The city of Amsterdam was one of two cities designated as having “significant fiscal stress” by New York State Comptroller Thomas DiNapoli Thursday.
Using its “Fiscal Stress Monitoring System” the Comptroller’s office evaluated all local municipalities with non-calendar year budgets. The fiscal stress system evaluated financial indicators including year-end fund balance, cash position, short-term cash-flow borrowing and patterns of operating deficits.
“Our indicators show fiscal stress remains relatively low among New York’s villages, while some cities continue to struggle,” DiNapoli stated in a news release. “Local officials are encouraged to continue to be mindful about how budget practices today impact budgetary solvency in the future. This system is designed to help keep local officials and the public informed on the financial and demographic drivers of fiscal stress.”
The Comptroller’s Fiscal Stress Monitoring System determined that two cities, Amsterdam and Long Beach (Nassau County), were in significant fiscal stress; three villages, Island Park (Nassau County), Maybrook (Orange County) and Valley Stream (Nassau County) and the city of Yonkers (Westchester County) are in moderate fiscal stress; and four villages, Catskill (Greene County), Canisteo (Steuben County), Fultonville (Montgomery County) and Sackets Harbor (Jefferson County) were designated as “susceptible to fiscal stress.”
Fifty-one villages and three cities failed to file the necessary and required annual financial reports and did not receive a score, according to the Comptroller’s Office.
Amsterdam Mayor Michael Villa said his city’s being found to be in significant fiscal stress was hardly shocking. While Villa said he believes Amsterdam probably could have qualified for this list each of the last 10 years, the city has only recently brought its financial audit statements up to date enough to be accurately evaluated by the Comptroller’s Office.
“Look, this isn’t unexpected. We are prepared to take this to the next step and try to resolve this issue,” he said.
Amsterdam has been dealing with a widening accumulated budget deficit, now estimated at about $9 million, for at least the last seven to eight years. Two reasons cited for the deficit include the city’s failure to foreclose on any properties for seven years and improper bookkeeping practices. City officials have attributed these problems mainly to chaos in the city Controller’s Office due to deaths and resignations, prior to the election of current City Controller Matthew Agresta.
On Tuesday, the Common Council voted to authorize Agresta to request the New York State Financial Restructuring Board to certify the size of the city’s deficit, a first step in the process of obtaining permission from New York state to borrow money in an amount equivalent to the accumulated deficit, allowing the city to have a fund balance made up of the debt, which would then be paid off over time.
Villa said Amsterdam will need the New York state Legislature to pass special home rule legislation to enable the deficit financing. He said he’s hopeful the city will know by June whether that will happen. He said the designation of Amsterdam as being under significant fiscal stress lends credence to his concern that the Comptroller’s Office could take over Amsterdam’s city government and put it under a control board to fix the city’s finances, something he’s trying to prevent.
“Now that we have started the process, I think we are going to be allowed to take the path that we want to take, which benefits everyone realistically. We’re just hopeful that this process moves in a pretty quick fashion. I know that’s asking a lot, considering the hoops we have to jump through,” he said.
Fultonville Mayor Linda Petterson-Law said the Comptroller’s designation of Fultonville as being susceptible to fiscal stress, is partly due to accounting practices under the former long tenured mayor Robert Headwell, now District 4 Legislator and chairman of the Montgomery County Legislature.
“Long story short, what we are reporting now is a true representation of our fiscal situation since May 2017, however, we are in the midst of several situations created by the former mayor and perhaps others that have had an adverse effect on our fiscal situation,” she said.
In January, DiNapoli released fiscal stress scores for school districts. In September, his office will release scores for municipalities with a calendar-year fiscal year, which includes all counties, towns, the majority of cities and 10 villages.