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August 22, 2019Cart

Business

by Fairfield County Business Journal
by FCBJ

Yonkers $1.5 billion budget includes layoffs, tax hike

tax hike and dozens of layoffs are part of a $1.15 billion budget unveiled by Yonkers Mayor Mike Spano.

Spano released his executive budget proposal for the 2019 fiscal year at a briefing for the City Council at Yonkers City Hall on April 13.

“The Fiscal Year 2019 Budget I present to you today proves to a challenging one,” Spano said. “One that is honest and lean while dealing with inherited structural problems, several years of zero increases in state aid, rising personnel and fringe costs and conforming to the state-mandated property tax cap.”

Under the budget, property taxes will increase 1.64 percent, amounting to an annual increase of $174 for a typical one-to-three family home at the median assessed value of $11,100.

The budget also proposes cuts to municipal services and the city’s workforce, including 182 positions across 18 departments. Most of those cuts will come in the form of layoffs, city officials said.

Cuts include 30 positions at the fire department, 73 positions with the police department, 49 at the public works department and 18 with the city’s parks department.

The budget also uses all of the entirety of the city’s fund balance and eliminates all vacant positions.

A PLAN TO RESTRUCTURE

As part of the budget, Yonkers is also asking for $5 million in aid from the state to restructure the city’s government.

Following a unanimous approval by the city council, the city will request state aid under the Financial Restructuring Board for Local Governments, which offers assistance to eligible municipalities.

The 10-member restructuring board is chaired by the budget director and includes the state comptroller, the attorney general, the secretary of state and six other members appointed by the governor.

Any municipality deemed eligible by the restructuring board may request a comprehensive review. The restructuring board would then make recommendations to that municipality on ways to improve its fiscal stability, management and the delivery of public services.

Spano had previously called on the state to increase the Aid and Incentives for Municipalities (AIM), an unrestricted state funding source provided to all of New York’s cities, towns and villages outside of New York City. That program was created to consolidate a number of local funding streams, curtail property tax increases and provide incentives to local governments to consolidate or share services.

For the upcoming fiscal year, the state pegged $714 million for the AIM program in the budget. According to budget archives, that figure has remained unchanged for seven straight years.

Spano has called the funding freeze a “slow strangulation of city governments.”

Under the AIM program, more than $134 million will be designated for cities, towns and villages in Westchester County. Yonkers, the most populous city in Westchester, receives the bulk of the county’s funding at roughly $108 million.

“The 2019 Executive Budget is one that was forecasted, and unfortunately, also has been ignored by New York state,” Spano said. “It is time New York state addresses its discrepancies in funding and the burden they have placed on our local property taxpayers.”

AUDIT CRITICAL OF CITY’S FINANCES

Officials from the state, meanwhile, have criticized the city’s government for its fiscal management.

In an audit released on the same day as Spano’s budget, the Office of the New York State Comptroller said both the Yonkers City Council and city officials “have not effectively monitored the city’s financial condition as we identified significant concerns.”

The audit, which focused on the city’s finances between 2014 to 2016, said the city failed to ensure that its account balances were accurate and complete. The audit went on to note that the city overstated its general fund balance in 2015 and 2016 and that multiple bank account balances were not included in its records.

“The council and city officials also need to improve their budgeting practices and management of fund balance,” the audit stated. “The council has continued to appropriate fund balance in the city’s budget without using it.”

The comptroller’s office also criticized the city for its bond issuance practices, saying that Yonkers has “repeatedly borrowed without first exhausting prior bond proceeds.”

“The continued reliance on one-time revenues to fund recurring expenditures could lead to budget gaps in the future if alternate funding sources are not identified,” the audit stated.

In response to the audit, John Liszewski, the city’s commissioner of the Department of Finance, said he disagreed with much of its findings, adding that the city undertakes “rigorous reporting and monitoring” on a regular basis.

“The city goes above and beyond statutory requirements,” Liszewski said.