AMSTERDAM — Further cleanup of Amsterdam’s old financial accounts should eliminate the city’s budget deficit, according to outgoing City Controller Matthew Agresta.
The city will have a surplus of approximately $6.63 million based on a preliminary comparison of revenues to expenses for the 2021-22 fiscal year presented to the Common Council by Agresta on Tuesday.
“Seeing how this is my last meeting, I figured I’d go out with a little bit of good news,” said Agresta, whose recently submitted resignation from office takes effect on Aug. 12.
Additional revenues and expenses still coming in from the past fiscal year that ended on June 30 may slightly impact the surplus balance. The final tally can’t be confirmed until the annual audit is conducted later this year after all of the financial records are closed out.
“If these numbers stay true,” Agresta said, “there will be no deficits in any of the funds for the city.”
The surplus exceeds the $5.1 million bond the city recently refinanced to cover the budget deficit that dates back several years. Amsterdam originally borrowed $7.7 million in 2020 to finance the accumulated debt. The city has reissued bonds twice as the deficit has been reduced.
A breakdown of the city’s individual accounts show surpluses of:
• $4.21 million in the general fund
• $1.02 million in the water fund
• $1.46 million in the sewer fund
• $166,825 in the sanitation fund
Only the recreation fund expended more than it took in creating a deficit of $224,310 last fiscal year. The recreation fund strictly represents the Amsterdam Municipal Golf Course.
Agresta said a budget transfer from the general fund could easily be made to cover the shortfall and the roughly $130,000 remaining from the course’s outstanding deficit.
The city’s failure to set aside contingency funds or perform budget transfers in past years to cover losses led the golf fund to rack up approximately $1.03 million in accumulated deficit as of the 2018-19 fiscal year, according to a report from the state Comptroller’s Office. This fiscal year’s budget includes $45,000 in contingency funds for the golf budget.
The city’s overall projected surplus includes approximately $3.5 million in unexpended funds the city borrowed for capital projects from 2009 to 2011. The projects were either never undertaken or completed under budget, leaving unspent money that will be recorded as revenue for the past fiscal year.
“We’ve since paid off those borrowings and that money can then be used as an offset to the debt expenses in any fiscal year,” Agresta said.
Officials knew unexpended capital project funds existed for several years, but were informed by auditors the money could not be touched until the city could prove if it had already been used. The city’s chaotic past bookkeeping practices led to the deficit that grew to over $8 million at its height that was uncovered during the 2015-16 audit.
The confused financial records had borrowed funds for capital projects mixed within a single account. Agresta solely credited Deputy Controller Cassandra Kinowski with finally reconciling the disarrayed accounts to set up the release of the $3.5 million.
“Again, these are not audited yet,” Agresta cautioned.
The city now maintains separate capital project accounts to prevent the issue from recurring, according to Mayor Michael Cinquanti.
Although pleased the capital projects accounts are finally being straightened out to put the already borrowed money to use, Cinquanti noted work reconciling the records did not begin until 2020, several years after the issue was brought to light.
“I am thrilled with this,” Cinquanti said. “But we should have known this six years ago.”
The mayor was critical of the revelation to the council of the surplus funds that could be used to wipe out the budget. Deputy Mayor and 5th Ward Alderman James Martuscello commented that he was seeing the information for the first time at the council meeting.
“We need to share information that’s good and bad in all aspects of what we do,” Cinquanti said. “We need to let the public and the council know what’s going on, there should be no surprises. When it comes to this effort to descramble these accounts, to find out the reason they were scrambled in the first place, if we don’t talk about it we can’t fix it.”
Although the projected surplus exceeds the outstanding debt borrowed to cover the city’s accumulated deficit, officials will still have to decide whether to pay off or refinance the existing $5.1 million bond after the audit is complete for fiscal year 2021-22.
“We still have that debt to pay down,” Cinquanti said. “ The audit of this year in closing is going to tell us a lot about moving forward. My goal is going to be to use as much of that money as we can to get rid of the bond.”
Reach Ashley Onyon at [email protected] or @AshleyOnyon on Twitter.
Categories: -News-, Fulton Montgomery Schoharie
