City of Newburgh – Budget Review (B6-12-23)
Released:November 20, 2012 -- [read complete report - pdf]
Purpose of Audit
The purpose of our budget review was to determine whether the significant revenue and expenditure projections in the City’s tentative budget for the 2013 fiscal year are reasonable.
The City of Newburgh, located in Orange County, issued debt totaling $15 million to liquidate the accumulated deficit in the City’s general fund as of December 31, 2010. Local Finance Law requires all local governments that have been authorized to issue obligations to fund operating deficits to submit their tentative budgets for the next fiscal year to the State Comptroller for review while the deficit obligations are outstanding.
Based on the results of our review, except for certain matters, we found that the significant revenue and expenditure projections in the proposed budget are reasonable.
- The realization of approximately $1 million of water sales, sewer charges, and refuse and garbage fees revenues is contingent upon the City Council’s approving a 10 percent rate increase.
- The amount of appropriated fund balance in the general and water funds is a relatively high percentage of the available fund balance. Because these are non-recurring funding sources, the City may face a shortfall of over $900,000 in its 2014 budget.
- The City’s proposed budget includes a $400,000 contingency appropriation, an amount that represents 1 percent of total anticipated general fund expenditures.
- The revenue from the inter-municipal agreement with the Town of Newburgh to provide sewer services is based on the old calculation method and is overstated.
- Our analysis of the City’s collection rate for uncollectable taxes indicates the uncollectable rate is closer to 5 percent, rather than 3.5 percent, or $300,000 more than the City has allowed for.
- The City has not developed a capital plan.
- The City’s proposed budget complies with the tax levy limit.
- Review projected revenue and appropriation amounts identified in this letter. Review the budgeted amounts of appropriated general and water fund balance. Determine the necessary adjustments or course of action necessary to address the identified issues.
- Recalculate the sewer revenue and adjust the appropriation for uncollectable taxes.
- Develop a capital plan.
Local Government and School Accountability Contact Information:
Phone: (518) 474-4037; Email: email@example.com
Address: Office of the State Comptroller, Division of Local Government and School Accountability
110 State Street, 12th Floor; Albany, NY 12236