PLATTSBURGH — The City of Plattsburgh has closed out the Fiscal Year 2022 (FY22) with a surplus of $205k surplus, bringing the fund balance to nearly $6.2m.
FUND BALANCE POLICY
According to a press release, the city's current fund balance policy requires the city to carry a general fund of 10% of annual expenses.
Under the current policy, a majority of the Common Council must approve general fund spending if that balance falls below 5% of annual expenses. There are also provisions for a one-time spending measure for surplus above the 10% threshold.
The $6.2m general fund balance represents 24.2% of annual expenses.
“Every municipality needs to justify what may seem like hoarding taxpayer contributed funds. Whether that justification is saving for a rainy day, creating reserves to offset future expenses, or to pay down larger than normal projects - all things our City is in need of,” says City of Plattsburgh Mayor, Christopher Rosenquest. “The biggest complaint I’ve heard from City residents regarding the combined City, School, and County tax rate is what they get in exchange. Beyond the regular city services, this question is more than fair and something we try to address through the infrastructure investments and citywide improvements we’ve been making over the last couple of years.”
City property owners pay a combined 2023 tax rate of $37.90 per $1000 of assessed property value. This combined rate consists of the Plattsburgh City School rate of $22.15, City of Plattsburgh rate of $10.86, and the Clinton County rate of $4.89.
As part of the normal business of managing the City finances, the City Chamberlain makes year-end accounting adjustments based on encumbrances, outstanding purchase orders, project closeouts, and other expected expenses based on operational adjustments. These year-end adjustments and closing of the fiscal year are subject to financial audit which is currently in-progress and nearly complete.
“During FY21 we inherited a number of unexpected expenses such as deferred maintenance on facilities, $1m in retroactive payroll expenses associated with lapsed union contracts, and a series of emergency repairs,” Rosenquest outlines. “Even with those unplanned expenditures we were able to manage stabilizing our City’s finances and added $1.2m back to the general fund; closing the FY21 books with a 22% fund balance. In turn a balanced 2022 budget was delivered which is now resulting in a modest .85% additional surplus.”
The Mayor’s 2022 budget proposal to Council delivered a balanced budget and maintained a tax rate of $11.37. The Mayoral budget for fiscal year 2023 was delivered to the Common Council and outlined a balanced budget combined with a $.51 reduction of the tax rate; from $11.37 down to $10.86 per $1000 of assessed value.
“There’s simply no getting away from increased property assessments. As City and regional housing becomes more and more in demand and as we have more people moving into the City, home values will increase. This is simple supply and demand economics,” explains Rosenquest. “This year we wanted to ensure commercial properties were also included in the reassessment. Furthermore, the City wants to be careful that assessed values aren’t falsely inflated or deflated, and are in-line with actual values due to movement in our City’s housing market.
According to MuniStat, the City’s Bond Counsel and representative agent to Moody’s, the City’s total annual debt service totals $2.1m and is categorized as “rapid amortized debt.” Rapid amortized debt is defined when 65% of a municipality's bonds will be redeemed within 10 years. All of the City's currently outstanding bonds will be paid within seven years or by 2030. “Aggressively paying down debt is not always needed or necessary,” notes Rosenquest. “When the lifespan of a capital improvement is 20 years, there's no real justification for paying it down sooner than the lifecycle of the item itself. But in all fairness, there are pros and cons to both approaches.”
According to Rating Agency and Industry Debt Metrics, a municipality’s percentage of debt service payments to annual expenditures between 0% and 8% is considered “Very Strong.” The City carries 7.78% of its annual expenditures as debt service and falls within this Very Strong category.
“Over the last two years not only have we been able to catch-up on the many inherited high-ticket expenses but we’ve also been able to stabilize our financial position, improve our Moody’s bond rating, add more money to the general fund, and lower the tax rate,” Rosenquest outlines. “This message should be heard loud and clear: the City is in great financial shape, our debt and spending is well within our means, and our responsibility should be focused on continuing to invest in our future.”
In addition to the number of infrastructure and quality of life improvement projects associated with the DRI, the City has undertaken a number of major infrastructure projects over the last couple of years since Rosenquest took office in 2021. Between the Lake Country Village emergency water system replacement to the Margaret Street Redevelopment, the City has invested in much needed infrastructure improvements as well as looked to improve many of the 22 parks, green spaces, and trails throughout the Lake City.
“Residents who’ve adopted the mantra ‘take care of what we have’, I cannot stress enough that’s exactly what we’re doing when we invest in these improvement projects. Investments in our parks, infrastructure, business district, beach, and trails is exactly what we’ve been demanding for years. And that’s exactly what we’re delivering,” adds Rosenquest. “Not only are we making these transformational improvements, but the changes we’re making are driven by integrating community feedback and ideas. Surveys, public meetings, stakeholder engagement opportunities are how we’ve developed many of the ideas for what our community members need and want. We’re listening and integrating these ideas. THIS is the new norm.”
The City has a number of infrastructure improvement projects planned for the next several years which will continue the momentum for these much needed changes. Those interested in following and contributing to these projects are encouraged to join the conversation at my.cityofplattsburgh-ny.gov.