DiNapoli: Colonie Addressing Financial
Challenges
The Town of Colonie
has improved its finances significantly in recent years due
to stronger budget planning as it deals with fiscal stress,
according to a
report issued today by State Comptroller Thomas P.
DiNapoli. The report is part of a series of fiscal profiles
on municipalities across the state.
“Despite its strong tax base, Colonie has struggled
financially over the past decade but is now showing signs of
improvement,” said DiNapoli. “Supervisor Mahan is aware of
the challenges facing her town and has made difficult, but
necessary financial decisions to align spending with
revenues and eliminate budget deficits. Careful budget
planning and an honest conversation about the numbers will
continue to be vital to turning around the town’s finances.”
“We are in the sixth year of our ten-year financial plan
and the results indicate that we are in a much stronger
financial position than we were in 2008 and we continue to
build our reserve funds,” said Town of Colonie Supervisor
Paula Mahan. “I commend Comptroller DiNapoli’s efforts to
take a proactive approach to provide resources to
municipalities in fiscal stress. My administration will
continue to work with the Comptroller to stay on the right
path and maintain our conservative financial approach.”
The town’s financial challenges were highlighted by
DiNapoli’s office in separate audits in
2008 and
2012.
Most of the findings from the 2008 audit have been
addressed by the current administration. Notably, the town
has tackled significant budget deficits by implementing tax
increases and arranging to have the town’s landfill run by a
private company.
At the end of the 2008 fiscal year, the town’s General
Fund and Landfill Fund had deficits that totaled $29.3
million and $7.6 million. At the close of the 2012 fiscal
year, the town’s General Fund deficit had been reduced to
only $245,000, with total fund equity of more than $500,000.
The Landfill Fund deficit, meanwhile, was effectively
eliminated when the town turned operation of the landfill
over to a private waste management company.
In addition, the town has indicated it would implement
many of the recommendations from the 2012 audit as part of
its ten-year financial plan. This includes addressing the
use of short-term borrowing to cover annual operating
expenses. The Comptroller’s fiscal stress monitoring system
highlighted this issue when it identified Colonie as one of
six communities in “significant fiscal stress.” The town,
however, has reduced its reliance on short-term borrowing
from a high of $11 million in 2006 to $2.5 million in 2012.
The Comptroller’s fiscal profile noted a number of
positive demographic and environmental factors that are
working in the town’s favor.
For example, the town’s median household income of
$70,367 is substantially higher than the median of $52,047
for towns statewide. Colonie’s unemployment rate was 6.7
percent in 2012, 1.8 percentage points lower than the
statewide rate of 8.5 percent in 2012.
DiNapoli’s report also highlighted:
- Colonie’s revenue grew 3.6 percent on average
annually from 2002 through 2012, equal to the growth for
all New York towns during the same time frame;
- Town expenditures increased 3.2 percent on average
annually during the decade, compared to a growth rate of
3.9 percent for all towns;
- Colonie’s population grew by 18 percent in the past
30 years, reaching 81,591 by 2010;
- Less than 10 percent of children in the town were
living in poverty in 2011, compared to the median town
poverty rate for children of 13.3 percent; and
The median home value in Colonie is $217,700,
compared to the median town's value of $117,550.
DiNapoli has issued
nearly a dozen profiles on municipalities across the
state. As part of this effort, DiNapoli will also release
in-depth reports on some of the issues that contribute to
the financial pressures on local governments.
Earlier this year, DiNapoli also implemented an early
warning monitoring system that gives local communities a
fiscal stress score. Under his Fiscal Stress Monitoring
System, DiNapoli identified 24 counties, cities and towns
with fiscal years that coincide with the calendar year that
are in fiscal stress. DiNapoli will issue additional fiscal
stress updates for other local governments with different
fiscal years on an ongoing basis.
DiNapoli’s system evaluates local governments on nine
financial indicators and creates an overall fiscal condition
score. Indicators include fund balance, cash-on-hand and
patterns of operating deficits. The scores are used to
classify a local community as being in “significant fiscal
stress,” “moderate fiscal stress,” “susceptible to fiscal
stress” and “no designation.” The system also evaluates
communities relative to 14 environmental stress factors such
as population trends, poverty rates and property values.
For a copy of the Colonie fiscal profile visit:
http://www.osc.state.ny.us/localgov/pubs/fiscalprofiles/colonie.pdf
For copies of Comptroller DiNapoli’s 2008 and 2012 audits
of Colonie visit:
http://osc.state.ny.us/localgov/audits/towns/2008/colonie.pdf
http://www.osc.state.ny.us/localgov/audits/towns/2012/colonie.pdf
For more detailed information about Comptroller
DiNapoli’s fiscal stress monitoring system and to view
reports related to local government fiscal stress visit:
http://www.osc.state.ny.us/localgov/fiscalmonitoring/index.htm
For access to state and local government spending and
more than 60,000 state contracts, visit
http://www.openbooknewyork.com/. The easy-to-use website
was created by Comptroller DiNapoli to promote openness in
government and provide taxpayers with better access to the
financial workings of government.
Employer Pension Contribution Rates Announced
For Fiscal Year 2014-15Employer contribution rates for the
New York State and Local Retirement System will decline
slightly in Fiscal Year 2014-15, New York State Comptroller
Thomas P. DiNapoli announced today.
The average contribution rate for the Employee Retirement
System (ERS) will decrease by 0.8 percent of payroll, from
20.9 percent to 20.1 percent. The average contribution rate
for the Police and Fire Retirement System (PFRS) will
decrease by 1.3 percent of payroll, from 28.9 percent to
27.6 percent.
“The New York State Common Retirement Fund’s strong gains
over the last four years have mitigated some of the impact
of the financial market collapse of 2008-2009,”DiNapoli
said. “Strong investment performance, along with a revision
in actuarial smoothing, has lowered the employer
contribution rate for 2014-15.”
Employer rates are determined based on actuarial
assumptions recommended by the Retirement System’s actuary
and approved by DiNapoli. A copy of the actuary’s report can
be found
here.
The Retirement System’s actuary recommended a change
based on a recommendation from Buck Consultants, LLC, as
part of an independent actuarial review which is performed
every five years. The previous method separated assets into
equities and non-equities, while the new method expects the
entire fund to earn the assumed rate of return and smoothes
any unexpected gains or losses. According to Buck, the new
method is generally used by the majority of public pension
systems nationwide.
In 2012, DiNapoli directed the Retirement System to give
employers access to a full projection of their annual
pension bill by September 1, six weeks earlier than in
previous years. Employers use this projection for
preparation of their local budgets and calculation of tax
levies subject to the property tax cap effective for fiscal
years that begin in 2014.
Projections of required contributions will vary by
employer depending on factors such as retirement plans,
salaries and the distribution of their employees among the
six retirement tiers. The employer contribution rates
announced today will apply to each employer’s salary base
during the period of April 1, 2014 through March 31, 2015.
Payments based on those rates are due by February 1, 2015,
but may be pre-paid on December 15, 2014.
The property tax cap generally limits the amount a
government entity can increase its annual tax levy to two
percent or the rate of inflation, whichever is less. The
cost of pensions above a change in the average contribution
rate by more than two percentage points is excluded from the
tax cap. Since the ERS and PFRS rates have declined, there
will not be any exclusion for this period.
To see a chart of historical employer contribution rates,
click
here.