Purpose of Budget Review
The purpose of our budget review was to determine whether the significant revenue and expenditure projections in the City's adopted budget for the 2017 fiscal year are reasonable.
The City of Poughkeepsie, located in Dutchess County, has had a general fund balance deficit since 2011. Year-end deficits ranged from $10 million on December 31, 2011 to $13.1 million on December 31, 2015. This occurred because the City experienced three operating deficits during the period from 2011 through 2015, causing the increase in the general fund balance deficit.
- The City’s 2017 adopted budget increased real property taxes by 16.5 percent. The budgeted RPT of $22,382,352 does not include an additional $825,000 that was levied, representing provision for $600,000 uncollected taxes and a $225,000 reduction of the general fund deficit. The City's budgeted revenues also include $600,000 from a one-time sale of property which did not occur in the previous year.
- Several appropriation amounts, such as health insurance, New York State Employees’ Retirement System payments and debt service payments, are much higher than required. Combined, these amounts are overbudgeted by an estimated total of nearly $2.4 million. The budgeted appropriations also include $1.6 million in unsupported allocations to other City departments for overhead services.
- The City complied with the law by adopting a local law to override the State’s legislated cap on the tax levy increase. The City’s adopted budget overrode the tax levy limit because it includes a tax levy of $23,207,352, which is an increase of approximately $3.3 million, or 16.5 percent, of the 2016 tax levy of $19,919,106.
- City officials should avoid budgeting one-time revenues as a source of income to finance recurring expenditures.
- City officials should not include appropriations for overhead services to other City departments without adequate documentation that these allocations are appropriate.