Purpose of Audit

The purpose of our budget review was to determine whether the significant revenue and expenditure projections in the City's proposed budget for the 2017 fiscal year are reasonable.

Background

The City of Troy, located in Rensselaer County, issued debt totaling $21,630,000 to liquidate cumulative deficits in the City's general fund for the years ending December 31, 1993, 1994 and 1995. Local Finance Law requires all local governments that have been authorized to issue obligations to fund operating deficits to submit their tentative budgets for the next fiscal year to the State Comptroller for review while the deficit obligations are outstanding.

Key Findings

• Significant revenue and expenditure projections are reasonable.
• The City's proposed budget provides only minimal funding for capital expenditures; $1.7 million (82 percent) of the City's general fund capital plan remains unfunded.
• All six of the City's collective bargaining agreements (CBAs) have expired and the 2017 proposed budget does not contain provisions for any potential increased costs associated with settling the CBAs.
• The City's proposed budget is not in compliance with the tax levy limit and City officials have not adopted a local law to override the limit.

Key Recommendations

• City officials should identify funding sources for capital expenditures and stop deferring capital costs.
• City officials should be cognizant of the potential financial impact of the settlement of the expired CBAs and be prepared to provide for funding in the event that any of the CBAs are settled in 2017.
• Be mindful of the legal requirement to maintain the tax levy increase to no more than the tax levy limit as permitted by law, unless adopting a local law to override the cap.