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December 23, 2009



DiNapoli: Local Government Capital Plans Need Improvement

New York local governments, particularly towns and villages, need to strengthen their long-term capital needs planning, according to an audit released today by New York State Comptroller Thomas P. DiNapoli. The cities of Watertown, Poughkeepsie and New Rochelle were the only local governments that adopted entity-wide, long-term capital plans among ten municipalities examined by DiNapoli's auditors. Other local governments audited included the counties of Wayne, Genesee and Essex; the towns of Bethlehem, Oyster Bay and Camillus; and the city of Ithaca.

"This is taxpayer money we’re talking about," DiNapoli said. "All across New York, families are struggling to make ends meet. Local governments need to protect taxpayer money, and the best way to do that is long-term planning. Spending for capital assets—local streets and highways, buildings and water systems—is a large portion of local budgets. Taxpayers need accurate, long-term capital plans in order to build and sustain these vital infrastructure projects."

DiNapoli’s auditors concluded municipalities may not be adequately identifying their long-term capital needs and may be allowing important infrastructure to deteriorate. Four of the ten municipalities audited either included one-year lists of projects in their annual budget or allowed department heads to make decisions. Local governments with department-level capital planning processes spent an average of only 5 percent of their operating budgets on capital projects, which were not enough to meet actual needs. In comparison, municipalities using more comprehensive, board approved one-year capital planning processes spent 24 percent of their budgets on capital needs.

DiNapoli’s office recently issued a report that estimated an $80 billion shortfall in New York’s infrastructure spending and offered policy solutions, including the use of pooled financing vehicles and better coordination between municipalities and the state.

DiNapoli’s audit, covering January 2007 through August 2008, found that the City of New Rochelle was the only local government out of the ten audited that established goals and objectives, developed a policy on multi-year plans, and established criteria for ranking purchases in the plan. The lack of comprehensive long-term capital plans at other municipalities led to several lapses in project planning and funding, including:

  • the Town of Bethlehem, where capital decisions are made at the department level, had to declare an emergency to replace an elevated sewer trunk line at a cost of $710,000.;
  • $26,000 in additional costs to Essex County in order to repair a leaking roof that was ultimately torn off and replaced.

The audit recommends that local governments establish a capital assets policy that reflects their capital goals; develop a comprehensive set of records on the condition of their capital assets; adopt entity-wide, multi-year capital plans; and incorporate capital planning into the budget process. Local government officials generally agreed with the audit’s findings and recommendations. To read the full audit, visit http://www.osc.state.ny.us/localgov/audits/swr/2009/capitalplanning/global.pdf.

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