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Report: Schenectady's financial outlook improving

Report: Schenectady's financial outlook improving

City ends 2018 with $1.8 million surplus
Report: Schenectady's financial outlook improving
Schenectady City Hall is pictured.
Photographer: Gazette file photo

SCHENECTADY — A fresh audit of the city’s finances reveals the city ended 2018 with a $1.8 million surplus. 

The city’s revenues in 2018 exceeded predictions. At the same time, expenditures were $3.1 million less than forecast, according to a new report by Cusack & Company.

Auditor Jim Cusack briefed the City Council’s Finance Committee on Monday, highlighting what he said was an emerging fiscal picture of increasing revenues paired with decreasing costs.

Key 2018 highlights:

  • Revenues of $84,874,527 exceeded expenditures of $83,063,866 resulting in a surplus of $1.8 million;
  • The city received $13.1 million in sales tax revenue;
  • The city received $2 million from the sale of city-owned property;
  • The city received $2.6 million from casino revenue sharing.

— Source: 2018 City of Schenectady of Audit: Cusack & Company

“There’s a lot of across the board expenditure savings throughout the city,” he said.

Cusack also indicated the city was on sound financial footing, with the city gradually increasing its capital reserves and borrowing less.

“I’m very happy to report in all our findings throughout the city, we had no material weaknesses, no reportable conditions, no significant deficiencies,” said Cusack, who called the city’s internal auditing systems “excellent.”

All of the city’s operating funds are operating at a surplus except for the golf course fund, which was running a deficit of $10,400. 

Finance Commissioner Anthony Ferrari offered a breakdown of increased revenues: The sale of foreclosed properties amounted to $2 million in 2018; Rivers Casino & Resort generated $2.6 million in revenue, $200,000 more than anticipated, while more city homeowners were paying property tax in a timely fashion.

“We’re still struggling but are getting better,” Ferrari said on Tuesday. “The administration as a whole is focused on lowering taxes and property values are going up.”

The budget surplus marks a sharp reversal from 2017, when the city ended the year with a $1.6 million deficit, a measure Ferrari attributed to several large-scale expenses, including a new contract for city firefighters and emergency demolition of the Nicholaus Building.

Unplanned expenditures in 2018 included $206,000 in landslide-related costs; demolition of a Grand Street property and settlement of union contracts with AFSCME, Local 1037 and CSEA for approximately $331,000, and appropriation of $583,000 in lawsuit reserves for the third installment of the settlement with American Tax Funding over tax delinquent liens.

The city also paid $451,000 for two cases in which property owners successfully challenged their assessments.

The city has $365.7 million in total liabilities, according to the audit, including $251.2 million for post-employment benefits.

Ferrari said the city is socking away more money in reserves in order to clamp down on borrowing.

“We’re borrowing less and less every year,” he said. “We’re taking an approach that's slowly-but-surely."

Mayor Gary McCarthy said the city is in "good shape." 

While the city is taking on slightly more debt for a new wastewater treatment plant and substation, planners aim to be fiscally responsible while doing so.

“I’m pleased with the performance of staff," McCarthy said.

Finance Committee Chairman John Polimeni said, "It really shows the hard work the mayor and his staff have put in to contain costs, as well as what the Finance Committee has done to put together a great budget.”

Councilman Vince Riggi was more circumspect.

"Even though this is good news, it also means that our budget for 2018 was quite a bit off, meaning taxpayers were paying at least 4 percent more in city taxes then they should have," he said. "It's like getting a huge refund on your income tax: all it means is that you had too much withheld the previous year."

The city Claims Committee on Monday also agreed to refund Rite-Aid $331,000 after the pharmacy chain successfully contested past assessments of two former properties located within the city: 1035 State St. and 1203 Eastern Ave.

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