Finance Commissioner Sanghvi mostly optimistic about city finance – Saratogian

SARATOGA SPRINGS, NY – During the most recent Saratoga Springs City Council meeting, Commissioner of Finance Minita Sanghvi presented highlights from the said Preliminary Financial Report for the Fiscal Year Ended Dec. 31, 2021.

Sanghvi noted that the city is presently operating with a surplus.

“As one could imagine 2021 was a lot better than 2020. In 2021 we ended up with a surplus of about $ 9 million dollars and an excess fund balance of approximately $ 1.9 million dollars,” Sanghvi remarked on the year-to-year discrepancy.

Yet, Sanghvi also cautioned that a good bulk of those revenue boosters were one-shot deals not likely to be seen in the near future.

“So, while 2021 was a robust year and while our total revenues have never been this high, this is partly due to one-time events,” Sanghvi said.

“One is a $ 3.9 million dollars of federal funding that we got because of COVID, which we are not gonna get next year, as well as a one-time sale of city property that generated about $ 2 million dollars in revenue. So, about $ 6 million dollars really is one time windfall, ”Sanghvi explained.

The Finance Commissioner also detailed other expenditures outlined in city funds.

“In 2021 we ended up with a fund balance of $ 7.6 million restricted, assigned or non-spendable and $ 15.4 million in unrestricted, unassigned amounts,” Sanghvi said.

“So, you have a restricted fund balance which totals $ 1.79 million dollars which includes the retirement reserve, insurance reserve, capital reserve, tax stabilization reserve, and these are governed by New York State law. Assignments total $ 2.6 million dollars, include non-profits, refund for prior year taxes, recycling, IT initiatives, police reform task force, sick leave, staff cost adjustments and these are governed by city council, ”Sanghvi noted.

“Encumberances total $ 2.6 million dollars, which represent expenditures committed to 2021 but which are paid thereafter. Non-spendables total $ 1.18 million dollars which represent amounts that cannot be expended. And unassigned, unrestricted total $ 15.4 million, ”Sanghvi continued.

“Our fund balance policy restricts fund balance to 10. Currently our fund balance is at 28.49% which means we will be looking at reducing our fund balance to meet our policy requirements,” Sanghvi added.

Additionally, Sanghvi gave an overview of city revenues, noting some revenues were greater in 2020 but lower than what was budgeted for.

“Some of the 2021 revenues, we also have a very good sales tax year, it was a 35% year on year increase from 2020. Our hotel occupancy tax was 120% increase over 2020. Our mortgage tax increased 34% over 2020 with about $ 2 million, ”Sanghvi said.

“Our 2021 expenditures, we had some expenses that were higher than 2020 but lower than budgeted. For example, our health insurance was about $ 7.2 million dollars, which was a 1% increase compared to 2020 but $ 373,000 dollars lower than budgeted. Health insurance is 16% of our general fund expense, so it’s pretty sizeable, ”Sanghvi explained on costs.

“Another expense to note is our overtime which was almost $ 1 million dollars, at $ 912,000 dollars. This is a 15% increase from our 2020 numbers and definitely something we can work on, ”Sanghvi noted.

“Our total general fund expenses were basically $ 1 million dollars more than 2020 but $ 3.7 million less than the revised budget which is not including encumberances. Our cash balances at the end of 2021 are $ 4.86 million dollars less than 2020. This is due to the full payment of loans and tax anticipation notes used to cover cash deficits during peak pandemic periods of 2020. Reserve balances also declined but have since been largely replenished, ”Sanghvi added.

Sanghvi concluded with an optimistic note on city finances, including an anticipated strong summer tourist season.

“I’m upbeat about our city’s financial health but I also recommend a more restrained approach. We must not forget that the success of 2021 was largely due to one-time revenue sources, like I’ve explained the city property and federal funds, which leave a gap in the general fund budget that we will need to be filling in 2022 and 2023, ”Sanghvi remarked on ensuring the city maintains its AA + bonding rating.

“Our focus right now especially in the financial department is to restore our city’s financial stability. We are still seeing waves of COVID raging through our community, we have a third EMS fire station to build, we have to fund the hiring of fire fighters and our capital reserve is currently half of what it was in 2018, ”Sanghvi explained.

“Our city is gearing up for a strong summer and there is excitement, optimism and energy in the air. As there should be. We have a lot to be happy about, ”Sanghvi added.

The Preliminary Financial Report provides a summary of the city’s 2021 Annual Financial Report Update Document which will be reviewed by the city’s auditors in the coming months, with audited financial statements to be released in late Sept.

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