Saratoga Springs has too much money in 'rainy day fund'

PHOTOGRAPHER: Stephen Williams

The city has so much money in its “rainy day fund” that $1.5 million needs to be used this year, Saratoga Springs Finance Commissioner Michele Madigan said Monday.

The city general fund ended its 2014 fiscal year with a $91,000 surplus, she said, bringing the total unrestricted balance — that “rainy day fund” — to $7.8 million, based on unaudited figures released by Madigan.

The city charter requires that the unallocated fund balance not exceed 15 percent of the operating budget, so Madigan said $1.54 million needs to be used — either spent or reserved for a specific future use.

“You want to use it. You can’t be seen as hoarding taxpayer money,” she said.

Possible uses for the money could include strengthening existing reserve accounts; spending it on infrastructure or other capital needs; planning for future retirement costs; or setting it aside to settle expired labor contracts.

The commissioner of finance is required to make recommendations to the City Council for the use of such funds, following an independent audit.

Madigan said the independent audit won’t be finished until July or August, and her recommendations for how to use the money will be made sometime after that.

She said the city has fortified its reserves over the past several years, which has contributed to its AA+ bond rating and helped it obtain low interest rates on bonds for capital projects.

The reserves could be key to future planning if the state’s video lottery terminal aid were cut.

This year, Madigan’s budget anticipated the cut in VLT aid proposed by Gov. Andrew Cuomo, though legislative negotiations increased it by $500,000, to $2.3 million, the same as what the city received the year before. The money is compensation for hosting the VLTs at the Saratoga Casino and Raceway.

“VLT revenue is currently 4.4 percent of the city’s operating budget. Losing any amount of this, especially as we retain the expenses of the host city, is a challenge that my administration has been preparing for,” Madigan said.

Regarding the 2014 city budget, Madigan said the $91,000 year-end operating surplus on a $41.2 million budget is an indication of the good budgeting work by department heads.

“Departments did exactly what I recommended — ask for the funds needed and use the funds received. Budgeting is planning and this is clear evidence of a good and well-implemented plan,” Madigan said.

Both the water and sewer funds also ended fiscal 2014 with annual operating surpluses: The water fund, $468,000 operating surplus, and a $2 million fund balance; and the sewer fund $130,000 surplus, with a $990,000 fund balance.

Those funds were running in deficits as recently as 2009.

Madigan said a full presentation will be made at tonight’s City Council meeting.