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Purpose of Budget Review

The purpose of our budget review was to provide an independent evaluation of the City’s adopted budget for the 2021 fiscal year.

Background

The City of Mt. Vernon is located in Westchester County.

Key Findings

• Significant revenue and expenditure projections in the adopted budget are not reasonable. The City’s budget also was adopted 81 days late.
• The adopted budget relies on non-recurring revenue sources, including fund balance appropriation and sale of real property.
• Revenues for real estate transfer taxes, mortgage taxes and Court fees are unsupported and could be overestimated.
• Appropriations for overtime, health insurance, retirement, contingencies, separation payments, contractual settlements, and unpaid and unknown liabilities could be underestimated.
• The City’s tax overlay may not be sufficient to cover the amount of uncollected taxes and could create a shortfall in 2021.
• The Comptroller has not prepared a valuation of the reserve for delinquent taxes, as required, and has not filed the City’s 2020 or 2021 Constitutional Tax Limit form.
• The City’s adopted 2021 budget includes a tax levy of $62,537,580. Because the City has not filed its 2020 or 2021 tax cap forms, the City cannot be certain that the tax levy required by the adopted budget is within the tax levy limit.

Key Recommendations

• Work with the Comptroller to determine current fund balance levels, identify all outstanding liabilities and develop a plan to maintain fund balance at a reasonable level.
• Monitor real estate transfer tax, mortgage tax, and Court fees revenues closely throughout the fiscal year and make any needed budget amendments if revenues fall short of estimates.
• Monitor overtime, health insurance and employee separations closely throughout the fiscal year and make any needed budget amendments to ensure appropriations are sufficient.
• Determine how the excess retirement liability should be covered and make any needed budget amendments.
• Monitor tax collections closely throughout the fiscal year and make any needed budget amendments if revenues fall short of estimates.
• Prepare a valuation of the reserve for delinquent taxes and submit the same in writing to the Board as required by the City Charter.
• File the City’s outstanding Constitutional Tax Limit and Real Property Tax Cap forms.