Niskayuna plans how to use $5M surplus
Niskayuna has a $5 million surplus.
What is the town going to do with it? Officials want to create a policy to set aside a certain amount of that extra money — the unappropriated fund balance — each year, dictate what to do with it and ensure how to keep it replenished. Extra money was used last year to buy trucks and improve the dog park. It could be used in the future to save for hard times, keep taxes low, and pay for high cost projects without borrowing.
“Having a large fund balance is great, but it can allow you to become addicted to it, and like opioids, it’s not a great end,” said Town Comptroller Paul Sebesta at a finance committee meeting Wednesday morning.
He explained that extra money has never been moved into a capital reserve fund as is being proposed now.
“This is entirely new,” Sebesta said. “Fund balance has always been retained and stayed there.”
The Town Board started talking about creating a fund balance policy when debating the budget back in October. The final approved spending plan used more fund balance for capital projects in order to not raise taxes. The board brought up the policy again when borrowing money earlier this year to buy equipment and improve River Road Park.
At Wednesday’s meeting, town officials huddled around a conference table to hash out details of the plan — and agreed they’re not ready to vote next week without more historical context and future direction.
This year, Supervisor Yasmine Syed said the town has approximately $5 million unappropriated fund balance between the highway and the general fund.
“We have built up a sizeable amount in the fund balance. It’s a healthy balance. That’s a good thing,” Syed said. “We just want to make sure we’re being as prudent as possible with the taxpayer dollars.”
The first-term Republican with a background as a budget analyst proposed a fund balance policy based on recommendations from the Office of the State Comptroller that would set aside 25 percent of that extra money every year — which would be about $1.25 million next year. The policy would allocate how it would be used, including buying equipment, paying legal fees or reducing debt or property taxes.
Town Board members had lots of questions Wednesday morning. Denise Murphy Mcgraw questioned how it would impact Niskayuna’s high credit rating. Lisa Weber wondered whether money set aside could be earmarked for projects like construction on the town’s senior center and pool. John Della Ratta and Bill Mcpartlon wanted to know a historical trend line — how much the town has carried over annually — for the past 10 years.
“That will give us perspective for the future. What we’ve done in the past has worked. It has gotten us a good credit rating and worked up a good fund balance,” Della Ratta said.
Sebesta said he wasn’t comfortable with the proposal to set aside 25 percent. He would like to see more details in the policy governing how to use the fund balance — like capping the balance increase from year to year and restricting how much could be spent out of it.
Syed said in a presentation at the last Town Board meeting that no policy would be passed without a plan for replenishing the fund balance.
Sebesta will provide the Town Board with data on the fund balance from the past 10 years and a projection for the next five years before the town moves forward. There’s no rush, he said, before budget season arrives.
Mcpartlon offered Sebesta a smile at the end of Wednesday’s meeting and concluded: “What’s important is to do it right.”