CITY FUND BALANCE REACHES RECORD LEVEL

            Twelve years after completely depleting its available funds, the City of Utica announced today that its total general fund balance now stands at $14.1 million.  Total unrestricted and available fund balance is $10.3 million with an additional $3.8 million restricted for future expenses associated with retirements, paving, city owned building improvements and other non-spendable uses.

The Mayor and City Budget Director Heather Mowat, a Certified Public Accountant, has set a long-term goal of having an unrestricted total fund balance that reaches 2-months of budgeted expenses of the city’s general fund. This goal is echoed by the Government Finance Officers Association (GFOA). If the goal is reached, the city will be able to borrow less, pay lower interest rates and better sustain an economic downturn. Two months of budgeted expenses would equate to approximately $12.5 million, which is $2.2 million short of that goal.

            In 2021-22, the city netted a surplus of $3 million thanks to higher-than-expected sales tax revenues. The resulting $14.1 million fund balance will allow city officials to apply for another upgrade in bond ratings. This could lead to lower interest rates on borrowing expenses.

            The news of the fund balance increase comes after the city cut taxes in the 2018-19 budget and has posted consecutive 0 percent tax increases since then. It comes despite a sharp rise in fuel costs, medical costs and employee salaries. The city also has been able to generate surpluses and keep taxes down while abiding the by the referendum that passed in 2018 requiring it to spend $5 million annually on roads – more than double what it had traditionally been spending.

Eleven years ago, the city was experiencing significant cash flow issues in making payroll and paying everyday expenses. The once robust Water Trust Fund and the fund balance were drawing near zero and all three credit ratings agencies downgraded the city to near junk status.

            Thanks to improved financial conditions and Mayoral decisions, the city has already been upgraded by all three credit ratings agencies in previous years. In addition, the positive cash balances produced by a much higher fund balance recently allowed the city to self-insure when it comes to employee medical benefits. This change eliminates the middle-man and helps stabilize insurance rates producing savings.

Utica Mayor Robert M. Palmieri said: “The financial improvements we’ve seen in the City of Utica help drive the growth and bright future of our city. The decisions we had to make in 2012 were very difficult ones, but they were necessary. Now, when you combine all of the growth and improvements with a stable balance sheet, our potential is unlimited.”

Utica Comptroller William M. Morehouse said: “The transformation that has taken place with the City of Utica’s finances is something that will benefit every resident and taxpayer in Utica. I’m proud of the record we have been able to establish by working together, being responsible and putting the taxpayer’s interest first. I look forward to continued progress and am committed to making sure taxpayer money is spent wisely and responsibly.” 

Budget Director Heather Mowat said: “The key word is stability. Whether it’s the tax rate, the interest rates we pay on our borrowing or our ability to sustain a downturn --- we need to give our residents stability. We’re almost at our goals when it comes to fund balance and it’s important that we keep the prudence and discipline that got us here. If we do that, our financial situation will provide opportunity and stability for years to come.”