A resolution authorizing the City of Amsterdam to borrow up to $8.3 million to fix fund balance deficits in four city funds is on the agenda for this Tuesday’s common council meeting. The amount reflects the recent certification of the city’s deficit by the New York State Comptroller’s office.
According to the resolution, the funds will be distributed to the general, transportation, golf course, and sewer funds, which all have negative balances. According to the city’s 2017-2018 Annual Update Document (AUD) and audit reports for previous fiscal years, each of these funds borrowed significant amounts from other city funds to cover expenses.
So far, city officials have not been able to answer questions as to exactly which funds need to be repaid and how much. However, the two funds that are owed the most from other funds are the water fund ($2 million) and the capital projects fund ($5 million).
According to the same AUD, the overall deficit improved by approximately $1 million since the last audit report was issued for the 2016-2017 fiscal year, which was used by the comptroller’s office to certify the deficit. The total deficit of all funds with negative balances as of June 30, 2019 was approximately $7.3 million. However, the report has not yet been audited.
In a statement released on February 1, Mayor Michael Cinquanti wrote that before the city borrows, he will consult with the comptroller’s office, the city’s financial advisors, and the New York Conference of Mayors on the best strategy to pursue.
In January 2019, Jeffery Smith, president of Municipal Solutions, the city’s long-time financial advisory firm, suggested the city use a series of short-term bond anticipation notices (BAN’s) instead of using a single ten-year bond to finance the deficit. He also suggested that the city might not have to borrow the full amount of the certified deficit.