Purpose
The purpose of our budget review was to provide an independent evaluation of the City’s proposed budget for 2023-24.
Background
Chapter 531 of the Laws of 2019 authorizes the City to issue debt not to exceed $8.3 million to liquidate the cumulative deficits in the City’s general, transportation, sewer and recreation funds accumulated as of June 30, 2018. Local Finance Law Section 10.10(d) requires all municipalities that have been authorized to issue obligations to fund operating deficits to submit to the State Comptroller each year, starting with the fiscal year during which the municipality is authorized to issue the deficit obligations, and for each subsequent fiscal year during which the deficit obligations are outstanding, their proposed budget for the next succeeding fiscal year.
Key Findings
- The significant revenue and expenditure projections in the 2023-24 proposed budget are reasonable. However, we identified certain revenue and expenditure projections and other matters that should be reviewed by the Mayor and Council.
- City officials did not implement all recommendations in our previous budget review letter when preparing the 2023-24 proposed budget.
- The Mayor submitted the 2023-24 proposed budget to the Council on April 19, 2023, or 18 days after the Charter-established deadline.
- The proposed budgets for the general and recreation funds are not structurally balanced because they include subsidies from other funds to finance their operations.
- The proposed budget allocates appropriations for personal services, contractual expenditures and employee benefits between the operating funds using unsupported allocation methods.
- Three of the City’s seven collective bargaining agreements (CBAs) have expired. The CBAs cover the salaries and wages of approximately 50 City employees. The City faces potential increased salary and wage costs when these agreements are settled.
- The City’s proposed budget includes a tax levy of $6,340,466, which is within the legal limit.
Key Recommendations
- Ensure future proposed budgets are submitted to the Council on or before the deadline.
- Continue to evaluate and explore ways to make the general and recreation funds self-sufficient.
- Closely monitor appropriations throughout 2023-24 and modify the budget as necessary.
- Develop an allocation plan based on detailed analysis that ensures costs allocated to each fund are directly related to its operations.
- Consider the potential financial impact in the event that any of the CBAs are settled in 2023-24.