Watervliet under ‘ significant’ fiscal stress
Annual report from state comptroller cites low fund balance, past deficits
ALBANY, N. Y. » The city of Watervliet faces the secondhighest 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 scored as “susceptible to fiscal stress), were the only
Capital Region governments among the 27 to make DiNapoli’s list. This comes, however, from a region with, the report says, the second- highest amount of fiscal stress in upstate New York, trailing only western New York.
As a whole, DiNapoli observed, municipal governments saw less financial pressure in 2016, as measured by declining scores. A total of 38municipal governments were deemed to be under any level of financial pressure in this year’s report, down from 40 last year.
“Although the number of local governments designated as fiscally stressed has declined noticeably, there are still too many communities struggling with chronic budget strain,” DiNapoli said in a news release accompanying the report. “Looking to the future, local officials should exercise fiscal caution through sensible spending decisions, realistic revenue projections and proper long- term planning.”
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 fac--
ing 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.
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.
In a statement issued Thursday, Watervliet Mayor Michael Manning said the city has been “working diligently to improve its finances,” even in voiting DiNapoli’s office in to performan audit, which he expects will be completed soon. He defended dipping into the city’s fund balance to keep taxes down and said officials have seen their attempts at proactive measures and conservative budgeting hampered by factors beyond the city’s control.
“Watervliet is one of the highest tax- exempted communities in New York state with more than 55 percent of the assessed property in Watervliet exempted from paying taxes,” he said. “This means that only 45 percent of the property in the community pays for 100 percent of the services and costs.”
Manning also said the state is partially to blame as well, pointing out the city receives only about half the per- capita state aid of neighboring Troy, Cohoes and Albany, a difference that equals about 8 percent of the city’s total budget.
“This inequitable distribution of state aid costs Watervliet taxpayers more than $ 1 million per year in revenue and contributes greatly to the fiscal stress,” he said.
The news was better in Troy, where officials hailed a significant drop in its score, from 40 percent in 2015 to 23.8 percent in the current report. While the city was not deemed to be under fiscal stress in either report, DiNapoli’s scoring noted specific improvements in its own fund balance, as well as finishing a second consecutive fiscal year with a surplus.
Troy Mayor Patrick Madden credited the improvement to the “common sense budgeting” he has preached since he began campaigning for the job in 2015.
“Through fact- based budgeting, fiscal transparency and responsible financial reporting, we are continuing to change the way we do business in the Collar City,” the Democrat said in a statement. “Though we are not out of the woods, I amconfident we are on the right path [ and] heading in the right direction.”
City Council President Carmella Mantello, meanwhile, lauded efforts put in place by the council under her leadership.
““The City Council put in cost controls, new revenues ( parking ticket amnesty), transparent financial reports and independent audits that helped improve the city’s financial position,” she argued inher own statement. “However, moving forward, the city must continue to enhance its financial situation without exceeding the property tax cap and maintain adequate cost controls and continue transparency in fiscal operations.”
The Republican also renewed her criticism of the 14.5 percent property tax increase included in the 2017 city budget, which she voted against after urging Madden to cut his initial 28.2 percent proposed tax hike to single digits. Despite her opposition and the fact that the GOP holds a 6- 3majority on the council, the final budget was approved by a 5- 4 vote, with Republicans Mark McGrath and John Donohue crossing the aisle to vote for the compromise.
“It is imperative to remember that [ in] improving our fiscal position, we must do so without putting an undue burden on Troy taxpayers,” Mantello said in her statement.