Troy Takes Steps To Plug Budget Hole
With the COVID-19 pandemic weighing on municipal finances, the City of Troy took steps Tuesday night to bridge the gap as federal aid to state and local governments remains tied up in Washington.
Troy is facing an estimated more-than-six-million-dollar budget gap.
On Tuesday night, the city council agreed to steps to close the budget hole. Vacant non-essential positions have been frozen; department expenditures have been cut by 10 percent. And short-term borrowing was approved with hopes that federal COVID-19 relief aid to municipalities would come through.
Troy Deputy Comptroller Andy Piotrowsi spoke during the finance committee and special city council meetings Tuesday, detailing an identified savings of just over $3 million.
“So between all the legislation tonight it creates a budgetary savings to the general fund of $3,012,919. $2.167 [million] from the budget transfers, and the unemployment reserve, and then the $845 [thousand] from the bond resolutions,” said Piotrowski.
Bond resolutions were brought forward for active capital projects in the city. The administration is seeking to free-up cash in the short term.
“In my perspective, the right decision is to put these items on bond resolutions with the full intention, if and when, federal aid is approved by Congress and received by the city, it will be directly used to pay off all principal and interest costs related to any bond resolution on this agenda. That’s the entire intent of doing this,” said Piotrowski.
Council President Carmella Mantello, a Republican, said her goal is to prevent layoffs, prevent cuts to essential services, and reduce the impact on city taxpayers.
“I mean, obviously, the goal is here to do everything humanly possible to get through this without putting the burden on the shoulders of our taxpayers and trying to keep our services intact. So that’s the goal. I think this package attempts to do that.”
The steps taken Tuesday represent two phases of Troy’s four-phase contingency plan to handle the anticipated loss to city revenues.
The next phase would be a revenue anticipation note – borrowing that could close the remaining gap to make the city whole.
Mayor Patrick Madden, a Democrat, acknowledges the borrowing approved Tuesday night is a risk, as the Senate has not yet decided on a stimulus relief bill that includes the direct aid to state and local governments that many are counting on.
Madden said if aid is not approved as the year goes on, Troy could be in a more dangerous financial situation. Moving into Phase Four, he says, would mean layoffs.
“If we get to that point, then this country is in trouble. Because we’re not the only ones. There will be thousands of districts across the country that will become insolvent by that point in the year if assistance is not forthcoming,” said Madden.