Saratoga County

Saratoga County ends 2007 with $30.8M surplus

The county manages to keep plenty of money in its banks.

The county manages to keep plenty of money in its banks.

Saratoga County finished 2007 with a $30.8 million budget surplus, according to information the county submitted to the state comptroller last week.

That puts the county in a “healthy” financial position, according to County Treasurer Sam Pitcheralle, especially given uncertainty about the immediate future and expectations the county will be borrowing money for some future projects.

Sales tax revenue looks uncertain for 2008, officials said, given widespread belief the country is entering or is in a recession.

“I think Saratoga County is in pretty good shape, but we’re part of a bigger picture,” Pitcheralle said Monday.

The surplus, more technically called the unappropriated fund balance, is the amount of cash on hand, not set aside for any particular purpose, as of Dec. 31, 2007.

The balance has been in the $30 million range every year for more than a decade, fluctuating a few million higher, but not shifting dramatically. Some years revenue has been underestimated, though this past year penny-pinching by county department heads appears to have been a bigger factor.

“You’ve always got those things, like maybe you’ve underestimated sales tax, so there’s always a little left over. I think it’s kind of a philosophy,” said county Law and Finance Committee Chairman Arthur Johnson, R-Wilton.

The balance is about 13 percent of the county’s $226 million budget for 2007. State guidelines allow municipalities to have budget surpluses, but generally recommend that they not exceed 10 percent to 15 percent.

At the end of 2006, the county surplus was $34.1 million. In the middle of last year, the Board of Supervisors approved a $5 million revenue-sharing distribution to towns, cities and villages that was deducted from the surplus.

The current surplus was attained even though county sales tax revenue was weaker than expected last year. The $48 million the county received was about $3 million less that it originally expected, Pitcheralle said.

Citing poor economic conditions, he’s been cautious since last fall about 2008’s sales tax projections. Pitcheralle said he’s now expecting the revenue, which grows every year, to be $51 million. That’s still less growth than in many past years.

“We’re a little concerned the economy is doing some strange things,” Pitcheralle said. “People aren’t buying like they used to.”

The sales tax is the county’s largest source of revenue, surpassing even the property tax, which last year generated $41.6 million.

Contributing to the surplus last year was that many county departments spent less than originally budgeted for them, year after year. That contributed at least $6 million to the surplus.

“Departments are told to stay within budget,” Pitcheralle said.

Pitcheralle said the surplus figure does not include the $6 million the county loaned the county water authority last year to give it cash flow. It does, however, include the $2.5 million the county will be loaning to the town of Malta this year to help it with cash flow for a road construction project in Luther Forest. Both those loans will be repaid at 4 percent interest.

The surplus money is kept in certificates of deposit or money market accounts, Pitcheralle said. The county does business with a dozen different banks and currently gets about 2.5 percent interest.

Pitcheralle said having a surplus puts the county in a position of not having to worry about its own weekly cash-flow to pay bills and make payrolls, and it will be an asset when two county agencies go to Wall Street later this year to borrow money.

The county Water Authority is expecting to borrow $37 million to finance construction of its water system, and the county sewer district will be borrowing about $54 million to finance a treatment plant expansion.

The surplus will be among the things bond rating agencies like Moody’s consider as they rate the quality of those bonds, Pitcheralle said.

He noted there are other building projects under discussion — a new public safety building and animal shelter — that could require borrowing, even if the county has a significant amount of cash on hand.

“It’s only $30 million. The way I look at it, you can’t do everything at once,” Pitcheralle said.

Johnson said that given the number of new projects under consideration, he doesn’t expect another revenue-sharing distribution with local communities this year.

The $30 million seems like about the right surplus to have, Johnson said. “It’s nice to have that cushion.”

Categories: Schenectady County


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