SCHENECTADY — Mayor Gary McCarthy said the city is on track to run out of cash as early as October without federal relief.
“Our fund balance is gone if we don’t get that assistance, and we will need to make cuts,” McCarthy told the City Council on Monday. “Otherwise, this city will go to the point of bankruptcy at the end of this year.”
McCarthy currently projects a budget deficit of $9 million due to loss of revenue as a result of the coronavirus pandemic, a number that could grow to roughly $11.3 million if cuts in state aid materialize.
He defended floating dramatic cuts in the city’s $112 million spending plan last week without first tipping off the City Council as a way to generate public pressure for a federal bailout of state and local governments.
“What we need to do is send a message,” McCarthy said. “There’s going to be police laid off and firefighters laid off. There’s going to be major reduction in staffing, not only in Schenectady, but other communities.”
McCarthy has floated making $2 million in cuts to the city Fire Department, which would potentially result in 27 uniformed firefighters losing their jobs.
An additional $3 million in proposed cuts to the city Police Department would translate to between 30 and 40 officers being laid off.
McCarthy controls the hiring and firing of personnel.
But several lawmakers said City Hall should first probe other areas of savings, including dipping into fund balance, reducing overtime and furloughing non-essential city positions.
Councilwoman Leesa Perazzo said immediately snipping first responders would be a “injustice” to taxpayers who feel vulnerable amid the pandemic.
“To go directly to police and fire without looking at other services and options is just a grave concern to me, and I think we owe the residents of this city a more thorough review when it comes to financial concerns for the future,” Perazzo said.
PBA officials last week said cutbacks to the 160-member force may threaten public safety.
Councilwoman Marion Porterfield said residents already grapple with delayed response times owing to a backlog of police calls.
“If we really need to make cuts, we need to find other ways to do that,” Porterfield said.
Perazzo asked other council members to chime in, but they were pointedly silent.
City Council President John Mootooveren eventually said, “We have to brace for impact and work collectively to address these concerns. You can look at two departments, but you also need to look across the board, and that’s how you have to address it.”
Lawmakers can attempt to “nickel and dime” savings, said McCarthy, “but the impact is going to be felt.”
McCarthy, a Democrat, lashed U.S. Sen. Majority Leader Mitch McConnell’s suggestion that cities and states be allowed to declare bankruptcy rather than receive a bailout. McCarthy and contended the holdup of a relief package is politically motivated. McConnell is known as a highly-partisan Republican.
“This is Mitch McConnell’s dream where you get people fighting amongst themselves,” McCarthy said.
City Finance Commissioner Anthony Ferrari offered several times to share up-to-date revenue projections with lawmakers, but was told by Finance Committee Chairman Councilman John Polimeni to instead send that information through email — not in the publicly-accessible video meeting.
Gov. Andrew Cuomo has been steadfast in calling for at least $500 billion in relief to be allocated to state and local governments.
“We need the residents to also express this frustration,” said city Councilwoman Carmel Patrick. “We need to be contacting their representatives as well because we need this money.”
McCarthy said he’s been in touch with the U.S. Conference of Mayors, U.S. Rep. Paul Tonko’s office and other state, federal and local officials to discuss strategies.
The City Council’s Finance Committee on Monday ultimately approved sending a resolution to Washington asking for relief.
Other Capital Region cities have warned of cutbacks, including Albany Mayor Kathy Sheehan, who announced a projected revenue shortfall of $17 million to $20 million on Monday.
Without emergency aid, Sheehan estimated cutbacks as early as this week.
“I have asked each city department to start the process of preparing for across-the-board layoffs, service reductions and salary cuts – with the first series of reductions beginning this week,” Sheehan said on Monday.