Projected reliance on reserves shrinks to lowest amount since 2010; Stronger economy and growing tax base create increased revenue; Tax and water rate increase to narrow budget gap

SYRACUSE, NY – Syracuse Mayor Ben Walsh proposed the fiscal year 2020 budget that continues to shrink the City’s reliance on reserves while investing in public safety, neighborhoods and city services. Walsh’s budget will advance the Syracuse Surge with the first installations of Smart City technology; fund the police body camera program and new classes of police officers and firefighters; better manage city equipment for snow removal, sanitation, and other city services; add a new dedicated street repair team to fix more roads and potholes; and expand the sidewalk snow removal program.

“Syracuse’s fiscal health is steadily improving, but we’re not out of the woods yet,” Mayor Walsh said. “We still need to make difficult decisions on revenue and spending, so we have resources for the improvements taxpayers deserve and to make the city attractive for investment. I asked departments to reduce their budget requests for operating expenses by 5% last year and another 2.5% this year. We can’t, however, cut our way to prosperity, so we need to accelerate the path to growth with smart investments.”

Spending restraint and revenue increases prevent layoffs and program cuts

For the second year in a row, the budget holds departmental operating spending flat. The budget anticipates revenue gains from a 3% growth in sales tax collections, a growing city tax base, and a proposed 3.5 % property tax increase. The budget also includes a 4% increase in water rates to better align charges with the actual cost of services delivered. Both proposed increases are the first since the fiscal year 2011. The $252.5 million spending plan would rely on a projected $8.1 million drawdown of the city’s reserves to balance the budget and prevent layoffs or service and program cuts. The budget proposal will be posted at www.syrgov.net after 3 p.m. on Monday, April 8.

“I want taxpayers to know their city government is taking steps to reduce costs and operate as efficiently and effectively as possible,” Walsh said. “Our team achieved the cuts without eliminating programs and services.”

Budget actions

In addition to fiscal prudence, the 2020 budget includes funding to address the major challenges facing city government:

  • Additional street repair crew in Department of Public Works and additional funds to reconstruct or resurface more roads including “Dig Once” projects on Butternut Street and North Beech Street
  • Additional funding for the Skaneateles Lake Watershed Agriculture Program to address Harmful Algae Blooms (HABs)
  • New class of police officers to improve patrol presence
  • New class of firefighters to offset recent and impending retirements
  • Full rollout of police body camera program (assisted by grants and state aid)
  • Increased support for teen programs at Southwest Community Center and Boys & Girls Club
  • Restoring staffing to Westmoreland Park on the City’s Eastside
  • Installation of LED lighting and first phase of smart sensors on city-owned street lights
  • New citywide fleet management function to improve maintenance, performance and financing of city vehicles for snow removal, trash and recycling pickup, police, fire, parks, etc.
  • Appoint full-time staff coordinator for the 2020 Census
  • Maintain support to Syracuse Land Bank at FY19 level
  • Expanded sidewalk snow removal program and planning for future citywide sidewalk maintenance, repair and snow removal
  • Tick and deer management program (to be reimbursed by Onondaga County)

Taxes and water rates

The proposed 3.5% tax increase will move the tax rate to $27.56 per thousand assessed valuations. It will result in $2.68 million in revenue to the City and $1.56 million to the Syracuse City School District. The 4% water rate increase of $1.29 million goes directly to a dedicated fund to invest in water services and infrastructure.

The proposed adjustments to taxes and charges for water would increase costs for an average priced home in Syracuse with median water use by less than $1.80 per week or about $92 per year (based on the average home sale price of $85,000).

“These adjustments come after very careful consideration,” Walsh said. “We want to maintain our edge for lower taxes compared to other cities in the state, but the city has gone eight years without increasing taxes. That is not sustainable and has not been good for the city’s fiscal health nor the way in which government serves constituents.”

Steady improvement in fiscal health

The City’s actual financial performance in the current 2019 fiscal year shows strong signs of improvement. The projected draw on reserves, which began fiscal year 2019 at $11 million dollars, is down to about $6 million in the mid-year budget report.

“Governments face large fixed costs in pension and health care benefits that are difficult to control, as well as wide swings in revenue that can be hard to predict,” Walsh said. “Despite that, we need to get better at more accurately projecting our actual financial performance. Foreseeing large deficits that don’t materialize lessens our ability to invest in our workforce and improve services to residents. The goal is a balanced budget. While we’re making progress in this area, we aren’t where we need to be yet.”

The budget gap reduction occurred even while city government funded an increase of $8.7 million in higher employee, health and pension costs, partly driven by settling nine labor contracts that had been previously deferred. The fiscal year 2020 budget includes the first full year of those increases. The deficit improvement is attributable to austerity spending in hiring and expenditures across city government; a one-time state payment for Medicare shared services savings; nearly $3 million cost reduction from the street light acquisition; and projected 3% growth in sales tax collections.

Fund balance stabilizing

With declining budget gaps, the City’s general fund balance sometimes referred to as a “rainy day fund,” is also declining at a slower rate than was previously anticipated. Predicted by some to be on course for depletion as early as 2021, the fund balance is expected to be at least $47 million on June 30, 2019, the end of the current fiscal year.

“Syracuse has a responsible fund balance today, and we need to do everything we can to keep it that way,” Walsh said. “Like any business or family, the City can’t rely on its fund balance to pay city workers or deliver services to taxpayers.”

Council Budget Hearings and Public Engagement The Syracuse Common Council will review the budget proposal in committee meetings to be conducted during the month of April. A public hearing on the budget will be held on Tuesday, April 30 at 5:30 p.m. The committee meetings and hearing, held in Common Council Chambers on the third floor of Syracuse City Hall at 233 E. Washington Street, will be streamed live on the City’s Youtube channel at https://www.youtube.com/c/CityofSyracuse/live. According to the City Charter, the Council must act on the Mayor’s budget proposal by May 8.

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