State Audit Highly Critical Poughkeepsie’s Budgeting
POUGHKEEPSIE – An audit of the City of Poughkeepsie’s books by the state comptroller’s office has found that inaccurate budgeting has created an $11 million general fund deficit. The report also found the city’s debt burden has increased 45 percent over the last five years.
In 2010 and 2011, state auditors found city officials over-estimated revenues by $3.2 million and under-estimated appropriations by $4.7 million. That includes over-estimating payments in lieu of taxes by $381,000, rental payments by $305,000, and interest earnings by $426,000; as well as over-expending budget line items for health insurance by $944,000, accumulated sick pay and vacation pay by $750,000, and worker compensation by $415,500.
Mayor John Tkazyik said he disputes some of the state’s findings, noting fiscal problems extend beyond the local level.
“We concur that communities across New York are dealing with increased fiscal stress; problems are caused by the unfunded mandates imposed on the city by the State of New York as in the skyrocketing pensions costs, healthcare costs, coupled with the reduction in state aid on top of the recession,” Tkazyik said. “The anti-business climate here in New York, despite reform, has compounded problems here at the local level.”
The state examiners said by failing to base their budgets on actual revenues and each prior year’s actual expenditures, the city’s general fund balance was depleted by $8 million in 2010 and 2011, and by a total of nearly $13 million from 2007 to 2011.
Tkazyik said the city has reduced its long-term debt from $77 million to $53 million at the end of 2011. Short-term debt was reduced from $25 million in 2009 to the current $9 million, he said.
The audit also found that debt as a percentage of revenue, at 12.9 percent, is ranked 11th highest among cities in New York State; the city’s total debt of $69.7 million represents $2,129 of debt per capita; long-term debt payments cost the city some $8.5 million per year; and that the city receives almost $130 of state revenue sharing and per capita, compared to $147 for the median city in New York.
Recommendations from the comptroller include requiring the mayor to prepare realistic budgets on actual results; authorizing all interfund loans prior to transfers occurring and ensuring all interfund loans are repaid by the end of each fiscal year; requiring the mayor and city commissioner of finance to prepare periodic reports that would help assess the city’s fiscal condition; adopting financial policies pertaining to fund balance and interfund transfers; and requiring the city commissioner of finance to provide timely audited financial statements.
The city’s common council is required to prepare a plan of action that address’s the recommendations within 90 days.