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NYS Comptroller

THOMAS P. DiNAPOLI

Audits of Local Governments and School Districts

City of Lockport - Budget Review (B19-1-7)


Released: November 8, 2019 -- [read complete report - pdf]

Purpose of Budget Review

The purpose of our budget review was to provide an independent evaluation of the City’s proposed budget for 2020.

Background

Chapter 332 of the Laws of 2014, as amended by Chapter 147 of the Laws of 2015 (the “Act”), authorized the City to issue debt to liquidate the accumulated deficits in the City’s general, refuse, water and sewer funds as of December 31, 2013. The Act requires the City to submit to the State Comptroller each year, beginning January 1, 2015, and for each subsequent fiscal year during which the debt incurred to finance the deficit is outstanding, the proposed budget for the next succeeding fiscal year.

Key Findings

  • Based on the results of our review, except for matters described in this letter, the significant revenue and expenditure projections in the proposed budget appear reasonable.
  • The City did not appropriate any fund balance as a financing source in the 2020 general, water, sewer, or refuse fund budgets and unrestricted fund balance in the general, water, sewer and refuse funds were approximately 20.2 percent, 46.5 percent, 26.6 percent, and 30.3 percent, respectively, of the following year’s budgeted appropriations.
  • Two of the City’s collective bargaining agreements (CBAs) with various City employees are nearing settlement, therefore it is likely these CBAs will be in place in 2020.
  • The City is appealing an arbitration ruling which required hiring additional firefighters. Also, 36 City employees are retirement eligible and due buyouts totaling almost $1 million if they retire in 2020.
  • The proposed budget includes a tax levy of $13,044,260 which is the maximum levy that the City can impose without the Common Council needing to override the tax levy limit.

Key Recommendations

  • City officials should assess whether the unrestricted fund balance is sufficient for their particular situation considering various factors such as the timing of receipts and disbursements and the volatility of revenues and expenditures.
  • City officials and the Common Council should consider the CBAs nearing settlement and budget accordingly.
  • The Common Council needs to consider whether the contingency appropriations are adequate if arbitration appeals are settled and unanticipated retirements occur.
  • The Common Council should be mindful of the legal requirement to maintain the tax levy increase to no more than the tax levy limit as permitted by law, unless it properly overrides the tax levy limit.

Local Government and School Accountability Contact Information:

Phone: (518) 474-4037; Email: localgov@osc.ny.gov
Address: Office of the State Comptroller, Division of Local Government and School Accountability
110 State Street, 12th Floor; Albany, NY 12236