Purpose of Budget Review

The purpose of our budget review was to determine whether the significant revenue and expenditure projections in the County’s preliminary budget for the 2016 fiscal year are reasonable.

Background

The County of Rockland, located in the downstate area and bordered by Orange, Putnam and Westchester counties, was authorized to issue debt totaling $96 million to liquidate the accumulated deficit in the County’s general fund as of December 31, 2012. Local Finance Law requires all local governments that have been authorized to issue obligations to fund operating deficits to submit their preliminary budgets for the next fiscal year to the State Comptroller for review while the deficit obligations are outstanding.

Key Findings

• The County does not have a plan for reducing the general fund’s outstanding deficit.
• The 2016 proposed budget includes estimated revenues of $4 million from the sale of property, which is non-recurring revenue. However, the sale of the property may not be finalized by the end of the 2016 fiscal year.
• The 2016 proposed budget includes estimated revenues of $1.8 million for chargebacks to other governments for costs associated with out-of-county community college costs, but this amount may not be collected.
• Estimate savings of $2.5 million from employee participation in an early retirement incentive are included in the proposed budget.
• The proposed budget has underestimated the minimum required pension expenditure by $500,000.
• The County’s proposed 2015 budget exceeds the tax levy limit.

Key Recommendations

• Develop and implement a formal plan that will result in the elimination of the County’s accumulated deficit over a specified period of time.
• Identify other revenue sources or reduce appropriations to cover revenue shortfalls that may occur.
• Monitor salary savings from employee participation in an early retirement incentive and reduce other appropriations if savings are not achieved.
• Increase the appropriation for pension expenditures.
• Pass a local law overriding the tax levy limit before adopting the proposed budget.