MAYOR ROBERT PALMIERI ANNOUNCES 2014-2015 BUDGET PROPOSAL
Mayor Robert Palmieri today laid out his proposal for the 2014-2015 budget. The proposed budget includes a tax increase of $9.25 dollars per month for the average Utica homeowner.
The Mayor’s Message is attached.
Due to a number of expenses that are mandated, contractual and beyond the City’s control, a tax increase is necessary to ensure the implementation of a structurally sound and balanced budget.
The proposed budget addresses settled union contracts, our debt payment obligations and the purchase of new ambulances, DPW trucks, IT equipment and police vehicles. The proposed budget will provide the services residents of Utica deserve, such as effective and efficient plowing, green waste pick up and proactive public safety.
“While our City has grown and is moving in the right direction, we are still fixing the financial problems we inherited,” Mayor Palmieri said. “When we ran the initial numbers for the budget; it would have taken a 26.5% tax increase to balance the budget. That was unacceptable to me, and in working with my department heads we found ways to cut back and lower the proposed tax increase as much as possible, without reducing the services that are vital to continuing our economic growth. Any reduction to this budget will have an impact on the health and safety of our City”
Over the past two years, the City reduced its workforce, consolidated departments and implemented two balanced budgets for the first time in four years. These efforts led to a $4 million swing in budget operations and stabilized the City’s financial situation.
Even with this proposed tax increase, Utica’s budget is one of the leanest in New York as Utica spends less money per resident than nearly every other City in the State.
Palmieri added, “When I took office two years ago I was contemplating whether a state control board would be the only solution to fix our financial problems. Today, on the heels of two balanced budgets and high levels of economic growth, we are doing what is necessary to keep Utica moving in the right direction. I am not happy with any tax increase, but we cannot be oblivious to our financial reality and we must do what is rational and responsible.
The Mayors Proposed Budget Message
Presented to the Board of Estimate and Apportionment
City of Utica, New York
February 20th, 2014
As Mayor of the City of Utica, it is my responsibility to govern in what is the best interest of our residents. I will continue my steadfast commitment to overcoming Utica’s historic financial struggles and ensure a prosperous and promising future for our City.
Over the past two years, the City reduced its workforce, consolidated departments and implemented two balanced budgets for the first time in four years. These efforts led to a $4 million swing in budget operations and stabilized the City’s financial situation.
While our City has grown and is moving in the right direction, we are still fixing the financial problems we inherited.
In years past, the Capital Improvement Trust (Water Authority Money) was used to supplement unrealistic and unbalanced budgets. The percentage of our debt that was covered by the Capital Improvement Trust averaged nearly 40 percent per year over the course of a decade (2002-2012). This “kick the can down the road” practice was irresponsible and drained our Trust fund from $12 million to virtually nothing.
In addition to the Capital Improvement Trust, it was an accepted practice to also use the City’s fund balance to supplement budgets. Our fund balance was nearly $5 million in 2009 and was in the negative when I took office. Today, our fund balance is up to approximately $1 million, and while we have seen a positive turnaround we are not yet out of the woods.
In recognizing this reality, I submit the Mayor’s 2014-2015 Budget for the City of Utica.
For the third consecutive year, I am submitting a Budget that is structurally sound, does not use any fund balance and provides levels of service that our residents expect and deserve at the lowest cost possible.
As state and federal aid continues to remain flat or decrease, there are less outside resources available to offset the increase in expenditures that are mandated and/or contractual and beyond the City’s control.
Over 86% of the expenditures in my proposed Budget are mandated items that the City is contractually obligated to pay.
When running the initial numbers for the upcoming Budget; a 26.5 percent tax increase would be necessary for it to be balanced.
A 26.5% tax increase is unacceptable.
In working with staff we cut millions in spending from the initial budget.
However, the settled union contract with the Utica Police Benevolent Association, increase of our debt obligations and the necessary lease purchase agreement for new ambulances, DPW trucks, IT equipment and police vehicles alone increased this year’s Budget by nearly $1.9 million compared to last year.
In order to responsibly address these expenses and ensure the financial security of our City I am proposing an 8.73 percent tax increase which equates to a $9.25 per month cost for the average Utica homeowner (average Utica home is assessed at $55,000).
After reviewing the initial budget; our goal was to lower any tax increase as much as possible, without reducing the services that are vital to continuing our economic growth. This is the most we can cut without taking the muscle out of the body. Any reduction to this budget will have a direct impact on the health and safety of our City.
The City of Utica is one of the leanest in New York as Utica spends less money per resident than nearly every other City in the State.
When I took office two years ago I was contemplating whether a state control board would be the only solution to fix our financial problems. Today, on the heels of two balanced budgets and high levels of economic growth, we are moving Utica in the right direction. I am not happy with any tax increase, but I cannot be oblivious to our financial reality.
