Saratoga Springs reports a $4M surplus

PHOTOGRAPHER: Tatiana Zarnowski

In a development that city officials confessed surprised them, a financial report shows that the city realized a nearly $4 million surplus last year in its general fund.

The year-end internal financial report for 2007 shows a $3.95 million surplus, the biggest since 2000.

“It came as a surprise to me,” said Finance Commissioner Ken Ivins, who completed the financial report to give to the state at the end of April.

The annual audit is expected to be completed by the end of the month and is based on numbers the city provided in the financial report, Ivins said. “These are basically official.”

The report shows the city taking in $38 million last year and spending $33.9 million. The $4.1 million that was not expended, along with the existing fund balance, produced a total surplus of $6.8 million. Of that sum, $2.9 million is spoken for, leaving $3.9 million that’s not allocated.

Just a year ago, the city was on shakier ground than it is now.

The 2006 surplus was just $166,000, and Matt McCabe, then the finance commissioner, warned the council to build up the surplus to increase the city’s bond rating and protect against unplanned events.

McCabe’s conservative planning and other events beyond the city’s control put it in line for the higher 2007 surplus, Ivins said.

The $3.8 million income from video lottery terminals certainly helped, as did the county returning $700,000 in municipal funds, Ivins said. “They just held their spending, which is good, but part of it is also nothing that they planned for.”

Ivins said he had an idea about six weeks ago that the surplus might be that big. But, “until the figures are audited, you don’t really count your chickens.”

The surplus will come in handy when there are shortfalls in this year’s finances, as Ivins already expects for the VLT revenue. He noted the $3.8 million received last June from the state was estimated based on what the state expected to net in revenue for the rest of the year. But that estimate for the entire year turned out to be high so this summer’s payment will be about $300,000 to $500,000 lower to make up for that overpayment, he said.

On Tuesday, he expects to announce sales tax figures for this year, which so far are higher than last year’s numbers and seem on track with the budgeted amounts. “It’s still too early to tell,” he said, adding that much of the sales tax increase comes from the gas tax, and as gas prices rise, people may cut back on other spending.

“We won’t have a better idea until later in the year when we see what happens in the third quarter.”

Last year, the sales tax receipts failed to keep pace with budgeted amounts for much of the year as the economy slowed, and financial planners worried that sales tax amounts for this year were budgeted too high.

Ivins also hopes the $4 million surplus will keep the city from having to borrow money next year as it did in February to make a retirement fund payment. The $3 million loan ran up $22,000 in interest, he said.

“Hopefully, if we can keep this surplus in place and add to it, next year we can avoid that expenditure.”