On Monday, Albany Mayor Kathy Sheehan took the wraps off her 2017 budget, a $176 million spending plan that boasts a 2 percent decrease in spending from last year, which the mayor touts as the largest annual spending decrease in more than 15 years. The Common Council is now taking a closer look.
The mayor delivered an optimistic budget presentation. Her plan features no new fees or fines; however, the unpopular "trash fee" remains. The proposal will lower taxes but the city's ongoing property revaluation could offset any savings.
There's no mention of red light camera revenue. Last year’s budget anticipated the cameras would rake in $1.9 million in fines. The program has fallen far short of that; officials now say the cameras were installed in the interests of citizen safety, not as a source of income for city coffers.
The city is also once again looking up the hill to the state capitol for $12.5 million in state aid, critical to balance the budget. "We feel very confident that we can support, and that the state will support, our 12 and a half million dollar ask, and we have been very adamant that this cannot be a spin-up. In fact, we will be looking for a three-year bridge in the New York State 2017-2018 budget so that we can have some certainty and we can provide clarity and a path forward for our budget, as we plan into the future."
Council President Carolyn McLaughin weighs in. "I appreciate the fact that we're asking for it not to be a spin-up this time, but ultimately it's left up to the governor's office and how they're gonna give us that. Are we gonna pay now or pay later?"
Sheehan admits it's the usual "touch and go" as to whether the city will receive the funds and in what form, but she's counting on it anyway. "We remain open to any number of ways of delivering aid to the city from the standpoint of the Capital City Funding. One of the things that we looked at was a model, and I'm gonna forget which Capital City it is, but there's another Capital City that has similar Capital City funding. We've looked at delivering it through the Harriman Campus. We're open to looking at the AIM formula. So we remain open to any number of ways. Last year we suggested that it happen through 19A because of the unique situation that we have with the high percentage of state-owned properties. That differentiates us from other cities, and again, this isn't looking for something that other cities don't have. We're really looking for the opportunity to have something closer to what they receive per capita in aid for the city of Albany so that we can bridge the gap."
City Treasurer Darius Shahinfar believes the budget is solid. "It shows that we still have a revenue gap and a revenue problem and that leads directly to a lack of state aid from the state. The mayor laid out that case for us very eloquently, has been doing so for several years now with the state, and I think she's making some serious headway up the hill to get the state to understand that this is a structural problem that is caused by the lack of state aid."
The next stop for the budget proposal is the Common Council. 10th ward councilwoman Leah Golby says the panel will get a budget overview presentation by Budget Director Rachel McEneny Thursday evening... "...where we'll get kind of a very high-level presentation on what's included in the budget, essentially going over what Mayor Sheehan did review yesterday, and also answering any questions that we have, and that really takes off the council's review of the 2017 proposed budget. Then we will go into finance committee, we'll start meetings with every department, every department head will come in, they'll present their budget to us, they will answer our questions, there's back and forth, council members along the way always have several questions, some of which wind up going back to the administration, which the finance chair has said she will carry that process forward, making sure that anyone that asks one question is asked by a council member, all council members will get the answer. So I think it will be a very open and transparent process of reviewing the budget."
Golby adds there will be public hearings and opportunities for public comment. Over the next two months, the council will review the package and hold meetings on it, with approval due by the end of November.
- Mayor Sheehan's Budget Letter to Common Council & Residents
Dear Common Council Members and Residents of the City of Albany:
Our City continues to build the bridge to a sustainable and fiscally responsible future. As a result of our commitment to sound financial management, my 2017 budget decreases spending and more pragmatically forecasts revenues to deliver a lean and balanced budget.
My administration continues to focus on developing cost-saving measures through enhanced technology, attrition, shared services, and reasonable and achievable reductions to non-personnel services and supplies. These reductions in expenses are coupled with the advocacy of well-deserved relief from the State of New York. The preliminary feedback we received from a New York State-facilitated review of our City’s finances recognized the gap between what it costs to provide services for our residents and stakeholders, and the revenue currently available to pay for those services.
Over the past three years, we have worked assiduously to bridge that gap. My 2015 and 2016 budgets grew at less than the 2% benchmark set by Governor Cuomo for his State budget. My 2017 budget includes a 2% decrease in expenditures from last year; the largest, and only the third, annual expenditure decrease in more than 15 years.
