was a payment by the [ Watervliet] Arsenal and they made it very late and we weren’t allowed to count that income.”
Austin then went over some ways the city is planning to get back on track when it comes to its finances.
“We are implementing a fund balance policy. We want to build the fund balance, meaning we can also build cash in doing so,” explained Austin. “We have to be careful, though, because as a municipality we are not allowed to plan a budget surplus, but we can budget for contingencies. We are also in the middle of implementing an encumbrance system, that’s going to help us make sure that are expenses are current and so everyone can see what page we’re on. We’re also building our reserves, which will help us build our fund balance.”
Austin also emphasized for residents to call their state elected officials — like Assemblyman John McDonald III, D- Cohoes, and state Sen. Neil Breslin, D-Albany — to push for more funding from the state.
After Austin’s brief presentation, city officials then began the scheduled city council meeting and Mayor Michael Manning and Councilman Charles Patricelli voted in favor of a resolution that requests a Comprehensive Review by the New York State Financial Restructuring Board for Local Governments to provide an informal audit by the state related to the fiscal stress report.
During the council meeting, Patricelli requested to schedule a special meeting related to the fiscal stress report where they could go over things in the report and the city’s budget line by line, but no such meeting has been officially scheduled yet.
City General Manager Jeremy Smith went on to explain the budget workshop process and how the workshops help with organizing the annual budget.
“We use the budget workshops as a tool to provide information to the GM from the council to prepare a budget that fits their expectations,” explained Smith. “The budget workshops are the opportunity for the mayor and council to ask the questions about spending and to request specific lines be changed. It is my hope that the council would use this time and information to provide me with the direction that they would like to see the budget go for the future. I have personally worked diligently on reversing the trend of fiscal stress for the city. I have done this by working with our department heads and the Comptroller’s Office. We have a plan as we move forward to reverse this trend and to take the necessary steps to make sure it does not happen again.”