OLEAN
Auditor says city should expect changes to budget
OLEAN — City Auditor Janet Jones warned Tuesday to expect changes from preliminary drafts of the city’s 2009-10 budget because of uncertainties in state budget negotiations.
In its preliminary form, the city’s General Fund appropriations are projected at $15.6 million. Appropriations are supported by a projected $6.9 million in real property taxes, which is an increase of 8.4 percent. The preliminary plan would also mean a 9.7 percent increase in the tax rate. Appropriations in the current 2008-09 General Fund budget total $14.9 million.
The preliminary plan was presented to the Common Council by Jones and several department heads in a Tuesday night work session. Anticipated budget figures for the separate water and sewer funds will soon be presented to the Council and are the only parts of the budget that haven’t been discussed.
Mayor David Carucci said he will not unveil his final proposal early but present it by the Feb. 15 deadline. The Council then has until April 15 to revise and vote on the plan.
“The biggest issue is Aid Incentives to Municipalities financing” from the state, said Jones, who in her draft removed $306,530, or 13 percent, from the governor’s projections to keep Olean’s AIM level at $2.3 million.
“I hope the state budget will pass first [before the city’s] so we will have a more concrete number,” Jones said.
She told the Council that the other big budgetary issue is the Contingency Fund. She proposed continuing with planned increases each year until it reaches 5 percent of the overall budget. She said she has proposed setting aside $498,690 for 2009-10, which is 3.5 percent (2.9 percent was set aside in 2008-09).
She also reminded the Council that, in an audit, the state comptroller requested a contingency fund of $1 million and that the city had promised to steadily increase the amount at this rate to achieve 4.3 percent in 2010-11 and 5 percent in 2011-12.
Several of the Council members protested, including Linda Edstrom (Ward 4) who described the proposed figure as “scary” and Rick Smith (Ward 6), who suggested lowering the amount because the city is improving its financial position.
“Some of the [Council] members that are sitting before me now were sitting on those Councils [that did not adopt fiscally sound budgets], and you should learn from your mistakes,” said Jones, who pointed to a list of the city’s unsolved problems and the need for a larger cushion because of unsettled firefighter contract negotiations, the city’s failing infrastructure and equipment, several liabilities and the lack of a fund balance.
“We are in the position we are in because of actions like that,” Jones said.
Carucci said after the meeting that the budget contains about $100,000 in capital projects that have not been formally approved by the Council and are not likely to survive a bond resolution. He suggested the city should commit to making improvements to the Bartlett House or putting it up for sale.
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