State Comptroller Lists Westchester, Yonkers and Others as Under ‘Moderate Fiscal Stress’
John Jordan | October 5, 2017
ALBANY—New York State Comptroller Thomas P. DiNapoli’s recently designated 27 municipalities across the state as fiscally stressed, including Westchester County and a number of municipalities in the Hudson Valley region.
The list released on Sept. 27th included eight counties, eight cities and 11 towns, but marks the fewest number of municipalities listed in stress since DiNapoli implemented his early-warning system in 2013. The good news for the region is that no Hudson Valley county or municipality made the Comptroller’s “Significant Fiscal Stress” list that included based on their 2016 financial information—Monroe and Broome counties and the City of Watervliet and Albany in the Capital District.
A total of 13 communities were listed in the second-highest category of “Moderate Fiscal Stress,” including Westchester County, as well as Erie, Franklin, Nassau and Suffolk counties. Among the Hudson Valley communities on the moderate fiscal stress list include: Yonkers, Poughkeepsie and Ellenville.
An additional 10 municipalities were listed as “Susceptible to Fiscal Stress,” including Pomona in Rockland County, Walden and Port Jervis in Orange County, Wurtsboro in Sullivan County and Saugerties in Ulster County.
“Although the number of local governments designated as fiscally stressed has declined noticeably, there are still too many communities struggling with chronic budget strain,” said DiNapoli. “Looking to the future, local officials should exercise fiscal caution through sensible spending decisions, realistic revenue projections and proper long-term planning.”
In a prepared statement, Jerry McKinstry, deputy communications director for Westchester County Executive Robert Astorino, stated in response to the critical report, “Westchester County has the highest credit rating of any county in New York State and finished last year with a $1 million surplus by keeping a close eye on its expenses. The fiscal stress that municipalities are feeling – and this applies universally across New York—is coming from Albany’s unfunded mandates.”
He continued, “Just last year, unfunded mandates—Albany’s bills that they push down on others to pay—consumed 75 cents out of every dollar spent in Westchester’s budget. That’s why County Executive Astorino has worked so hard to streamline government, cut costs, and find smart new ways to grow revenue without tax increases.”
The latest round of fiscal scores were based on 2016 financial information provided to DiNapoli’s office by local governments as of Aug. 31, 2017 and includes only municipalities with fiscal years ending on Dec. 31, 2016. In New York, all counties and towns, 44 cities and 10 villages have a calendar-based fiscal year – a total of 1,043 communities.
Also of local interest, the State Comptroller released on Oct. 4th a host of municipal audits, including reviews of six Industrial Development Agencies statewide. In that audit, the Comptroller found that the Orange County IDA Board of Directors “acted outside of its authority by agreeing to accept a grant and administering the grant funds in consideration for approving a payment in lieu of taxes agreement.”
Specifically, the State Comptroller’s audit cited a payment from the Millennium Pipeline Co. in connection with approvals it received from the IDA. Millennium received a PILOT abatement from the agency and agreed to provide $1,080,000 over a 10-year period to the agency for economic development in the county. The Board agreed to accept and administer the grant and used the funds to make a $108,000 short-term loan to a business.
“These actions are not within the Agency’s statutory authority. The Board updated the Agency by-laws on July 6, 2016. The revised by-laws no longer allow the Agency to administer grants,” Deputy State Comptroller Gabriel F. Deyo advised in a September letter to the IDA that also chronicled other issues of concern. Millennium Pipeline secured more than $3.4 million in sales tax abatements from the Orange County IDA in connection with its project on July 19, 2006.
The Orange County IDA responded during the audit that it was taking corrective actions to strengthen and enhance its procedures to address the issues raised in the report.
Earlier this year, another 70 municipalities and school districts were classified in some level of fiscal stress as of their non-calendar 2016 fiscal year end date.
DiNapoli’s monitoring system evaluates local governments on nine financial indicators and creates a fiscal stress score. Indicators assess fund balance, cash-on-hand and patterns of operating deficits. The system also evaluates information such as population trends, poverty and unemployment to help describe the environment in which these local governments operate. Each municipality receives a separate “environmental” score based on this assessment.
In an accompanying report that examines fiscal stress trends over the past four years, DiNapoli noted that 117 municipalities have been designated as fiscally stressed at least once during the period and 11 of those have been designated as stressed in each of the four years. Monroe County is the only municipality listed in “significant” stress each year.
Other findings in the report include:
• Eight local governments were newly classified as in stress in 2016 while 27 moved out of a stress category;
• Sixty-one entities have appeared on the fiscal stress list only once during the four-year period; and
• More than one-third of all municipalities in a fiscal stress category are located in the downstate regions of Long Island and the Mid-Hudson Valley.
The number of local governments that either failed to file their financial information in time to receive a stress score or that filed inconclusive data has increased each year from 122 in 2013 to 138 in 2016.
Editor, Real Estate In-Depth