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.”
Each year in August/September, the City’s Finance Department, in consultation with all City Departments, city stakeholders, engineering consultants and our grant-writers, prepares a five year forecast which charts a course forward for major city projects and purchases. From new Fire equipment, such as a $1 Million Dollar ladder truck, to replacement vehicles for our City police force, from major infrastructure projects such as roof-replacement at the sewer plant to repairs to the City Hall roof, the Capital Plan is a roadmap for future projects. Importantly, the Capital Plan sets forth our current thinking about how these projects and purchases will be funded, the order in which they may be undertaken, and the duration of time we anticipate each project taking. The annual Capital Plan is merely an outline, as unforeseen emergency repairs and other capital expenditures may occur despite not being known. Funding may become available that is only eligible to be spent on a certain type of project, elevating one project ahead of another despite it possibly being planned as a lower priority.
We encourage public comment on this plan at an upcoming public hearing, the date for which will be set by our Common Council and posted here in the near future.
Mayor Rob Rolison said today that the City of Poughkeepsie will end 2016 with a projected surplus in its General Fund of $544,000. “This positive news shows the impact that cost-containment and careful monitoring of expenses throughout the year has, and why we should not transfer savings from any particular expense line to some other expense category mid-year. It’s the fiscally responsible decisions we make during the year that lead to good news at the end of the year.”
City Commissioner of Finance Marc Nelson said “We realize there is a lot of work still ahead of us, but this is an encouraging result for a year which could have gone either way until the very end. City Departments did an extraordinary job of managing to their budgets and adapting throughout the year”.
The favorable 2016 result will effectively reduce the City’s cumulative general fund deficit from $13 Million to $12.5 Million. Additional cost reduction and restructuring initiatives, including the upcoming consolidation of the City’s bus system with the County transit system, are projected to save taxpayers up to another $500,000 annually.
“Fiscal stabilization is a gradual process, but it’s the key to much of what is so important to us all, from public safety to clean streets and thriving businesses. When we manage our City finances well, we are rebuilding our ability to address the daily concerns of our citizens, and we are building a more strategic and responsive city government.”
The City of Poughkeepsie
Annual Sanitation Charges to be Billed Separately – Effective 2017
In 2013 the Common Council adopted a resolution changing the billing system for sanitation so that the charges were billed as a separate line on the homeowner’s annual tax bill. Although Former Mayor Tkazik vetoed the resolution on January 17, 2014, questioning the appropriateness of asking mortgage escrow companies to make sanitation payments on behalf of their customers, the Council overrode his veto and the change took effect in 2015. Typically mortgage documents do not authorize lenders to collect sanitation charges as part of their escrow agreements with property owners.
Since the change became effective, many of the predicted problems became reality. For the first year, caught unprepared, mortgage servicers did make the larger escrow payment. In turn, they increased homeowner’s monthly mortgage payment by adjusting their escrow. Later, increasing numbers of lenders declined to pay the sanitation charge (but may have neglected to tell their customers of that decision). This resulted in unintended delinquencies, and in late charges being assessed to homeowners. Rather than increasing the city’s collection rate on sanitation charges as was intended, the action created confusion amongst banks and property owners. Landlords who had previously passed sanitation bills along to tenants also found the change inconvenient and burdensome.
Because of the negative impact, I asked Mayor Rolison and the new Common Council to revert to the former billing system. That request may be viewed here, and was approved by action of the Council in November, 2016. A copy of the resolution may be viewed here.
Customers will now once again receive separate sanitation bills, which will be mailed in mid-February, 2017. Charges may be paid by mail, in person at City Hall, or online by clicking here.
Commissioner of Finance