Albany seeks review of operations
Facing state aid cuts, Mayor Jennings calls for greater financial efficiency
Published on 1/5/2010 by the Times Union written by JORDAN CARLEO-EVANGELIST, Staff writer
ALBANY -- An outside financial management firm will scrutinize the workings of city government in the coming months to help sidestep "financial tsunami" in 2011, when, among other things, state payments to the city in lieu of taxes are scheduled to plummet nearly $8 million, Mayor Jerry Jennings announced Monday.
The city will also convene a task force of outside financial experts to examine the fiscal difficulties special to Albany as a capital city, such as the abundance of tax-exempt property, Jennings said in his annual State of the City Address, which focused largely on Albany's place in the larger state fiscal crisis.
Jennings said that outside review will include exploring the possibility of collecting revenue from agencies and nonprofit organizations in the city that "are engaged in essentially for profit activity" -- a potentially controversial undertaking.
The panel will also be asked to investigate whether the inequitable distribution of state aid among cities violates the state constitution.
"These issues are no longer academic," Jennings said, "they are totally relevant to our short and long-term financial stability."
It is a note Jennings has struck repeatedly in the past, most recently with the release of his 2010 budget in October, when he and other members of his administration criticized the state for continuing to pass along increasing expenses to local governments while at the same time providing Albany with far less financial support per capita than other cities.
Since then, Gov. David Paterson, in an effort to keep the state out of the red, has further delayed payments to local governments and school districts, including about $12.5 million in promised aid to Albany -- forcing the city to borrow in order to make its payment into the state pension system on time.
Officials have said the city could be looking at a $20 million hole in the 2011 budget, if not larger.
By the city's calculations, Albany would receive $51 million more a year if it were compensated by the state at a rate equal to that of Yonkers.
The outside task force and management firm will be joined in their analyses by another panel of city officials, including the first chief city auditor, Leif Engstrom, and new Treasurer Kathy Sheehan.
Also on that task force will be Common Council President Carolyn McLaughlin, Deputy Mayor Phil Calderone, Budget Director Christopher Hearley and the president pro tempore and majority leader of the council.
A request for proposals will be issued for a financial management firm soon, prompting 11th Ward Councilman Anton Konev to question why the job would not be left to Engstrom's brand-new Office of Audit & Control.
Konev questioned the wisdom of spending money on a financial management firm when the council last year declined to increase the staff of Engstrom's office, in part citing financial constraints.
Engstrom, however, said his five-day-old office would be unable to jump so soon into such a large undertaking.
"I'm not bent out of shape with the concept of bringing in outside resources," Engstrom said. "My office doesn't have the capability of conducting a citywide comprehensive management audit at this point."
Councilman Dominick Calsolaro, who represents the 1st Ward, said he agreed with Jennings that the city unfairly receives too little state aid and hailed the mayor's pledge to draft multi-year budgets for more long-term planning.
But Calsolaro largely shrugged off the rest of Jennings' speech, saying it amounted to little more than asking the state and federal governments for a bailout without offering much in the way of concrete solutions.
Jennings, who is beginning his fifth term and 17th year as mayor, ended his speech emphasizing the positive and importance of how the city responds to these challenges.
He cited investment in the city's revitalization, its being named an All-America City last year and noted how an influx of stimulus money is helping the police department fill 10 vacancies to bring it back while efforts are under way to do the same for some 20 vacant firefighter jobs.
"I am once again the optimist," Jennings said. "Our city is resilient, out people are resourceful, and our opportunities for success unlimited."