The Mayors Proposed Budget Message

Presented to the Board of Estimate and Apportionment

Mayor Robert M. Palmieri

City of Utica, New York

February 19th, 2016

Over the past four years the City of Utica has undergone a positive financial and economic turnaround by executing a financial recovery plan and implementing four consecutive balanced budgets.  

As a result, we’ve turned inherited million dollar deficits, a negative outlook from the financial rating institutions and a negative fund balance into three consecutive surpluses, an upgraded financial outlook and an unreserved fund balance that is now over 5% of the budget, as directed by the residents via referendum.

This was achieved by working together and building partnerships.

While the facts clearly show progress has been made, more work needs to be done to ensure fiscal sustainability as many of the largest budgetary cost drivers are not in the City’s control.

The total cost of my proposed FY 2016-2017 budget is $68.4 million; which increases spending by only 2.4% compared to the City’s FY 2008-2009 budget eight years ago. Given the drastic increases in mandated costs over the past eight years, this is a remarkable testament to the fiscal discipline the City has demonstrated in recent years.  

Similar to last year’s budget, in which we slightly reduced taxes, we kept spending as low as possible in this proposed budget.

It is important to note this proposal encompasses several contractually obligated items which increased significantly compared to last year, directly impacting the proposed budget, such as salary increases (result of four settled union contracts) and an increase in lease purchase payments.

In order to close this gap the proposed budget comes with a 1.75% tax increase.

This proposal keeps the City under the State’s 2% property tax cap and maintains the eligibility for our residents to receive a rebate check from the State next year, similar to what they received this year. In order to provide our residents needed tax relief we propose utilizing a small portion of the fund balance while still preserving the 5% reserve tax payers mandated.

I caution and urge Members of the Common Council to not make any cuts to this proposal as over 90% of the proposed budget is comprised of mandates and contractual obligations.

In addition, I am introducing an Infrastructure Improvement Program which will enable the City to fix more roads and upgrade aging infrastructure with no additional tax increase.

The Infrastructure Improvement Program would go over and above the work we currently do and help to properly and efficiently address some of the worst infrastructure issues throughout the City.

I propose we pay for this Program by working in cooperation with the Mohawk Valley Water Authority (MVWA) and renegotiate the terms of our existing note for the remaining Capital Improvement Trust so we can utilize it for this specific purpose.

In years past, the Capital Improvement Trust was used to supplement unrealistic and unbalanced budgets. This was irresponsible and depleted our Trust fund from $12 million to virtually nothing.   Unfortunately, not only did the City drain its reserves, but we had nothing to show for it.

As a result of the City’s improving financial standing, we can now use the Capital Improvement Trust money for the purpose in which it was intended; investing in and improving the City’s aging infrastructure.  

When I speak with Members of the Council and residents alike, improving the condition of our roads and overall infrastructure is a top priority. I believe this proposal will make a positive impact and it is my hope the MVWA and Council will approve this measure.  

As Mayor, my goal is to try and stay within the 2% tax cap every year. This proposed budget is balanced, fiscally responsible, provides the resources necessary to effectively run the operations of the City, improves our infrastructure and stays within the 2% tax cap.

Together, we have changed Utica’s image, complexion and trajectory. We did this by making difficult decisions and doing what is in the best overall interest of our constituents.

We must continue to govern in that light and not do what is politically convenient.

I look forward to continued dialogue with Members of the Council and residents over the next month and I am hopeful we will adopt a budget that is responsible, provides the services our residents deserve and continues the progress Utica has made over the past four years.

Mayor's Budget Presentation