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August 27, 2013

DiNapoli: Colonie Addressing Financial Challenges

The Town of Colonie has improved its finances significantly in recent years due to stronger budget planning as it deals with fiscal stress, according to a report issued today by State Comptroller Thomas P. DiNapoli. The report is part of a series of fiscal profiles on municipalities across the state.

“Despite its strong tax base, Colonie has struggled financially over the past decade but is now showing signs of improvement,” said DiNapoli. “Supervisor Mahan is aware of the challenges facing her town and has made difficult, but necessary financial decisions to align spending with revenues and eliminate budget deficits. Careful budget planning and an honest conversation about the numbers will continue to be vital to turning around the town’s finances.”

“We are in the sixth year of our ten-year financial plan and the results indicate that we are in a much stronger financial position than we were in 2008 and we continue to build our reserve funds,” said Town of Colonie Supervisor Paula Mahan. “I commend Comptroller DiNapoli’s efforts to take a proactive approach to provide resources to municipalities in fiscal stress. My administration will continue to work with the Comptroller to stay on the right path and maintain our conservative financial approach.”

The town’s financial challenges were highlighted by DiNapoli’s office in separate audits in 2008 and 2012.

Most of the findings from the 2008 audit have been addressed by the current administration. Notably, the town has tackled significant budget deficits by implementing tax increases and arranging to have the town’s landfill run by a private company.

At the end of the 2008 fiscal year, the town’s General Fund and Landfill Fund had deficits that totaled $29.3 million and $7.6 million. At the close of the 2012 fiscal year, the town’s General Fund deficit had been reduced to only $245,000, with total fund equity of more than $500,000. The Landfill Fund deficit, meanwhile, was effectively eliminated when the town turned operation of the landfill over to a private waste management company.

In addition, the town has indicated it would implement many of the recommendations from the 2012 audit as part of its ten-year financial plan. This includes addressing the use of short-term borrowing to cover annual operating expenses. The Comptroller’s fiscal stress monitoring system highlighted this issue when it identified Colonie as one of six communities in “significant fiscal stress.” The town, however, has reduced its reliance on short-term borrowing from a high of $11 million in 2006 to $2.5 million in 2012.

The Comptroller’s fiscal profile noted a number of positive demographic and environmental factors that are working in the town’s favor.

For example, the town’s median household income of $70,367 is substantially higher than the median of $52,047 for towns statewide. Colonie’s unemployment rate was 6.7 percent in 2012, 1.8 percentage points lower than the statewide rate of 8.5 percent in 2012.

DiNapoli’s report also highlighted:

  • Colonie’s revenue grew 3.6 percent on average annually from 2002 through 2012, equal to the growth for all New York towns during the same time frame;
  • Town expenditures increased 3.2 percent on average annually during the decade, compared to a growth rate of 3.9 percent for all towns;
  • Colonie’s population grew by 18 percent in the past 30 years, reaching 81,591 by 2010;
  • Less than 10 percent of children in the town were living in poverty in 2011, compared to the median town poverty rate for children of 13.3 percent; and
  • The median home value in Colonie is $217,700, compared to the median town's value of $117,550.

DiNapoli has issued nearly a dozen profiles on municipalities across the state. As part of this effort, DiNapoli will also release in-depth reports on some of the issues that contribute to the financial pressures on local governments.

Earlier this year, DiNapoli also implemented an early warning monitoring system that gives local communities a fiscal stress score. Under his Fiscal Stress Monitoring System, DiNapoli identified 24 counties, cities and towns with fiscal years that coincide with the calendar year that are in fiscal stress. DiNapoli will issue additional fiscal stress updates for other local governments with different fiscal years on an ongoing basis.

DiNapoli’s system evaluates local governments on nine financial indicators and creates an overall fiscal condition score. Indicators include fund balance, cash-on-hand and patterns of operating deficits. The scores are used to classify a local community as being in “significant fiscal stress,” “moderate fiscal stress,” “susceptible to fiscal stress” and “no designation.” The system also evaluates communities relative to 14 environmental stress factors such as population trends, poverty rates and property values.

For a copy of the Colonie fiscal profile visit: http://www.osc.state.ny.us/localgov/pubs/fiscalprofiles/colonie.pdf

For copies of Comptroller DiNapoli’s 2008 and 2012 audits of Colonie visit:
http://osc.state.ny.us/localgov/audits/towns/2008/colonie.pdf

http://www.osc.state.ny.us/localgov/audits/towns/2012/colonie.pdf

For more detailed information about Comptroller DiNapoli’s fiscal stress monitoring system and to view reports related to local government fiscal stress visit: http://www.osc.state.ny.us/localgov/fiscalmonitoring/index.htm

For access to state and local government spending and more than 60,000 state contracts, visit http://www.openbooknewyork.com/. The easy-to-use website was created by Comptroller DiNapoli to promote openness in government and provide taxpayers with better access to the financial workings of government.


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