The New York State Comptroller is out with an audit that shows the city of Troy's finances are in dire straits, thanks to poor budgeting, the overuse of rainy day funds to fund day-to-day operations, and insufficient funding for capital costs.
The comptroller is optimistic about new Mayor Patrick Madden's approach to remedying the situation.
Comptroller Thomas DiNapoli characterized Troy's operating deficits as "chronic," his audit revealing that the balance in the city’s water fund has decreased by more than $6.1 million, or 67 percent, over the last three fiscal years because officials made repeated transfers to the general fund to subsidize the city’s operations. "Tapping too often into reserve funds using one-shot non-recurring revenue has really put the city's finances in a questionable condition."
The Collar City has been struggling with its finances for years, so the comptroller's findings came as no surprise to Mayor Madden, who took office in January. "There's nothing rally new in there. We had a draft of this audit report last month. We've had an opportunity to have conversation with the comptroller's office. We've had an opportunity to respond to the audit. I did that. My response is included in the audit report. I appreciate the work done by the comptroller. The thoroughness of their report. That gives me a good launching pad, if you will, from which to create some responses. I appreciate the fact that he recognizes our pro-active response to the financial condition in the city of Troy. I will not that some of the measures that he noted in the audit report have already been done, in fact, some were under way when the auditor was here last spring."
Madden, a Democrat, says he was looking for ways to plug the financial leaks and address the shortcomings on his first day in office. But then came the flood in mid-January, when the main water line burst in Lansingburgh. By that time, Madden had already held infrastructure talks with Congressman Paul Tonko, who visited Troy after the break, touring the site with Madden and vowing to provide federal assistance. "We have over 140-year-old infrastructure in this given congressional district. With pipe bursts we have lost millions of gallons of water. And so this is yet another example of a national problem that requires national solutions."
Tonko favors creation of a national plan to speak to America's drinking water infrastructure and sewer systems. He envisions a multi-billion dollar program linking the two into a massive national infrastructure investment.
Madden says he doesn't see any quick fixes going forward: "There are gonna be difficult decisions ahead for the residents and the city of Troy and for myself and for the council, I'm very realistic in that regard. But I'm also very optimistic that working together with the council, with the residents, that we can get through this."
DiNapoli's audit uncovered other shortcomings. It recommended the city hire an independent auditor to audit the city’s financial statements in a timely manner and verify that the financial statements can be relied on to report the city’s complete financial position. "Fortunately, the new mayor and the city council leadership has indicated a willingness to work together to address the issues that we've raised in our audit. Certainly the city needs to embark on a smart strategy of long-term financial planning to turn around the budget picture."
City Council leader Carmella Mantello says the taxpayers of Troy deserve honest, realistic, and reasonable budgeting practices. "We're actually in the midst of hiring a professional outside independent auditor in the immediate future, which is going to work with the state council to develop a corrective action plan that is required by law. The corrective action plan will address the many issues the comptroller cites."
Among the comptroller's suggested remedies: Troy should adopt structurally balanced general, water and sewer fund budgets that include realistic estimates for revenues and expenditures based on historical data, while developing comprehensive financial and capital plans that will be frequently monitored and updated.
For a copy of the comptroller's audit and the Troy’s response, visit: http://www.osc.state.ny.us/localgov/audits/cities/2016/troy.pdf
For access to state and local government spending, public authority financial data and information on 50,000 state contracts, visit Open Book New York. The easy-to-use website was created by DiNapoli to promote openness in government and provide taxpayers with better access to the financial workings of government.
