Saratoga Springs is facing a somewhat unique plight. The city’s fund balance has grown to the point of $1.55 million over the maximum amount planners figure should be on hand.
To figure out just where the money will be spent, Commissioner of Finance Michele Madigan has been prioritizing the city’s needs.
An internal city policy dictates that the unassigned fund balance should be between 10 and 12.5 percent of the budget. The unassigned fund balance stands at about $6.2 million, an increase of about $2 million over 2010. That reflects a 2011 operating surplus of $3.5 million, of which $1.55 million was restricted or assigned. The $1.55 million figure will need to be audited before any spending plans can be finalized.
Adherence to the fund balance policy was a major factor in Standard & Poor’s Rating Service’s recent decision to upgrade the city’s bond rating from AA to AA+. The upgrade also gave the city a “stable outlook” and a financial management practice assessment of “good,” revised from “stable.”
In this economy, Saratoga Springs has plenty of options when it comes to spending the money.
“The money can be placed in a reserve and not spent until it is needed. I will mostly likely make a recommendation that much of these funds go toward a retirement reserve. Some funds could be invested for the taxpayers in capital improvement projects for fire and police, this will also help stabilize the tax rate instead of borrowing later by going to bond,” Madigan said.
She also mentioned needs related to `city safety issues` encompassing fire and police services, especially in the downtown area. Police enforcement there, especially as it relates to nightlife, has become a hot topic as of late. Some have called for increased policing or the installation of security cameras.
“In the last several budget seasons, critical city resources have been slashed while the fund balance has been increasing. My goal is to retain a fund balance sufficient to meet our unexpected and other needs, while ensuring the integrity of our essential city services,” said Madigan.
Mayor Scott Johnson has a couple of ideas of where he’d like to have the money go.
“I’d like to see the bulk of the fund put in to the tax stabilization reserve that was established with VLT (Video Lottery Terminal) money,” he said. The VLT was reinstated in mid 2011 with $1.5 million to the city.
Johnson feels that putting the money into future retirement is “not consistent” with city policies and he would like to see the rest of the fund be put toward capital projects.
“I’d rather see it put to capital projects like the new parking garage that are known for this year and are a one-time cost. This would reduce the overall tax burden by lessening the amount the city would bond for that project,” he said.
Johnson also said the city should be credited with coming out with a surplus, especially while “making tough decisions in a bad economy”.
Madigan is looking at all of the priorities in conjunction with members of the Public Safety and Public Works departments. As of Friday, April 27, she expected to approach City Council members individually to get an idea of what each department is in need of. She anticipates addressing the council as a whole later this month at a regularly scheduled council meeting to present her spending recommendations.
Police Chief Christopher Cole was not available for comment.
