New York State Comptroller Thomas DiNapoli's office says it appears based on its review that revenue and expenditure projections contained in the City of Lockport's 2021 spending plan are "reasonable."
However, the review spotted potential trouble in the budgeted estimates of overtime and retirement buyout spending.
State auditors reviewed the city's proposed 2021 budget in keeping with the terms of an act allowing the city to liquidate accumulated deficits in the city’s general, water, sewer and refuse funds as of Dec. 31, 2013. Under the act, the city is required to submit to the state comptroller a copy of the proposed city budget by Jan. 1 each year.
State auditors noted that the proposed 2021 budget includes estimated state aid and sales tax revenues of $2.1 million and $5.5 million, respectively, which they suggested "may not be attainable."
In addition, the comptroller's office took note of the city's 2020 arbitration ruling loss, which requires the hiring of 12 firefighters, noting that city leaders plan to hire four new firefighters each year from 2021 through 2023. Auditors noted that the city has yet to document the plan in a written agreement with the Lockport Professional Firefighters Association.
Also, the office observed that the total overtime appropriation in the proposed budget is $110,000 less than was budgeted in 2020 and $55,000 less than projected for 2020 — and noted that the city is in negotiations with LPFA to increase minimum staffing levels for the fire department, which may result in additional overtime.
Auditors further noted that the proposed budget includes a negative appropriation of $317,287 for projected personnel turnover.
"This is not a conservative or appropriate budgeting method and could negatively affect the general fund budget," the comptroller's office review found.
The comptroller's office review included these "key" findings:
• Two of the city’s collective bargaining agreements are nearing settlement and will likely be in place in 2021;
• The city has 29 retirement-eligible employees and, if they retire in 2021, will be due buyouts totaling more than $750,000. The city has included only $545,000 in the proposed budget to fund buyouts;
• The proposed budget includes a tax levy of $13,174,703 which complies with the tax levy limit.
In addition to encouraging city leaders to continue monitoring revenues and expenditures and make adjustments as necessary, the comptroller's office recommended that the city:
• Enter into a written agreement with LPFA regarding hiring firefighters over a three-year period;
• Ensure overtime appropriations are reasonable when adopting the final budget;
• Consider the union contracts nearing settlement and whether contingency appropriations are adequate if unanticipated retirements occur, and budget accordingly.