Amsterdam ranked No. 2 for fiscal stress

An aerial view of the City of Amsterdam.
An aerial view of the City of Amsterdam.

The city of Amsterdam is no longer the most fiscally stressed municipality in New York state, according to a report released by state Comptroller Thomas DiNapoli’s office Thursday.

DiNapoli’s annual Fiscal Stress Monitoring System ranked local governments with fiscal stress scores of 65 or greater as having significant stress.

Last year’s report, which measured fiscal conditions in 2018, gave the city of Amsterdam the highest possible fiscal stress score at 85.

The report released Thursday, which measured 2019 fiscal conditions, showed a little improvement giving Amsterdam a score of 83.3, ranking it second worst in the state to the city of Long Beach, Nassau County, which received the maximum negative score of 85.

The top six most fiscally stressed municipalities in New York state in 2019 were:

  • Score: 85.0, the city of Long Beach, Nassau County
  • Score: 83.3, the city of Amsterdam, Montgomery County
  • Score: 75.0, the city of Poughkeepsie, Dutchess County
  • Score: 75.0, Suffolk County
  • Score: 66.3, Westchester County
  • Score: 65.8, the city of Niagara Falls, Niagara County

Four municipalities from the worst ranked last year remained ranked on the worst list — Amsterdam, Long Beach, Suffolk County and Niagara Falls — but of those four only Long Beach’s score worsened from last year. Westchester County and Poughkeepsie are both newcomers to the worst list, and the town of German Flatts in Herkimer County improved enough to be removed from the list.

Financial indicators used included year-end fund balances, operating deficits or surpluses, use of short-term debt for cash flow and fixed costs. Environmental factors included the age of a municipality’s residents, poverty levels, property values, employment percentage, constitutional tax limit, sales tax revenue and school enrollment.

The comptroller’s report measured 2019, the last year of Mayor Michael Villa’s administration and may reflect the state Legislature’s decision in 2019 to pass a law allowing Amsterdam to borrow money to pay off its accumulated budget deficit built up over a period of approximately 10 years. Amsterdam in July borrowed $7.7 million from the municipal bond market at an unexpectedly low interest rate of 1.89 percent. The city has 10 years to pay back the bond, but plans to renegotiate the borrowing on an annual basis.

Mayor Michael Cinquanti was chagrined to hear the results of the comptroller’s report Thursday.

“That’s not good enough for us, we don’t want to be on the list anymore, my condolences to the No. 1 city it’s not fun being there, but again No. 2 is not great news,” Cinquanti said. “I can tell you that our situation is improving dramatically, and we are working very hard, and getting off the list is not my objective, but getting us fiscally stable is, and we’re making headway, and I know the comptroller’s office agrees with us.”

The 2019 law enabling Amsterdam to borrow money to finance its accumulated deficit, a practice normally prohibited by the state, included strings attached, including the requirement that the city create a three-year fiscal plan and file quarterly reports from the mayor and city controller showing actual revenues and expenses.

Cinquanti said officials from the comptroller’s office have been in Amsterdam City Hall quite often over the first six months of his administration and the city is following their advice.

“The pandemic kind of screwed up the process, but they’ve been very involved, and in fact they did review our budget process and did review our budget with a fine tooth comb, and they have found some problems with the budgeting process that are very, very helpful going forward, and we have made the corrections,” he said. “One example of how they’ve helped us would be that we have carried forward bad numbers because we don’t use actual expenditures in all the funds, and it’s necessary, and they’ve pointed this out, that we look at this much more frequently, and beginning this month there will be a new report — and I’ve been fighting for this report since I took office — from our software vendor, who we purchased our [financial] software from years ago, that will now include the necessary adjustments to the software to allow us to generate monthly dashboards for the funds, to show our actual expenses, as compared to what was budgeted on a month-to-month basis.”

Amsterdam during it’s 2020-21 budget process did not follow one of the key strings included in the deficit finance legislation which was a requirement that the city’s budget be submitted to the comptroller 30 days prior to the last date the city must adopt its budget. The deficit finance law mandates the comptroller submit recommendations to the common council for changes no later than 10 days prior to the budget deadline, giving the council five days to accept or reject the recommendations.

The bill reads, “Any recommendations that the common council rejects shall be explained in writing to the state comptroller.”

Cinquanti said the problems caused by the coronavirus pandemic delayed the city’s budget process and prevented the back and forth reports between the city and the comptroller’s office, which was allowed by the comptroller due to the extraordinary circumstances. He said for the 2021-22 budget process the city will follow all of the rules required by the deficit finance law.

Susceptible to stress

The comptroller’s Fiscal Stress Monitoring System showed municipalities with a stress score of 45 or more as being susceptible to fiscal stress. The report released Thursday showed these area municipalities as being susceptible to fiscal stress: the Montgomery County town of Glen (fiscal score 53.3), the Albany County Town of Colonie (fiscal score 52.5), the Green County Village of Catskill (fiscal score 52.5) and Village of Coxsackie (fiscal score 45.4).

Last year the fiscal stress report showed four area municipalities as being susceptible to fiscal stess as of numbers from 2018: the city of Albany (fiscal score 53.3), the town of Colonie (52.5), the city of Watervliet (50.0) and Montgomery County (48.3).

Montgomery County’s fiscal score improved enough in 2019 to be removed from the list.

Glen Supervisor John Thomas provided a statement regarding his town’s inclusion on the susceptible to fiscal stress list Thursday, and then refused to answer any questions and hung up the phone.

“The town of Glen has no external debt, the only reason we scored a [53.3] on the fiscal stress report is we borrowed against fund balance to buy a new town highway department building a year ago,” he said, before declining to provide further comment.

On Tuesday the Montgomery County Legislature approved a $50,000 budget transfer to pay for a 400 percent increase to the county’s water service fees to the Town of Glen for the county’s jail.

The increase referenced a 2019 water rate increase put in place in July 2019, according to a statement sent from the Town of Glen to the county in 2019 referencing the need to pay for a 2018 water rate hike from the village of Fultonville, which supplies the town of Glen with water and sewer services.

“We now need to pass this 400 percent rate increase to our water users,” reads a notice of water rate increase sent from Glen to Montgomery County in 2019. “The new water rates will be effective with your July 2019 water bill.”

The rate increase, however, did not go into effect until well into 2020 and several county legislators including District 2 Legislator Brian Sweet recently appeared stunned by the increase when discussing it.

Montgomery County Executive Matt Ossenfort told Sweet and other legislators that he had requested $150,000 to pay the water fees in his 2020 budget, but his requested increase was reduced by the legislature to $125,000 in the hope that the county could still receive a reduced rate given that it was such a large user of water and sewer by the county’s jail, but ultimately no lower rate was provided by the town.

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