SCHENECTADY — The city closed out 2017 with a $1.68 million budget deficit, according to city FInance Commissioner Anthony Ferrari.
This comes as Ferrari said the city is closing the books on last year during its audit, which he said the city would soon be sending to the state for its annual financial report.
The deficit was closed, though, by using money from the fund balance, or surplus, according to Ferrari.
There were a few reasons pointed out by Ferrari that led to the deficit.
One of those was the settlement of the $1.4 million contract for city firefighters, which was approved last May. It did not include a raise for 2017, but it did include a retroactive 2 percent raise for 2015 and 2016. There is also a 2 percent raise scheduled for 2018.
There was also the emergency demolitions last April of the Nicholaus Building and another building on Schenectady Street, which totaled approximately $334,000.
The city also had to settle a lawsuit over tax delinquent liens last year with the American Tax Funding LLC for $1.75 million over three years. Ferrari said the city paid approximately $1.2 million of what it owed in 2017 because the city had to accrue the cost of both last year and this year for accounting reasons to purchase back some of the liens.
Then, there was also the fact the city only received 2.03 million of the $2.75 million it projected to receive in revenue sharing from the Rivers Casino & Resort in 2017. It prevented the city from delivering the potential 18 percent tax cut it referred to in a June 2014 resolution, leading the city to only cut property taxes by 1 percent for 2018.
However, that tax cut was erased thanks to the city raising water and sewer rates.
The less than expected revenue from the casino in 2017 also forced the city to tamper its expectations by only budgeting $2.3 million in the casino for 2018.
“Those were all unexpected in the budget,” Ferrari said of the 2017 financials, adding the deficit could have been $3 million.
That was staved off by Mayor Gary McCarthy cracking down on expenditures from all city departments, Ferrari said.
All of the departments, including the Police Department, came under budget.
“The mayor was tough on making approvals of any unnecessary expenditures,” Ferrari said. “And it worked.”
Councilwoman Leesa Perazzo said she understands there were a lot of unexpected events that led to the deficit. She said the council can only do what it can to try to prepare for them.
That includes asking for updates about union contract negotiations. But even then, it’s hard to predict what the outcome will be, she said.
“We can’t anticipate what that’s going to look like,” Perazzo said. “We don’t know what the result is going to be to necessarily budget for it.”
Independent Councilman Vince Riggi said it will be incumbent on the Finance Committee to keep a close watch on how the city spends its money in the next year.
“It’s never good when your budget comes in short,” Riggi said. “It’s never a good sign.”
But Riggi said he heard things were going in the right direction.
Ferrari said that the future looks promising with some more projects being finalized. He specifically pointed out the $480 million Mohawk Harbor project, which is continuing to fill up with tenants.
“I believe the financial picture is very good,” Ferrari said. “We’re starting to see all these projects going on line.”
Still, Ferrari said the city will have to continue to keep its belt tight and watch its spending.
“We’re all working hard,” Ferrari said of the city. “And we’re doing more with less.”