CARS HOMES JOBS

Schenectady finishes year in the black

No need to tap reserves to balance budget in 2012

Thursday, May 16, 2013
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— The city finished 2012 with a $3.5 million surplus, Mayor Gary McCarthy announced Thursday.

The city also didn’t spend a dime of its savings. McCarthy had budgeted $5.4 million from reserves to balance the budget, but he didn’t need to touch those accounts.

That eliminates the city’s structural deficit, created because for many years it relied on savings to balance its budget. Auditors last year urged the city to stop spending its savings and match revenues to expenditures,

Finance Commissioner Deborah DeGenova stressed the surplus was calculated over and above the amount of money needed to eliminate the deficit.

“Actual revenue exceeded expenditures by $3.5 million,” she said.

McCarthy planned to distribute the draft audit, with details of how the city spent its money last year, at Monday’s City Council committee meetings. But on Thursday, McCarthy listed some details from the audit to show how the city reined in spending and increased revenues.

The Police Department came in under budget — a rare occurrence.

“The first time in the modern history books,” McCarthy said.

The department left unspent $173,000. McCarthy said it wasn’t a lot, but every cent counted.

“Just good management,” he said.

The Fire Department came in $265,000 under budget, and the city also saw savings in worker’s compensation costs, after an extensive training program to teach employees how to do their jobs more safely.

And the city did not fill many positions when they became vacant, postponing hirings or eliminating positions altogether.

“We just managed the vacancies throughout the year,” he said.

Other little savings added up, too. Turning off lights and mowing parks less often helped, McCarthy said.

“We get calls all the time — the grass is too high, don’t you mow the parks?” he said. “We do do it; we don’t do it as aggressively.”

Concerning revenue, he said the city had finally climbed out of the hole left when it stopped selling its delinquent tax liens to American Tax Funding. ATF had begun offering pennies on the dollar for the tax liens, and in 2011 McCarthy said the city was losing too much money in the deal.

He canceled it and began collecting taxes in-house. That left a gaping hole in the budget, and the city finished 2011 with a $4.8 million deficit.

McCarthy maintained at the time he was doing what was necessary to get the city back on solid financial footing. He pointed to the 2012 surplus as proof he was right.

“This is the planned progression of the city,” he said. “Now we’re much more aggressive in our tax collection. People are paying who weren’t paying for a long time.”

The city took hundreds of properties through tax foreclosures when some owners refused to pay. The threat prompted many others to pay up just in time.

There is a downside to the city’s improved financial condition, however.

“The negative is we won’t be classified a distressed city,” McCarthy said, referring to a new program that might have sent more state aid to the city. “We’re solving our problems internally.”

But the city still has a long way to go.

“I’ve got to continue that in 2013 and 2014 to show we’re on a trajectory,” he said.

For now, he’s used the surplus to set aside money for several emergency accounts, including one for tax stabilization. That account could be used to reduce a sudden increase in taxes in a bad year.

 
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comments

May 17, 2013
2:37 a.m.
Fritzdawg says...

I am going to assume that this is some type of attempt at satire.

May 17, 2013
10:29 a.m.
reader1 says...

Kathleen Moore - Major error in this article. Police Department coming in under budget is NOT "a rare occurrence." The only year police department did not come in under budget in recent years was 2011. That was because that was the only year they drastically cut police OT budget and did not allow them to use salary surplus to counterbalance other budget overages. Thus, the PD finishing in the red in 2011 was the rare occurrence. How do you get something like that wrong? And, if quoted accurately - I'm surprised the Mayor does not know that?

May 29, 2013
10:22 a.m.
artbarb says...

where can we find online copy of the city's 2012 financial statements? to see for ourselves.

city borrowed 7 million more in May 2013 than in May 2012 - what part does this additional debt play in the 'structural fiscal health of the city?' where are the additional revenues coming from to pay off this additional $7 million?

Is this too hard to explain? Better that nobody knows?

$66,886,355
CITY OF SCHENECTADY
SCHENECTADY COUNTY, NEW YORK
$66,886,355 Bond Anticipation Notes, 2013
$10,000,000 AT AN INTEREST RATE OF 0.70%-NOT REOFFERED
JPMORGANCHASEBANK,N.A.
$56,886,355AT AN INTEREST RATE OF 1.50% TO YIELD 0.75%
CUSIP#: 806449N75
Dated: May 16, 2013 Due: May 16, 2014

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