Scroll down to view article
Scroll down to view article
Scroll down to view article
Scroll down to view article
Scroll down to view article
Scroll down to view article

Barone recommends use of fund balance to cover budget shortfalls

Controller Matt Agresta said on Wednesday that the Commom Council will still need to make up an additional $277,000 in decreased expenses or increased revenue in order to stay under the NY State mandated 2% tax increase limit.

Common Council members asked Agresta for the figure at last night’s budget meeting. The figure takes into account a variety of cuts to health insurance and salary lines that the council has agreed on so far during budget meetings this week. Agresta added that it would take an additional $110,00 to $120,000 in order to achieve a 0% tax increase.

The shortfall stems from the council’s consensus not to include a $660,000 revenue line from a proposed ambulance service which was included in the budget submitted by Mayor Ann Thane. Council members have cited a city charter law which specifically prohibits the fire department from running the service.

Alderman Ron Barone said several times during the meeting that he is in favor of spending down the general fund balance in order to avoid raising taxes.

The city’s 2012-2103 Annual Update Document reports that the city’s general fund balance at the end of 2013 was $612,305. However, due to ongoing efforts to fix problems with the city’s financial records, there is no official figure for the city’s current general fund balance.

In regards to making up the budget shortfall, Barone said, “If we can’t find it, I’m going to go half a million on fund balance.”

“Out of what fund?” asked Agresta.

“Just takin’ a guess we have a fund balance,” said Barone.

“I really can’t even respond to that,” said Agresta.

“Well if we get the books done we’ll know,” said Barone.

“We’re not going to be done in 10 days,” said Agresta, referring to the council’s June 1 deadline to vote on their changes to the budget.

“Well then I’m taking a shot. I’m going to take a half a million out of fund balance,” said Barone.

Later, Agresta said, “I can’t go with using general fund balance to balance the budget.”

“Before I raise the taxes, I’ll deplete the the fund balance, I don’t care what the state says,” said Barone later in the meeting, “I’m not going to raise taxes and I’m not going over the 2% tax cap.”

“There’s pros and cons to that. Obviously you don’t want to raise taxes if you do not have to,” said Agresta. “If we’re going to get a new [credit] rating, and all they see is we’re balancing our budget using fund balance, then you get downgraded. Then any debt you have or need to get, costs a lot more. And that spreads for thirty years potentially. “

The city’s credit rating from Standard and Poor currently stands at A minus with a positive outlook.

Tags: ,

About Tim Becker

Tim Becker is the owner of AnthemWebsites.com LLC which publishes The Compass. He serves as both editor and a writer.

One Response to Barone recommends use of fund balance to cover budget shortfalls

  1. Pingback: Deja Vu: The Common Council’s Fiscal Mismanagement | Flippin' Amsterdam NY