Technology Investments Lead to Additional Efficiencies
In 2016, the City implemented a new Enterprise Resource Planning (ERP) system, which allows departments to more quickly and accurately access critical financial information. The new ERP system facilitates direct communication between departments and administrative services, and allows for real time, comprehensive monitoring of revenue and expenses. We also fully launched an electronic timekeeping system, replacing paper timesheets and inefficient payroll practices. This 2017 budget was built by our Budget Office in the new ERP system, and broadened the efficiencies and savings that were not attainable under the antiquated system.
Reorganization of the Department of Administrative Services
We continue to provide excellent services to our community while striving to increase efficiencies and use our limited resources wisely. This year’s budget includes a reorganization of central administration. Our City Charter includes the position of Commissioner of Administrative Services, but no such office has existed for many years. With our new investment in technology, it is time to create this office and reap the benefits of the internal efficiencies it will yield.
The Department of Administrative Services will be responsible for overseeing the evaluation and evolution of City-wide processes, resulting in efficiencies, cost savings, and the ability to offer enhanced services. The department will assist me and all departments to create responsible operating and capital budgets, monitor City-wide expenditures and revenues, and establish and set more robust internal control systems.
Decrease in Expenses
A 2% spending decrease in the 2017 budget exemplifies my administration’s dedication to building the bridge to a fiscally sustainable City. Through aggressive and smart cost-savings and efficiencies, this rightsizing was accomplished using historical trend data, all while avoiding a reduction in existing personnel.
Increased Tax Base
I know property taxes are a primary concern to our residents and businesses. I have often repeated the mantra that the only way to address this issue is to reduce our expenses and grow our tax base. I’m pleased this budget reflects both of these principles. Our tax base has expanded, growing by 2.06%. We have also increased revenue through voluntary Payments In Lieu of Taxes (PILOTs). The expansion of our tax base allows us to increase our tax levy by $1.17 million, while also slightly reducing our tax rate for both residents and businesses.
Cost-Effective Department of General Services
An efficient government does not mean a reduction in important City services. In anticipation of the closure of the landfill in 2021, the Department of General Services (DGS) is taking several steps to ensure we have a cost-effective, reliable option for waste collection and disposal into the future. In August 2016, the City launched a pilot automated recycling program for approximately 2,000 homes within the City. We anticipate this program will be expanded and show immediate and future efficiencies and savings in workers’ compensation costs. In 2017, the department will plan for a 2018 launch of a cart system waste collection program using an automated or semi-automated approach. I remain committed to minimizing the financial impact to our City and our residents of the pending closure of the landfill.
Investment in Our Community/Commitment to Equity
This budget is a demonstration of our continued dedication to the Youth and Workforce Services program, which during 2016 provided more than 1,000 young people, ages 14 through 18, with an introduction to the workforce, and helped them to identify career interests and attain positive work skills and habits. This innovative program won a U.S. Conference of Mayors 2016 City Livability Award. Another community investment is in the deeper engagement between our Police Department and our neighborhoods. Our nationally recognized Albany Police Department will continue to enrich their services to the residents and visitors of Albany with a new police academy and body-worn camera program. This budget also provides an investment in language access so that we can be more responsive to our growing, diverse population.
Capital City Payment
The City of Albany has requested $12.5 million in “Capital City Funding” be included in the New York State Budget for fiscal year 2017-2018. This request is different than the “Capital City Funding” realized last year, as the City continues to work with the State to acquire additional state funding, as opposed to a “spin up” of future state funding.
As in years past, we continue to believe our case for this additional funding is distinctive, compelling, and indisputable. More than 63% of the value of all property in the City is exempt from taxation based on the 2016 assessment roll, with State-owned property totaling more than 60% of that value.
Over the last three years, my administration has carried through on my inauguration pledge to serve the residents of Albany by ensuring responsive City government, improving our neighborhoods, implementing effective economic development initiatives, and fostering sound financial management. This budget is a direct reflection of that pledge at work.
I look forward to working with the Common Council and the residents of the City of Albany to approve this budget, and to continue building the bridge toward a more efficient, secure, and self-sustaining financial future for the City of Albany.
Kathy M. Sheehan
Mayor, City of Albany