Working with our financial advisors, Capital Markets Advisors, LLC., and finance consultants funded by a shared-services grant awarded to the City by Dutchess County in 2016, the Finance Department presented the Common Council with a new formal debt management policy which sets limitations on general fund borrowing, and identifies new benchmarks to strive for over the next several years, as the City works to address its negative fund balance. The Common Council adopted the new policy on October 16th, 2017.
Outgoing Commissioner of Finance, Marc Nelson, said: “I’d like to thank the Council for its favorable action, as well as the Finance Committee – Councilmen Lee Klein and Mike Young – for its work on this. The Constitutional Debt Limit applies to all New York municipalities, but the City of Poughkeepsie must do even more to ensure its debt-service costs decline. This policy outlines our plan to curtail borrowing, seek refunding opportunities in favorable markets, and improve the City’s bond rating”
Read the Debt Management plan here.
The City ended 2016 with a surplus of $874,000, which will be applied to reduce the cumulative general fund deficit. In addition, the City was able to pay-down $400,000 towards a deficit of $1.2 Million in its separate Transit Fund, reducing that deficit to approximately $800,000. The consolidation of the City’s bus system with Dutchess County Transit, which is projected to save taxpayers between $300,000 and $500,000 annually, will lead to the elimination of the Transit Fund as the remaining transit deficit is paid-down.
The favorable results in 2016 have reduced the general fund deficit to $11.9 Million. At its high, just before Mayor Rolison took office, it stood at $13.1 Million.
Late in 2016, as the 2017 budget was being crafted, the administration also made the decision to include a specific budgeted amount for deficit reduction, something which had never been done before. Although the amount, $225,000, was small in comparison to the deficit, it sent a strong message to City stakeholders and other interested parties that the City is serious about aggressively attacking the deficit.
At this point, as we enter the fourth quarter of 2017, management projects a 2017 surplus of about $569,000. That number is exclusive of the budgeted $225,000 which has already been earmarked to be applied against the deficit. While these are preliminary numbers, the City’s deficit could be reduced by a further $794,000 when the 2017 results are finalized.
The 2017 FTA Triennial Report, expected to be the City’s final compliance audit by FTA, was released on August 29th and may be viewed here. The most comprehensive of the FTA review processes, the Triennial Audit was last conducted in 2014.
For the years 2014-17 covered by this report, the FTA found no deficiencies in 16 of 17 categories. The lone finding was a weakness relating to the procurement of outside services insofar as there was no written policy on one minor section. Working with the FTA’s team, the Finance Department was able to address that issue before the Final Report was issued. Marc Nelson, Acting City Administrator said “This report is such a welcome acknowledgement of the real effort which was made by many city employees to maintain the highest level of transit service for our citizens during a very challenging period for the City. I would especially like to acknowledge our DPW and Transit staff, as well as Karen Sorrell – Deputy Commissioner of Finance – for their work throughout these years and for their professionalism during the review period itself.”