Purpose of Budget Review

The purpose of our budget review was to determine whether the significant revenue and expenditure projections in the City’s proposed budget for the 2019 fiscal year are reasonable.

Background

The City of Troy, located in Rensselaer County, is authorized to issue debt not to exceed $24,706,000 to liquidate cumulative deficits in the City’s general fund for the years ending December 31, 1993, 1994 and 1995. New York State Local Finance Law requires all local governments that have been authorized to issue obligations to fund operating deficits to submit their proposed 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 in the proposed budget are reasonable.
• The proposed budget includes estimated revenues for the refuse fund, but the City Council (Council) has not yet authorized the solid waste management and bulk refuse collection fees to realize the estimated revenues.
• The contingency appropriation in the proposed refuse fund budget provides the City with minimal flexibility in the event of unforeseen circumstances that may require additional funds.
• The City’s capital plan for the purchase of equipment and vehicles for the general and refuse funds remains unfunded through the proposed budget and instead will be financed by issuing debt.
• Five of the City’s six collective bargaining agreements (CBAs) have expired and the City faces potential significant increased salary and wage cost when these agreements are settled.
• The City’s proposed budget is in compliance with the tax levy limit.

Key Recommendations

• It is essential the Council make the appropriate modifications to the City Code to authorize the solid waste management and bulk refuse collection fees or fund through other revenue sources. If the fees are not authorized, or are approved at different rates, the refuse fund budget should be modified accordingly.
• City officials should closely monitor the refuse fund throughout 2019 and make modifications as necessary.
• We encourage City officials to identify current financing sources for the purchase of equipment and vehicles instead of relying on the issuance of debt to finance these purchases.
• City officials should consider the potential financial impact of the settlement of the expired CBAs in the event that any of the CBAs are settled in 2019.
• The Council should 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 it properly overrides the tax levy limit.