City responds to state fiscal stress report

Mid-Hudson Bridge (file)

POUGHKEEPSIE – Thirty local governments in New York State ended 2020 in some form of fiscal stress, State Comptroller Thomas DiNapoli announced on September 22. The communities were identified by the Comptroller’s Fiscal Stress Monitoring System (FSMS).

DiNapoli releases fiscal stress scores on municipalities (excluding New York City) twice a year. The latest round of scores identified 19 local governments designated in fiscal stress, including Westchester County, the City of Poughkeepsie, and the Town of Clarkstown. This report is based on financial information of local governments operating on a calendar year basis (Jan. 1 – Dec. 31) for 2020 and covers all counties and towns, 44 cities, and 10 villages.

Poughkeepsie City Administrator Marc Nelson responded to the rating, saying, “The Comptroller’s fiscal stress rating is calculated by use of a complex formula which applies a weighting system to a number of categories. The most heavily weighted component of the scoring system is the reserve, or fund balance, that a municipality has on hand for use in times of need.”  The city has slowly been rebuilding the reserves depleted by the previous administration.

“The city has had a negative general fund balance (no reserves) but has been steadily improving its fund balance deficit since 2016. The drop in the City’s rating was the result of the 2020 deficit we experienced due to the pandemic which was approximately $900,000,” Nelson said.

According to the city administrator, the scoring system was created before the pandemic obviously, and so it does not take into account the award of Federal American Rescue Plan (ARP) funds of which the city is slated to receive $20 million.

“One of the most appropriate uses of ARP assistance is the replacement of lost revenue experienced during the pandemic. The timing being what it was, the city was unable to bring any portion of the award back into the 2020 fiscal year, which had already closed before the aid was approved,” Nelson continued.

As the Rolison administration prepares their upcoming budget, Nelson said, “The most important thing we can do today is budget as carefully and conservatively as possible – particularly with respect to the estimation of future revenues.”

“New York’s local governments have overcome some major fiscal hurdles during the COVID-19 pandemic,” DiNapoli said. “Federal assistance, the restoration of state aid, and resurging revenue have provided them much-needed relief. However, those designated as stressed are less likely to have the flexibility to adapt to fiscal challenges long term. Local officials must budget and plan carefully to avoid fiscal stress and manage their communities through the uncertainties created by the pandemic.”

In this latest round, the City of Poughkeepsie with a fiscal stress score of 78.3, is one of the governments that received the highest-ranking designation of “significant stress.”  The City of Niagara Falls and the Town of Caneadea also have the highest-ranking designation of “significant stress.” Westchester County is in “moderate stress.”


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