Purpose of Budget Review

The purpose of our budget review was to provide an independent evaluation of the City’s proposed budget for 2016.

Background

Chapter 332 of the Laws of 2014, as amended by Chapter 147 of the Laws of 2015 (the “Act”), authorized the City to issue debt to liquidate the accumulated deficits in the City’s general, water and sewer funds as of December 31, 2013. The Act requires the Mayor to submit to the State Comptroller each year, beginning January 1, 2015, and for each subsequent fiscal year during which the debt incurred to finance the deficit is outstanding, the proposed budget for next succeeding fiscal year.

Key Findings

• Based on the results of our limited review, we found the significant revenue and expenditure projections in the preliminary budget are reasonable.
• The proposed budget includes contingency appropriations totaling only $305.828, or 1 percent of total anticipated general and water fund expenditures.
• The proposed budget does not include a tax overlay, which could create a shortfall in 2016.
• The overtime appropriation in the proposed budget is less than the amount expended for the first nine months of the current year.
• The estimated water rent revenue could be overstated by approximately $400,000.
• The Common Council will have to adopt a local law to override the tax levy limit.

Key Recommendations

• Consider a significant increase in the City’s provision for contingencies.
• Include a tax overlay in the adopted budget.
• Ensure the appropriation for overtime is reasonable.
• Approve the 10 percent increase in water rents before acting on this budget and address the overestimation of water rents when adopting the final budget.