"It must be remembered that there is nothing more difficult to plan, more doubtful of success, nor more dangerous to manage, than the creation of a new system. For the initiator has the enmity of all who would profit by the preservation of the old institutions and merely lukewarm defenders in those who would gain by the new ones." Machiavelli
Conti's Budget LetterBy DIA, Section News
Here is the letter. There were 2 attachments to the letter. The first I don't have and the second is DiNapoli's and is here. If you are planning on being a taxpayer in Albany from 2010 on, read it and weep.
MEMORANDUM November 17, 2009 (corrected
11/18/09) To: Council Colleagues Fr: Richard Conti Re: 2009 Albany Budget As we move forward on consideration
of the Mayor’s proposed budget for 2009 I think there are several
issues we need to consider. This memo addresses some concerns,
immediate areas where savings might be found and longer term areas for
review. Overview A budget for any fiscal year
is part of a multi-year financial plan; the document as presented by
the Executive, however, is not a multi-year blueprint. On February
6, 2008 the city submitted a multi-year fiscal plan to the NYS Division
of Budget projecting an operating deficit of $14.9 million in 2009 and
$20.4 million in 2010 (Attachment A). At the time, the main initiative
in the city’s plan to close the operating gap for 2009, and beyond,
was to secure additional state funding, primarily Harriman Campus PILOTs. The proposed budget closes
what was a projected $14.9 million operating deficit for 2009 through
a series of actions; it only works, however, if it is used as a bridge
to structural reforms that will carry us into future years. We
cannot go back to where we were, we need to move forward and use the
current financial situation as an opportunity for change. We also
need to understand that Albany’s current financial problems are a
combination of knowingly spending beyond our means which has been exacerbated
by an economic downturn and the State’s own fiscal problems. Concerns with 2009 Budget I have the following concerns
with the 2009 proposal: Sales Tax Revenue:
The budget projects an increase in sales tax revenue which may not be
realized. The Albany County budget contains an essentially flat
growth assumption. A copy of the “Albany County 2009 Economic Forecast”
was previously distributed to members. Part of the strength in
recent sales tax revenue growth has been the price of gasoline, as the
price per gallon declines we can expect an impact on sales tax revenue.
Worsening economic conditions are also likely to impact sales tax revenues. State Aid Payments:
The budget projects $15,104,000 in State aid payments in 2009 under
the AIM program. Under current law the NYS Division of Budget
projects aid payments of $15, 267,537 for 2009; the proposed Executive
budget assumes a discontinuation of certain legislative additions in
the new year accounting for a portion of the difference. Although
it appears that AIM funding will not be cut in the current fiscal year,
the Paterson administration is proposing that funding be held flat for
next year and that legislative enhancements be eliminated. Under
the proposal Albany’s state aid would decline to $13,692,858, nearly
$1.4 million less than current projections. It is still unclear
what will happen next year, clearly, however, state aid to municipalities
is at risk. Property Tax Levy:
The budget proposes a 4.9 percent increase in the property tax levy
from $50,648,000 to $53,148,000. This is significant and increases
like this cannot be sustained, especially when combined with school
and county tax levy increases. We’re already at a tipping point
where the tax levy is an incentive for people to relocate outside of
the city. Ideally we would bring this rate down in the current
budget, failing that we must send a clear signal that we’re sensitive
to the property tax burden and the need to restructure government to
contain costs. A $500,000 reduction in the tax levy amount would
bring the percentage increase down to 3.9 percent. Immediate Areas To the extent we need to find
savings in the proposed budget, these are some areas for consideration: Common Council:
In the spirit of eliminating vacant positions, the position of Legislative
Aide (P/T) in the Common Council budget should be eliminated for an
overall savings of $24,764 in direct salary and benefits: Legislative Aide (P/T) 17,895 Social Security 1,369 Health
Insurance 5,500 The amount in the Council budget
for Training & Conferences originally totaled $16,000 and is currently
budgeted at $5,000. It has been minimally used and usually to
pay for conference registration fees. This line should be reduced
by $4,000, leaving $1,000. Training
& Conferences 4,000 Longevity Payments:
Longevity payments are made to city workers based on years of services.
Current payments for non-union employees are paid at the following rates:
5-9 years, $550; 10-14 years, $700; 15-19 years, $850; 20+ years, $1,000.
