MESSAGE FROM THE MAYOR

We are all aware of the current economic environment around the country, the effects of which have begun to manifest themselves here in New York. Earlier this year while attempting to balance its own budget, New York State cut aid to municipalities, essentially forcing us to start this year in a deficit. The budget situation in New York has been deemed a crisis by Governor Paterson, which has forced our state aid below 2008 numbers.

Unfortunately, the bad news did not stop there. Earlier this month State Comptroller DiNapoli issued a pension bill to the city that is $1.4 million more than 2009. That number alone represents a tax increase of nearly 10 percent to the City of Troy. Local residents are being asked to bear the responsibility of fiscal mismanagement at the state level, and it has become our job to avoid that dramatic measure.

Thus far Troy has been able to weather parts of this storm. We have managed to foster successful economic development efforts with exciting additions to our downtown business area and Hoosick Street Corridor in an attempt to build our tax base. Among these projects are a national-award winning restaurant chain, a brand new hotel on Hoosick Street, an urban hardware store founded by local business owners, and a revitalized tax-paying student housing project. These people chose Troy to open or expand their business because they see the potential for growth here.

After a year of stable health care costs, those expenditures are expected to increase an additional six percent, and contractually mandated salary increases for city employees will rise by 3.5 percent. In the end, this means our city government must find supplemental ways to continue providing the services Trojans have come to rely upon and expect from us.

I have made it a point in my six budget proposals to offer a tax increase only when absolutely necessary. It is the reason taxes have not increased since 2006. As we continue to seek new avenues of increasing our revenues and expanding our tax base, this operating budget is a fiscal plan that will keep us on solid footing for the future.

The extraordinary financial pressures from the national economy have affected every level of government, either through increased spending, unfunded mandates, or declining revenues. To that extent, the aforementioned costs, mandates placed on the city, and decline in revenues could have amounted to a tax increase of 26 percent. Thanks to our fiscally conservative and financially responsible approach to taxpayer dollars, we were able to reduce that tax increase to 4.25 percent for the proposed 2010 city budget.

I am also pleased to report that in 2010 we are proposing no new increases in our water and sewer rates.

This budget proposal was achieved through a number of different avenues, including:

• All city department heads were required to work with the Deputy Mayor and Comptroller to cut anything that is not absolutely necessary. A total of $1.4 million was cut from the city’s budget requests during this process.
• This budget plan allocates a large portion of Community Development Block Grant (CDBG) funding to the General Fund for the purpose of reimbursing salary operating costs for Code Enforcement, which the City Council has supported in the past.
• All vehicle and equipment purchases in the proposed 2010 operating budget will be purchased using our capital reserve fund.
• The City also proposes amortizing a portion of the proposed pension bill increase.

As mentioned previously, the city has been able to avoid a dramatic increase in our tax rate by following a budget model that avoids placing government burdens on the backs of hard-working taxpayers. This proposed budget is fiscally conservative and financially sound, and we have been able to control costs where possible and avoid spending when able.

I realize that as elected officials, November is right around the corner and the temptation of politics is easy to succumb to. It is the time of year when people say or do many things they think they must in order to appease a constituency or attract a following. However, we are a city faced with declining revenues and increased costs. We cannot afford to have politics motivate our decisions.

We must show the people of Troy that as civic leaders, we are capable of reaching across political and governmental boundaries to come to agreement on the best course of action that results in providing them with continuously superior services. We must work together to arrive at a budget that maintains the momentum of avoiding any further increase in the tax rate that we worked diligently to reduce.

Sincerely,

Harry J. Tutunjian
Mayor of Troy, NY

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Budget Message Amendment
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After the release of the proposed 2010 budget, the City Council held a number of committee meetings to review the budget. In an effort to further reduce the tax increase members of the City Council met with Deputy Mayor Crawley and Comptroller Witkowski. An agreement was reached to make additional changes to the proposed budget. These discussions led to a reduction of the tax increase from 4.25% to 2.54%. The changes are outlined in the attached Schedule A. The agreement reached included reducing the number of newly hired police officers from four to one. Also, it eliminated a Sign Signal Mechanic, a DPW laborer, Sign Maintenance Person, and the Recreation Supervisor. A temporary salary line in Code Enforcement was also eliminated, saving $16,000. The total spending reduction was $261,925.

One week later during the final vote on the budget, additional changes were proposed to the legislation adopting the 2010 spending plan. Those changes, which were adopted, caused the budget to be unbalanced and threatened the operation of the city and its services. Many of the changes also violated the City Charter. The City Council overturned the veto of their amended budget. As a result we had to seek a ruling from State Supreme Court. The Judge ruled that the City Council could not make all of the changes they proposed and therefore restored all cuts except for a reduction of the Consultant Services account in the Law Department. The line was reduced from $135,000 to $97,500 as ordered by the Judge.

Harry J. Tutunjian
Mayor of Troy