NISKAYUNA — The Niskayuna Town Board is banking on a new plan for fiscal flexibility.
The board on Jan. 14 unanimously voted to adopt a fund balance policy for the town's general and highway funds designed to:
- Provide greater transparency to taxpayers on fund allocations.
- Prevent acquisition of tax proceeds faster than they are needed.
- Ensure adequate cash flows for operating expenses.
- Secure and maintain investment grade bond ratings.
- Offset unforeseen or significant economic downturns and revenue shortfalls.
- Fund emergency expenditures in excess of the line item contingency fund.
"The benefit of having a fund balance policy for our town is, number one, we didn't have one before and now we do," said Town Supervisor Yasmine Syed. "It's been prescribed by the Office of the State Comptroller that towns, school districts, municipalities, cities, whatever level of government — that it's prudent to have a fund balance policy in place.
"I'm glad we have one finally, it was one of my goals when I was serving during my first term," Syed added. "We didn't get it done, but I'm glad we're kicking off the new year having accomplished passing a very comprehensive fund balance policy."
The establishment of such a policy was discussed during 2019 meetings of the Town Board.
Syed said the policy also means the town will now operate with a capital reserve fund.
"So when we appropriate a certain amount of fund balance — we have very healthy amounts — it's likely we will be moving approximately $1 million, maybe a little bit less than that, into our capital reserve fund."
Syed said the money could be used for capital improvement projects.
"Before, we would have to bond for certain capital improvements," she said. "Now, we'll actually have the cash to fund some of these projects."
Bonding less, Syed said, means saving more.
"If we can pay cash for items, we're not going to be paying that interest," she said. "That ultimately is savings that can be passed to the taxpayers."
Town surpluses, the supervisor added, now include $3.9 million for the general fund and $1.8 million for the highway fund.
Board members welcomed the new policy.
"I think this is a very good start," said Councilman John Della Ratta, who also chairs the board's finance committee. "We do need a fund balance policy, especially in light what has occurred the past couple of years.
"I know, in privilege of the floor, there has been a lot of talk about the preliminary budget and what is going on with that," he added. "Essentially, we are at least $761,000 over budget in that preliminary budget. That number might actually be a little bit more than a million dollars, so there are going to be quite a bit of holes to fill."
Della Ratta said the new policy will not address the current fiscal situation.
"This policy will only address this type of fund balance spending in future years so we won't be able to spend $761,000 dollars surplus out of our fund balance because it will be against this policy," he said.
Della Ratta also said town officials cannot make up for "years of over-budgeting" with a 6 to 8 percent tax increase anymore. "We can only raise taxes 2 to 4 percent," he said. "Niskayuna hasn't raised taxes at all the last four years and that may be catching up with us now because we are really over-budgeted. So this policy is a good starting point, we can amend it and tweak it as the years go by, we probably will have to do that."
Councilman Bill McPartlon said establishment of the fund balance policy was a collaborative effort that involved council members and supervisor.
"We had looked at many fund balance policies before and it took time to get one we could all agree on and one that would work for our town," McPartlon said.
McPartlon also thanked Comptroller Paul Sebesta for research into the fund balance policy.
"This is what happens when we work collaboratively on the board," McPartlon said. "As Councilman Della Ratta said, it's a first step in ensuring our financial stability here at the town."
Councilwoman Rosemarie Perez Jaquith, participating in her first board meeting as an elected official, also believes the fund balance policy is a step in the right direction. Like Syed, she likes the creation of a reserve fund account and a move away from bonding.
"We'll actually be able to allocate reserves for items we should be paying for out of the budget," she said.