Longevity payments recognize long tenured employees and encourage stability
in the workforce. Under current policy these payments are also
provided to elected officials and should be eliminated. The savings
would exceed $9,350 in 2009. Eliminate
Longevity Payments 9,350 Medicare Part B:
The city pays Medicare Part B premiums for retirees on Medicare, the
current budget assumes an increase over last year’s rate. The
Social Security Administration has since announced that premiums will
not be increased, this represents an expenditure reduction of $70,000. Medicare
Refunds 70,000 Postal Expenses:
The Common Council has reduced its use of postage by approximately 60
percent through greater use of electronic mail. Similar savings
can be achieved in portions of the city’s overall postage budget through
the following steps:
Postal
Efficiencies TBD As an example of an area of
potential savings, below is a random listing of Civil Service Commission
mailings between 2/28/08 and 11/13/08. In several instances, the
postal rate paid per mailing was in excess of the rate available.
In some cases savings could have ranged from 58% to 64% per mailing.
Had notices of civil service exams been mailed by post cards indicating
the availability of the information on the city website, savings could
have been as high as 73% per mailing. Date Sent Postage Pd. Avail. Savings
% PC Rate Savings % 2/28/08 0.97 .41 58% .26 3/11/08 0.97 .41 58% .26 3/17/08 0.41 .41 -- .26 37% 4/18/08 0.41 .41 -- .26 37% 6/17/08 0.42 .42 -- .27 36% 7/10/08 1.00 .42 58% .27 8/4/08 0.42 .42 -- .27 36% 8/7/08 0.42 .42 -- .27 36% 8/27/08 0.42 .42 -- .27 36% 9/15/08 0.42 .42 -- .27 36% 9/17/08 0.42 .42 -- .27 36% 9/26/08 0.42 .42 -- .27 36% 9/26/08 1.17 .42 64% .27 10/1/08 1.00 .42 58% .27 10/7/08 1.17 .42 64% .27 10/24/08 1.00 .42 58% .27 11/13/08 0.42 .42 -- .27 Special Events:
Special events add to the quality of the City’s cultural life, and
while the cost of City sponsored events are largely covered by sponsorships
and vendor fees, there are areas of potential savings. The Department
of General Services indicated that it incurred $49,000 in expenses for
68 non-city sponsored events that were not billed back. We need
to recover costs expended by city agencies. In addition we need
to assess the location of events so as to minimize the use of city resources
in managing them. For example use of Riverfront Park is a more
manageable location for events that may consume public safety and traffic
personnel vs. Washington Park where greater resources are required. Gasoline Expenses:
Current projections for gasoline expenditures were made when prices
were at a market peak. The amount budgeted for gasoline in the
proposed budget is $1.7 million, a $400,000 increase over the 2008 budget.
While it may be unclear how long this decline in prices will continue,
declining consumption is also likely to keep pressure on lower prices.
It is reasonable to reexamine the amount allocated for gasoline and
to take a savings off the proposed amount. Reduced
gasoline Prices $150,000-200,000 Capital Budget:
Growth in the capital budget should be an additional area of concern.
NYS Comptroller DiNapoli recently issued a Research Brief “The
Credit Crunch: Implications for Local Government Short-Term Debt”
(Attachment B). The Comptroller warns that “the current global
financial market crisis could have serious implications for New York’s
local governments if access to credit markets remains constrained.”
