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What you need to know for 07/27/2017

Schenectady’s financial picture better

Schenectady’s financial picture better

Schenectady might find a $2.3 million nest egg under the tree this year.

Schenectady might find a $2.3 million nest egg under the tree this year.

Finance Commissioner Ismat Alam said she was confident she could replenish the city’s empty savings account before leaving for her new job next year at Proctors.

“I will make sure the fund balance is where it needs to be,” she said.

Given the city’s financial trouble this year — among other things, officials drained a savings account to pay a $1 million bill to the county — the good news might be unbelievable.

But Mayor Gary McCarthy has said all year that things wouldn’t be as bad as they seemed.

“The city is in difficult times, but not the crisis people have projected,” he said.

He wouldn’t comment on the precise nest egg figure until the city finishes the year, but said he has been working “every day” to find unnecessary expenses or potential savings.

Former city budget analyst Jason Cuthbert says he also thinks the city will wind up with an extra $2.3 million at the end of the year.

But the city is still in the hole.

The 2012 budget called for spending $4.8 million more than it raised in revenues. The city was going to use savings to make up the difference.

There have been unexpected expenses since then, but the city also collected more than $1 million in unbudgeted tax revenue.

“The prior year’s tax collection came in much stronger than we predicted,” Cuthbert said. “The foreclosure worked. In the last week people had to pay, the city took in $600,000 … In one week.”

The city had to give a tax collection firm a portion of the revenue, but the city still netted more than $1 million, Cuthbert said.

And the 2012 city budget also had “the typical padding,” Cuthbert said, referring to budgeted items that were intentionally set higher than the actual expense so that the city could have leftover funds.

By Cuthbert’s calculations, the city will end up spending $2.5 million more than it brought in this year. That’s $2.3 million less than it budgeted to overspend, which means the city would get to keep its savings account flush.

The city still has a $2.5 million structural deficit, which it must reduce to zero in the next few years. But cutting it in half in one year will put the city in a much better position than expected.

Cuthbert is still reviewing and analyzing the city’s books, even though McCarthy fired him two months ago after he publicly opposed the mayor’s stance on the sales tax contract with the county.

After his termination, Cuthbert worked closely with Councilman Carl Erikson, the chairman of the finance department, in crafting the $78 million 2013 adopted budget, which was significantly different from the budget McCarthy proposed.

Cuthbert has also worked closely with Councilman Vince Riggi, who has turned to him for advice on many financial issues.

And he’s even sent in an application for the finance commissioner position. McCarthy needs to hire someone by January, although he is hoping to find a way to work with the county on a consolidated position.

Cuthbert said he’s hoping for the job — but he’s not counting on getting hired by the man who fired him. He’s applying for other jobs too.

“I’ve got some irons in the fire,” he said.

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