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March 27, 2008

 

DiNapoli: Saratoga Springs' Financial Picture Showing Signs of Improvement

City of Saratoga Springs officials instituted a new approach to help the city structurally balance its budgets, an audit released today by State Comptroller Thomas P. DiNapoli found. The audit, which covered the period January 2003 to 2006, found the city had been adopting structurally imbalanced budgets, putting the city on unsound financial footing.

“Saratoga Springs is one of upstate New York’s most economically vibrant cities,” DiNapoli said. “But the City Council must do a better job of balancing its books and adhering to sound budget practices. Saratoga Springs officials have recognized this and are acting accordingly.”

The audit found that the council routinely relied on its unreserved fund balance money left over from previous years that had not been earmarked for any particular purpose to cover the city’s operating costs, including its water and sewer systems. Because the council had not adequately accounted for spending, the city had a combined financial decline in the general, water and sewer funds of $3.8 million in December 2003 to $488,426 in December 2006. In addition, the city started 2006 with a $591,000 budget deficit in its general fund.

On a positive note, the city increased the sewer unreserved/unappropriated fund balance from a deficit of $171,000 in 2005 to a positive balance of $227,000 by the end of 2006. DiNapoli noted that city officials provided his office with additional financial information indicating that following the audit period, the city’s negative financial trends were not continuing.

DiNapoli recommended that the council continue to rely on sources of recurring revenues sufficient to finance basic operations in the general, water and sewer funds. City officials generally agreed with DiNapoli’s recommendation and indicated that they would take further corrective action.

Click here to view the audit.

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