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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 2020 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 municipalities 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

• The significant revenue and expenditure projections in the proposed budget are reasonable.
• While the estimated revenues for the proposed refuse fund budget appear reasonable, they include $250,000 in estimated revenues for fees that the City has not previously assessed.
• The minimal contingency appropriation in the proposed refuse fund budget provides the City with a limited amount of 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.
• One of the City’s collective bargaining agreements (CBA) is expired and the City faces potential significant increased salary and wage costs in the event that the CBA is settled in 2020.
• The City’s proposed budget includes a tax levy of $26,304,399.

Key Recommendations

• City officials should closely monitor the refuse fund through 2020 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 in the event that the City’s one expired CBA is settled in 2020.
• The City 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.