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Saratoga Springs Finance Commissioner warns of tight budget: "We can't fund everything"

Saratoga Springs Commissioner of Finance Minita Sanghvi (WAMC file photo)
Lucas Willard
/
WAMC
Saratoga Springs Commissioner of Finance Minita Sanghvi (WAMC file photo)

The city of Saratoga Springs is facing a multimillion dollar shortfall as budget season approaches amid rising costs and stalling revenues.

City expenses are on the rise, and without new or bolstered revenue sources, Democratic Finance Commissioner Minita Sanghvi is preparing to come up between $4-5 million short.

Speaking at last week’s city council meeting, Sanghvi says costs like retirement and benefits are outpacing revenue sources.

“We don’t have the sales tax revenue or the property tax revenue even to pay for those $5 million extra. Even if I levied the full property tax again this year, and I’m not recommending we do. But if we did, it would still be about $400,000 and we would still have a $4 million hole that we have to fill,” said Sanghvi.

The previous capital budget included funding for a new $8.7 million fire station on the city’s eastern plateau as well as an upcoming $7.6 million upgrade to the Loughberry Lake Dam.

Sangvhi adds the city’s debts must be taken into consideration.

“Because interest rates were really low, we refinanced a whole bunch [the] of city’s bonds which saved us a lot of money and was very smart to do. But essentially what it also led to was that we’re not paying off any of our debts until 2033. So, we’re holding onto debt and then obviously we have to pay interest on that. And we have a reserve for bonded indebtedness but we are still going to see an increase of over $2 million in having to pay the city’s debt service,” said Sangvhi.

The city is also facing a number of legal woes including lawsuits from former employees claiming mistreatment and one filed in July stemming from a report by the state attorney general that found city police and former officials unconstitutionally targeted Black Lives Matter protesters in 2020 and 2021.

“Our liability insurance, we all know, that from 2023 to 2024 it almost doubled. It was $1.1 million, it went to $2.1 million and we are expecting another increase,” said Sanghvi.

City Republican Committee Chair Mike Brandi has brought two temporary restraining orders against the city to block the payment of legal bills and has threatened to block a potential special election to fill the vacant Public Works commissioner seat.

Brandi, however, says his legal challenges have no impact on the city’s liability insurance.

“When I sue the city in these instances the insurance company is not paying for it. What the insurance company pays for is when the city has liability that’s subject to their policies. So, again, when Dillon Moran gets sued by his former employees for creating a hostile work environment the city’s insurance company is stepping in. So, it’s those lawsuits that will increase—show up on the city’s loss run and will increase their premium and potentially affect their insurability. The issues I’m bringing are procedural, it’s not different than an Article 7, someone contesting the assessment on their property,” said Brandi.

Other potential sources of revenue won’t fully kick in this year. A novel paid parking program set to run from Memorial Day to Labor Day was expected to generate roughly $1.6 million in revenue. The start of that program was delayed and final numbers from the summer have not been released.

Democratic Accounts Commissioner Dillon Moran says he expects significant revenues to come to the city from the two newly opened cannabis shops as well as the expected approval of a state bill that would allow local municipalities to collect sales and occupancy taxes from short-term rentals. But Moran says the city can’t count its chickens before they hatch.

“Let’s say the governor signs in December, which is our expectation, there’s a 120-day waiting period for it to be implemented and then people start registering. And so, at best, we could count on, I’m not even going to say half a year, I’m going to say about 40% of a conservative projection in terms of being able to actually capture that revenue and legally, ethically and legally count that towards our revenue for the budget. So, going into budget season, we see the money coming at us, but because it’s not a law yet, i.e. the short-term rental regulations, we can’t count that,” said Moran.

Sanghvi said she will unveil the comprehensive budget October 1st and warns:

“We can’t fund everything that we have been. There will be choices that have to be made and we as a city should, ideally, discuss that together," said Sanghvi.

The budget is due November 30th.