We need to re-examine our capital budget, in particular the significant
increase in street reconstruction expenditures. No one questions
the need, we need to be cognizant of our financial situation however. Parking Fine Collections:
I am concerned that projected collections for 2008 as of 10/27/08 are
at $1.691 million toward an adjusted target of $2.3 million (the original
2008 budgeted target was $2.65 million). We should consider contracting
with an outside vendor for collection services. Any such contract
needs to include a performance clause in order to motivate, monitor
and evaluate contractor performance. Other municipalities have
used this approach; a well designed contract should be attempted. Miscellaneous:
Additional savings in miscellaneous areas could probably be found if
there was time to do a careful line by line review of discretionary
spending. An across the board efficiency cut in discretionary
items should be considered as a way to generate additional savings and
encourage management efficiencies. Areas for Longer Term
Review As I said earlier, this budget
must be treated as a bridge to long term fiscal stability and addressing
our financial challenges. As we move forward, we must understand
that our financial situation continues to be pressured. For example,
19-A PILOT payments currently pegged at $22,850,000 decline to $15,000,000
beginning in 2011 (see Attachment C); and declines in city population
in the 2010 census will impact our share of county sales tax revenue
beginning in 2011. We also cannot plan on any significant growth
in state aid in the coming years; indeed, we must work to safeguard
what we have. We must also be concerned about
the future of the landfill, which CANNOT be viewed as a source of ongoing
operating revenue to support city services. However, an expansion
of current capacity needs to be a part of the bridge to long term restructuring. To that end, we must begin
to look at longer term restructuring. The use of targeted management
audits of certain departments is one way to look for efficiencies, but
we should not solely rely on that, we also need to point to areas for
review. Some areas to consider: EMS Response:
We need to re-examine the level of response we provide to EMS calls. We should assure that our dispatchers are
properly trained in priority dispatch. More importantly, we should vary
the response relative to the dispatch so that we are not needlessly
sending ladder trucks, pumpers et al in particular, for low priority
calls where an ambulance response would be appropriate. ROP Inspections:
We should re-examine the use of firefighters to conduct ROP inspections.
The current system is expensive in terms of personnel use and firefighter
apparatus that is needed when firefighters are on call, and difficult
to administer in terms of scheduling appointments and follow-up.
A dedicated corp of trained inspectors could more efficiently handle
the system than is currently the case. Health Insurance Contributions:
We need to re-examine the policy of non-contributory health insurance
for public safety personnel after six years of service. Clearly
this is a collective bargaining issue and has to be mutually agreed
to; however, we can no longer afford that benefit if we are to contain
costs and still maintain an adequate public safety system. Payroll Processing:
We should examine moving to a biweekly payroll system which is common
in other units of government; we should also consider contracting out
payroll processing and management to a professional firm for additional
expenditure reductions. Government Restructuring:
Efficient operation of government also produces savings and economies.
The impending restructuring of the Comptroller’s office and the Treasurer’s
office is a mistake, we should reexamine that, however that is a longer
term restructuring that requires a charter change. We also need to re-examine
the effectiveness of city budget management capabilities. It is
incongruous that a city with the budget our size has a budget director
without staff. That has implications on budget development
and management. We also need to make better
use of the City’s website as a management tool and a repository of
information available to the public that will in turn reduce the demand
on city personnel to fill public information requests. We need
a full-time webmaster charged with the development, maintenance and
consistency of the city website. We should examine the size
of all city boards and commissions to see where reductions or consolidations
can be made. The current Board of Zoning Appeals, for example,
is larger than that authorized by State law. In the same vein
we should begin the process of considering a reduction in the size of
the Common Council to a more optimal level such as nine members.
This would provide some savings (although a portion of any savings should
be reinvested into the new Council to provide additional resources)
but also a smaller Council would be more cohesive, efficient and a better
check on the Executive branch. The separately elected position
of Council President should be eliminated as it is an artifact left
over from an earlier time. Any change in this regard (the Council)
would occur after the 2010 census to take effect in 2014. Finally, there also needs to
be a consolidation and investment in information services and technology.
Current systems, and responsibility, should be housed in the Department
of Administrative Services. 19-A Payment Schedule State Fiscal Year Amount 2000-2001 $4,500,000 2001-2002 $4,500,000 2002-2003 $4,500,000 2003-2004 $9,850,000 2004-2005 $16,850,000 2005-2006 $22,850,000 2006-2007 $22,850,000 2007-2008 $22,850,000 2008-2009 $22,850,000 Albany 2008 payment 2009-2010 $22,850,000 Albany 2009 payment 2010-2011 $22,850,000 Albany 2010 payment 2011-2012 $15,000,000 Albany 2011 payment 2012-2013 $15,000,000 2013-2014 $15,000,000 2014-2015 $15,000,000 2015-2016 $15,000,000 2016-2017 $15,000,000 2017-2018 $15,000,000 2018-2019 $15,000,000 2019-2020 $15,000,000 2020-2021 $15,000,000 2021-2022 $15,000,000 2022-2023 $15,000,000 2023-2024 $15,000,000 2024-2025 $15,000,000 2025-2026 $15,000,000 2026-2027 $15,000,000 2027-2028 $15,000,000 2028-2029 $15,000,000 2029-2030 $15,000,000 2030-2031 $15,000,000 2031-2032 $15,000,000 2032-2033 $15,000,000 |