Saratoga Springs revises Financial Plan
SARATOGA SPRINGS, N.Y. » The City of Saratoga Springs is revising its 2020 Financial Plan amid the ongoing COVID-19 pandemic.
The city’s finance department now projects a $15 to 17 million revenue shortfall due to the economic impact of the pandemic, greater than the earlier projected $14 to 16 million revenue shortfall, Commissioner of Finance Michele Madigan shared at the City Council meeting on Tuesday evening.
During this most recent meeting, Madigan presented the council with an option to issue a Tax Anticipation Note (TAN) for $6.3 million, and the council unanimously voted to approve this resolution.
Madigan previously outlined her plan to address revenue shortfalls due to the COVID-19 virus at several council meetings and a recent press conference. This included a $4.7 million general expense reduction, $2.4 million via the issuing of a budget note and using the city’s fund balance in the amount of $4.5 million.
She also previously presented a plan for a furlough program and other wage reductions that would reduce wage related expenses by approx
imately $3 million. However, the plan presented by the unions and council produced only $277,000 in wage related savings, falling short of the goal.
The council and unions chose to make the furlough program voluntary, which was counter to the plan presented by Madigan and made an almost negligible contribution to addressing the city’s serious financial challenges, a press release from Madigan’s office said.
“This is why I cast the sole dissenting vote against implementing the furlough program as presented to the Council on May 15, 2020. Current circumstances required difficult decisions to be made regarding involuntary furloughs as an alternative to layoffs, which the Council has chosen not to make at this time – which is quickly running out,” Madigan said in the release
“Although obtaining a Tax Anticipation Note (TAN) should help postpone the date at which we deplete our cash (pushing it from June to December) it also presents new challenges and costs to our taxpayers, as the principal must be repaid within 12 months and the interest rate will likely be high given current economic conditions,” she continued.
In another change, Madigan now plans to access $6.5 million in fund balance, $2 million more than originally planned, to help the city meet its financial obligations through November.
“Projections are changing regularly and with little notice. For example, if the city does not receive State Aid or VLT revenue in amounts revised by NYS, the month and date for running out of cash will arrive much sooner,” she said in the release.
In the future, Madigan will discuss the financial impact the COVID-19 virus will have on the 2021 Comprehensive Budget, a process that begins in July, when she issues the Budget Call Letter to each department, the release said, noting that the Comprehensive Budget is due for presentation by the Commissioner of Finance at the Oct. 6, 2020 City Council meeting.
“Section 4.4.8 of the City’s Charter requires the Commissioner of Finance to submit a remedial action plan to the Council if at any time during a fiscal year it appears that revenue will be insufficient to meet budgeted expenses,” Madigan concluded in the release.
“It is the Council’s responsibility to take action based on the information provided by the Finance Commissioner. Each Council member has a fiduciary duty to the City, and are all accountable – collectively and individually – for protecting the interests of the City and its stakeholders.”
Additionally, Madigan presented a COVID-19 Federal Funding Relief Stimulus Package for Local Governments resolution at Tuesday’s meeting, requesting federal stimulus funds on behalf of the city. This matter was voted on and unanimously approved by the council as well.
Saratoga Springs Mayor Meg Kelly thanked Madigan for presenting the resolution, which calls upon federal representatives to advocate vigorously for the federal stimulus legislation that will address the needs of the city.
“It’s a great thing. I think the more they can hear from, us the better off we’ll be,” Kelly said.
All Saratoga Springs City Council meetings can be viewed online at www. saratoga-springs.org.