SARATOGA SPRINGS — The city may take several cost-cutting actions during its Tuesday, May 19 meeting as it looks for ways to fill an anticipated absence of revenue sources due to the COVID-19 pandemic.
City Finance Commissioner Michele Madigan estimated the city may lose $14 to $16 million in revenue in 2020 - nearly one-third its $48.7 million operating budget. Furloughs, deferred raises, retirements, and layoffs are all on the table.
“In the face of the absence of federal assistance coupled with revenue losses – all of our revenues pretty much - jurisdictions across the state are moving ahead with layoffs and furloughs,” Madigan said, during the council’s last meeting, earlier this month. “It is critical that we significantly reduce our spending now.”
Furloughs are preferable to layoffs, Madigan said, as they would provide immediate expense reductions as well as allowing those furloughed the ability to collect state unemployment funding as well as maintain their city-provided benefits. While 33 city employees are “available” for retirement, however, at retirement they would be due compensatory time, sick time and overtime pay.
“Many of our employees have reduced duties during our stay-at-home period while the city still pays them as if they were working a 100% schedule,” she said. “The more people we furlough now – and it will be difficult - the fewer we will need to consider laying off later in the year.”
Through the first quarter of 2020, the city announced it had collected just over $9.1 million (or 57%) in property taxes, but by the March 31 reporting date had not received many larger revenue streams. Those include: sales tax figures (March collections are distributed to the city in April and May), VLT Aid (paid in June), Hotel Occupancy Tax (April), Water and Sewer Revenues (May 15 due date) as well as other sources paid later in the year. The city is annually paid NYRA Admissions Tax for hosting the summer meet, but that funding outcome is not known for 2020 should NYRA decide to run at Saratoga while not admitting ticket-paying fans.
Every county in every region of the state saw a large drop in local sales tax collections in April, according to a report announced by State Comptroller Thomas P. DiNapoli on May 12. Social distancing protocols were established with the “New York State on PAUSE” initiative, which has shuttered non-essential businesses and offices since March 22.
Of all regions in the state, the greater Capital District had the most severe decline – down 28.8 percent and totaling $42.6 million - down from $59.9 million exactly one year earlier.
Saratoga County was down from $10 million to $7.4 million overall, and tax collections in Saratoga Springs specifically dropped from $900,000 in April 2019 to $700,000 in April 2020, according to the report, which rounds figures in millions of dollars.
To compensate for a potential $14 million to $16 million revenue shortfall in Saratoga Springs in 2020, the council is contemplating the use of approximately $4.5 million of the city’s unassigned and unrestricted fund balance, Madigan said, as well as “$1 million from the re-assignment of various assignments, $2.4 million in a budget note due to be paid back at the end of 2021, and $4 million in departmental expense reductions.” Those measures total $11.9 million, leaving a projected revenue shortfall of $2.1 to $4.1 million.
Earlier this month, the City Council approved a series of budget transfer resolutions to fund the last stage of renovations at City Hall, which has been closed since an August 2018 lightning strike caused substantial damage to the 19th century structure. Shortly after the closure of City Hall, the city relocated most of its operations to the Vanderbilt Avenue recreation facility.
Approximately $567,000 is required to complete the renovation of the building.
To that point, the City Council unanimously approved moving $167,000 from the building reserve fund, $151,000 that had been targeted for the Saratoga Arts building, and more than $188,000 of the $200,000 it had previously approved for Recreation Department Skate Park improvements at East Side Rec. Last week, the city announced the cancellation of Recreation Department summer events and camps.