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NYS Comptroller

THOMAS P. DiNAPOLI

Press Releases

November 22, 2013, Contact: Press Office (518) 474-4015

DiNapoli: Audit Reveals Fiscal Stress in City of Fulton

The city of Fulton has spent down its rainy day funds to dangerously low levels, leaving city officials little cushion to manage unforeseen expenses, according to an audit released today by State Comptroller Thomas P DiNapoli. Earlier this year, DiNapoli’s fiscal stress monitoring system identified the city as one of nine communities in “moderate stress.”

“Fulton is experiencing many of the same financial difficulties as other upstate cities,” said DiNapoli. “The lack of revenue growth and a desire to maintain a level tax rate has led the city to drastically cut its workforce and nearly exhaust its rainy day reserves. As a fiscally stressed municipality with limited resources, Fulton officials fully recognize that careful budget planning will be vital to the city’s future. City officials have made difficult financial decisions, and I encourage the mayor and the city council to continue their prudent approach.”

DiNapoli’s auditors found from 2010 through 2012 the city council generally adopted realistic budgets, however, unexpended surplus funds were drastically reduced because the city routinely used fund balance as a financing source. During the three year period, Fulton’s unexpended surplus funds declined 84 percent, from $841,747 in 2010 to $136,068 at the end of 2012. Because the city has nearly spent all of its surplus funds, it no longer has fund balance available as a financing source in its 2014 budget.

To cope with this challenge, city officials have implemented a number of cost savings measures in an effort to relieve the city’s fiscal stress.

For example, the city has reduced the number of its employees through attrition. As a result, the total number of city employees decreased to 143 in 2013 from 159 in 2010, a decline of 10 percent. The city has also reduced costs in areas such as ambulance services, landscaping, rehabilitation and support to the local library, resulting in total savings of more than $800,000 during this period.

The city is also one of the first municipalities to apply for a comprehensive review by the state’s Financial Restructuring Board for Local Governments.

DiNapoli recommended officials reduce the city’s reliance on fund balance as a financing source and continue to evaluate and explore ways to cut costs and increase revenues. The city council should also adopt a policy setting forth the reasonable amounts of unexpended surplus funds to be maintained.

City officials agreed with the audit findings. Their response is included in the final audit. For a copy of the report visit: http://www.osc.state.ny.us/localgov/audits/cities/2013/fulton.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 nearly 50,000 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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