The Gloversville City Council adopted a $15.4 million budget for 2013 on Tuesday night that, like the 2012 budget, carries no tax increase.
“It has no new taxes, no layoffs and no decrease in services,” said Mayor Dayton King.
The property tax rate for 2013 will remain at $21.71 per $1,000 of assessed property value, meaning a $2,171 city tax bill for a home assessed at $100,000.
The tax levy — the amount of money raised from property taxes — will be $7.7 million in 2013, up $9,000. The city remains at approximately 97 percent of its constitutional taxing limit.
The council balanced the budget by tapping $543,324 from the city’s fund balance, King said, leaving approximately $1 million in the account, which is a reserve of money unspent in previous budget years.
“We have a decent-sized fund balance. Since I have been in office, I have increased the fund balance 80 percent,” said King, an independent who won a four-way contest for mayor in 2009 by 147 votes.
King said the city grew its fund balance by using a mail order prescription drug provider and switching health insurance plans for staff, by saving money on salt and overtime due to a mild winter and by not granting raises to staff for several years. The city has also reduced its debt over the years and therefore is not spending as much on interest.
“We are not spending money when we did not need to, quite honestly,” the mayor said.
The initial budget came in with department requests that exceeded revenue projections by $1 million, King said. He closed the gap by:
• Eliminating $150,000 in retroactive raises for city police officers. King said police already received “raises” when they won an arbitration hearing last year that required the city to retroactively pay officers double their daily pay for working on holidays.
• Removing $1 million from the Fire Department budget for a vehicle that combines the functions of a typical pumper and an aerial ladder. King said the city is looking to purchase a used firetruck from the Guilderland Fire Department for $250,000 that combines ladder and tanker capabilities.
Going forward, King said the city’s fiscal picture should brighten with the opening next year of the Walmart supercenter off Harrison Street Extension. The city is hoping to collect $150,000 in sales tax revenue annually from the facility. In total, the city expects to collect $2.4 million in sales tax revenue, up from the 2012 projection of $2.3 million.
Based on those preliminary figures, King said he hopes to be able to offer a tax decrease in 2014; he will prepare that budget next year when he would run for re-election.
“It won’t be large, but we will be working in the direction” of a tax decrease, he said.
In recognition of the city’s brightening financial picture, Moody’s Investors Service last January upgraded Gloversville’s bond rating from junk status to investment grade, a two-notch jump that reflects stability in the city’s finances.
Moody’s said it raised the city’s rating to Baa2 on outstanding bonds totaling $5.6 million, based on Gloversville’s ability to generate adequate reserves and manage its fiscal operations. The upgrade is the first since 2005, when Moody’s dropped the rating on Gloversville’s bonds to Ba1, a ranking considered speculative for investors.
Investment grade, on the other hand, means banks can invest in the bonds because Gloversville can meet payment obligations.