3-Year Financial Recovery Plan

When I took office in January 2012, the financial outlook for the City of Utica was bleak.

Our financial problems stemmed from the implementation of unbalanced budgets and poor fiscal management. Rather than address the financial reality, the City drained reserves and allocated fund balance to fill budget gaps.

The fund balance was $5 million in 2009 and plummeted in the negative by the time I took office. This violated a 2004 referendum approved by residents calling for the fund balance to be at least 5% of the total budget and a 2010 ordinance passed by the Common Council mandating the fund balance be no less than 3% of the total budget.

If the City did not change its ways we would succumb to the direction of a state control board.

Understanding we needed guidance to fix the inherited financial mess, I met with New York State Comptroller Tom DiNapoli. Comptroller DiNapoli provided great insight about what needed to be done to change Utica’s trajectory. We spoke with financial rating institutions to solicit their recommendations and developed a three year financial recovery plan, calling on the City to make difficult decisions.

Over the past three years the City made those difficult decisions, improved our financial condition and avoided a control board.

As a result of smart financial planning we secured $936,000 and $1.5 million surpluses which came on the heels of $1.4 and $1.6 million deficits prior to my term. These surpluses increased our fund balance from a negative to over $3 million dollars, a milestone of our recovery plan and a focus of the correspondence with Comptroller DiNapoli and the financial rating institutions.

From Day 1, our goal was to improve the City’s fiscal health by implementing responsible budgets that kept taxes as low as possible and provided the services our residents deserve.

While we significantly increased the City’s fund balance, I adamantly refuse to use any fund balance to supplement the budget as this past practice caused our financial downward spiral in the first place.  

Looking at the success of our recovery plan we’ve gone from a City with a negative fund balance and million dollar deficits, to a City with a $3 million fund balance and million dollar surpluses. We are clearly moving in the right direction.

The positive economic turnaround the City of Utica is experiencing is a complete team effort and as Mayor of Utica, I thank everyone who is helping the City realize its transformation.

Milestones to Recovery

Standard and Poor’s Rating

On June 3, 2014, the Mayor Palmieri and Comptroller Morehouse proudly announced a financial milestone,

MAYOR PALMIERI AND COMPTROLLER MOREHOUSE ANNOUNCE CITY’S FINANCIAL OUTLOOK UPGRADED

Mayor Robert Palmieri and City Comptroller Bill Morehouse today announced Standard and Poor’s upgraded the City of Utica’s financial outlook from negative to stable, a definitive sign the City is moving in the right direction.

In its report, Standard and Poor’s stated Utica's budgetary flexibility is strong and has improved in the past two fiscal years. The City’s upgraded outlook reflects Standard and Poor’s opinion of Utica's recent improvements in financial operations leading to a stronger general fund reserve position.

The report went on to say the city has reached structural balance in the past two fiscal years.”

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In only two years the City’s financial situation improved substantially and outlook for the future looks promising.

Audit Announcement

Six months later, on December 30, 2014, Mayor Palmieri and Comptroller Morehouse had the pleasure of announcing the City’s continued budgetary success:

MAYOR PALMIERI & COMPTROLLER MOREHOUSE ANNOUNCE ON TIME COMPLETION OF AUDIT AND $1.5 MILLION BUDGET SURPLUS

City Plans to Further Increase Fund Balance, Improve Streets and Infrastructure and Enhance DPW Services

Mayor Robert Palmieri and Comptroller Bill Morehouse today announced the audit of the Mayor’s second fiscal year in office has been completed on time with an operating budget surplus of $1.5 million surpassing last year’s surplus of $931,000, which was the largest in 16 years.

While last years review from the financial institutions of Fitch and Standard and Poor’s indicated positive improvements, the City still faced the stigma and obstacle of late financial reporting and having an inadequate fund balance.  Mayor Palmieri and Comptroller Morehouse stated publicly they would work together and do everything possible to ensure this year’s audit was completed on time.

The budget surpluses of $931,000 and $1.5 million show a tremendous turnaround compared to $1.6 and $1.4 million deficits the two years prior to the Mayors tenure in office.

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Mayor Palmieri and the City continue to work everyday with federal, state and local partners to establish economic sustainability, secure Utica’s future and to further the City’s financial footing.