Palmieri vetoes budget amendment to increase fund balance use by $300,000

Utica Mayor Robert Palmieri has vetoed an amendment to the city’s budget for the 2018-2019 Fiscal Year, which was passed on Tuesday.

Posted: Mar 22, 2018 6:17 PM
Updated: Mar 22, 2018 8:26 PM

Utica Mayor Robert Palmieri has vetoed an amendment to the city’s budget for the 2018-2019 Fiscal Year, which was passed on Tuesday.

Palmieri says the budget passed by the Common Council at their meeting on Tuesday included 21 amendments, and he is vetoing ordinance F14, which would increase the city’s use of fund balance by $300,000. The fund balance would have been used in part to reduce the proposed increase property tax rate for the 2018-2019 budget, and to help cover a $700,000 gap in pension costs that hadn't been accounted for.

The budget Palmieri initially proposed included a property tax rate increase of 7.8 percent, but the $72 million budget passed by the Common Council on Tuesday had reduced that rate to a 4.41 percent tax increase.

Palmieri says that $750,000 of fund balance was included in the 2018-2019 budget to pay off a one-time, expiring and non-reoccurring expenditure. Palmieri says that if any additional fund balance is included in the city’s budget, it will compromise and damage the city’s financial position.

On March 14, Utica Budget Director Heather Mowat sent a memorandum to Council members informing them of the potential harm that additional fund balance could cause. 

A portion of Mowat’s memorandum reads, “If any additional general fund balance were to be appropriated for the 2018-2019 budget other than that amount in the Mayor’s Proposed Budget, the City would likely suffer a rating decrease which would impact the City significantly by decreasing our borrowing rate for many years to come. Moreover, any additional general fund balance appropriation would impact cash flow and most likely result in the City once again issuing short-term debt to pay bills costing City taxpayers thousands.”

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