LOCKPORT – With the City of Lockport’s personnel costs too high and its surplus too low, the State Comptroller’s Office included the city on a list of localities under “fiscal stress” Wednesday.
The immediate budgetary impact came with announcements at Wednesday’s Common Council work session that the city will no longer subsidize the Friday night summer concert series and may turn the city marina over to a private operator.
But more serious impacts may come with layoffs of city employees in the 2014 budget, whose adoption date will be delayed, Council President Anne E. McCaffrey said.
The Comptroller’s Office will be looking over the city’s shoulder as it prepares the new budget. “They’re going to be here for a while,” City Treasurer Michael E. White said.
“They have decided to come in an do an audit of our city for the next few weeks,” McCaffrey said. “They’ll come in and make some recommendations.”
The public hearing on the 2014 budget is being postponed from Oct. 9 to Oct. 23, and the Common Council’s vote on the spending plan has been put off from Oct. 16 to Oct. 30.
“The Comptroller’s Office is a big factor in this,” McCaffrey said. “They need to see our recommendations before we vote on a budget.”
Mayor Michael W. Tucker said that it’s not a control board and that the Comptroller’s Office “is not a binding body.”
“We’re on the moderately stressed list,” Tucker said. “I look at it as a red flag, a pause. We know what we have to do here to get where we want to be.”
Brian Butry, spokesman for the Comptroller’s Office, said of 1,043 cities, towns and counties studied statewide, only 38 have been found to be under any form of fiscal stress, as determined by a scoring system the Comptroller’s Office created to warn local officials and the public about looming financial woes.
Lockport is among five cities on the stress list out of 44 studied so far, Butry said. Niagara Falls earlier this year was placed on the “significant stress” list because its finances had been crippled by the cutoff of Seneca Niagara Casino revenue.
Tucker and the aldermen all vowed to avoid a property tax increase for 2014.
“Our goal in keeping the tax rate flat is we don’t want any more people to leave the city,” McCaffrey said.
Lockport’s population loss from slightly over 22,000 in 2000 to a shade over 20,000 in 2010 is one of the “environmental factors” contributing to the “moderately stressed” score, Butry said.
Another is Lockport’s child poverty rate of 29.9 percent, which rose 10.8 percentage points between the 2000 census and the 2010 count, and the fact that Lockport has reached 67 percent of its constitutional taxing limit.
The city’s budgetary results also are part of the reason for the state’s placement of Lockport on the watch list.
The city has run operating deficits three years in a row, with the red ink in 2010 nearly reaching $2 million. In 2011, the shortfall was close to $1.5 million, but in 2012, the deficit was shaved to $180,000.
Lockport’s remaining surplus at the end of 2012 was $155,380 on a $23 million general fund budget, which is the portion that includes property taxes. The fund balance was $1.5 million out of $31 million in spending when the water and sewer funds are included.
The city also was penalized on the state scoring scale for high costs of salaries and benefits.
Those combined personnel costs equaled nearly 80 percent of the city’s revenues last year and were about 81 percent in 2010 and 2011.
“We need to look at ways to save money on health care,” McCaffrey said. That cost is being estimated at $3.84 million for 2014 in budget documents obtained by The Buffalo News; that would be an increase of more than $400,000.
“They don’t mention pension costs,” Alderman Patrick W. Schrader, D-4th Ward, groused as he looked at the comptroller’s report. The city’s pension fund contributions are set by the Comptroller’s Office and are mandatory. General fund pension costs approached $3 million this year and are expected to rise – unless the city makes job cuts.
However, the city is not broke. It has 106 percent of the cash on hand it needs to pay its current bills, the state’s figures say.
It was also disclosed that the budget will not include money for the Labatt Canal Concert Series.
Tucker said he has informed promoter Kathy Paradowski that the city is terminating its arrangement with her, which included a city commitment of $8,800 per show for stage rental, as well as absorbing heavy police and fire overtime costs for security.
“I think the concerts have been a very good thing for our city,” Tucker said, “but it’s $125,000. We’re certainly not going to lay people off to have a party in the street. … The concert series as we know it is over.”
Tucker said he’s been talking to another potential promoter about a concert plan that would involve shows at no cost to the city.
As for the Nelson C. Goehle-Widewaters Marina on the Erie Canal, it’s a minor item; its costs were budgeted at less than $8,000 this year.
“It’s not meant to break even,” McCaffrey said as she suggested seeking proposals for a private operator.
Alderman Kenneth M. Genewick said, “I think it’s important to have a working marina, because it brings people to our city.”