YONKERS, NY — January 24, 2022 — Council President Lakisha Collins Bellamy has noticed a public hearing for January 25, 2022, at 7pm for the purpose of amending the capital budget. This is a political euphemism which means: our city commissioners are inept and presented an incomplete capital plan during the last budget cycle. During the 2021 budget process, the city had appropriated $97,156,963. However, our municipal managers quickly proved their incompetence. Even before the fiscal year started, the capital plan was amended to add another $9.6 million of spending.
$3.5 million went to road resurfacing and signage if you believe that.
$1.8 million to the Parks Department
$3.5 million to Yonkers Board of Education
The remaining $800,000 was sprinkled around as software and safety upgrades.
Budgeting is a process that begins at least six months before a budget is due. Yonkers budget is due by April 15. The budget is divided into two major buckets, operating and capital. Formulating an operating budget is generally more difficult. One must estimate staffing needs, overtime, benefit costs, utility pricing and a slew of other unknowns. More often managers will use an incremental model. In this model the last year’s budget performance is analyzed and incremental adjustments are made to allow for surpluses or deficiencies among individual budget accounts. Inflation, utility trends, and collective bargaining agreements are also considered. A contingency is built into the model to help plan for worst case scenarios. Another model is called Zero Based Budgeting (ZBB). ZBB is rarely used, but it is a good tool to validate past practice and current assumptions. Using ZBB, an organization starts as though they are developing a new program. No references or assumptions are made using past activities. ZBB helps find inefficient or obsolete activities that have been unwittingly recorded in the incremental model.
Capital budgeting is a much easier process. An organization will look at its capital assets and estimate the investments it will make in those assets over time. An acceptable capital plan will have a horizon of 10 years, with the first five years being relatively concrete. Buildings, automobiles, and other durable property over $10,000 are considered capital assets, although each organization may have a slightly different definition. Yonkers pays for its capital budget by issuing general obligation bonds. We borrow, and boy do we borrow. In fact, New York State Comptroller Tom DiNapoli, has often criticized Yonkers for its borrowing and one time revenue gimmicks. In 2021, the City of Yonkers had its bond rating downgraded, because we weren’t fiscally stable. While the city’s rating was just upgraded to A2 from A3, Yonkers still has a low bond rating. This rating adjustment came as a result of COVID money, another one-time revenue gimmick. For comparison, White Plains is rated at Aa1, which is four levels higher than Yonkers. All this borrowing cost the taxpayers $78 million in 2021. That is $78 million that came out of our operating budget and the pockets of our taxpayers.
Yonkers operates on a fiscal year of July 1 to June 30. This means our budget season has started and municipal managers are already formulating their FY (Fiscal Year) 2022-2023 budget for the April presentation. This $6.85 million appropriation should be part of FY ’22-23 and not amended to the capital plan. The City Council needs to do their job and vote no, thus holding our commissioners and department heads responsible for the budget and the information provided at budget hearing. This interim appropriation, if approved, would take the presented capital budget of $97 million and balloon it to well over $113 million which sounds like bait and switch to me.
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Ron Matten is the Associate Vice President for Facilities Management and Capital Planning at New York Medical College.