Lee Provides Clarification on City Budget

By MONICA CALZOLARI
ONEONTA

The City of Oneonta manages a $20 million budget and oversees up to 205 employees when fully staffed. Staff vacancies have been a source of savings, according to officials. The 2025 tentative budget—set to be voted on on Tuesday, December 3—shows a deficit of $1.68 million. That deficit has been a controversial subject of debate at Common Council meetings since July. Using a surplus of unrestricted funds is proposed to balance the budget.

The city’s major sources of revenue are taxes and state aid. Wages and benefits represent 70.57 percent of the 2025 general expenses. New sources of revenue are needed, officials said.

Raising taxes or introducing paid parking have been unpopular possible sources of additional revenue at Common Council meetings. Cutting essential services is equally unpopular. Common Council members often debates these issues for three to four hours when they meet.

The 2025 budget documents can be found on the city’s website, in full transparency. The 2025 budget is 92 pages long.

Public Safety’s payroll and fringe benefits constitute $9,296,375, or 64 percent, of the general fund payroll and fringe benefits costs. Public Safety is comprised of the city’s Police, Fire and Code Enforcement departments.

Virginia Lee, director of finance, provided the following employee counts via e-mail on Sunday, November 24. The figures below represent a percentage of the 141 full-time employee count:

• Police: 32 employees, or 22.69 percent
• Fire: 28 employees, or 19.86 percent
• Code Enforcement: six employees, or 4.26 percent

In total, Public Safety employs 66 workers, or 46.81 percent of all city employees.

Public Safety is considered an essential service. There are four unions protecting the rights of these public servants.

The mayor’s annual salary is $15,000.00. Common Council members earn $8,000.00 per year. Prior to a salary increase effective January 1, 2024, the mayor earned $12,000.00 per year and council members were paid $7,000.00 annually.

City officials are proposing to pay for the budget deficit by raising property taxes and water and sewer taxes, using fund balances to cover any shortfall.

Lee confirmed via e-mail, “The 2024 budget allocated $1,834,296.00 in fund balance. The 2025 tentative budget allocates $1,680,056.00 of unrestricted fund balance.”

She shared a 27-page presentation dated October 1, 2024 that compares the City of Oneonta with other upstate cities in terms of economics, demographics and tax levies.

“The city’s tax levy is one the lowest in the attached comparison,” Lee said.

Amsterdam, Corning, Cortland, Glens Falls, Elmira, Oneida and Rome are among the other cities analyzed in this comparison study.

Using fund balances is not a viable, long-term solution to paying for annual operating expenses that exceed revenues. It is one way to balance the budget, short-term.

Lee explained, “The city’s strong fund balance has provided for the community during a number of natural disasters, such as the flood of 2006, the flood of 2011, various snow emergencies, COVID, capital projects, etc. As a result of the strong fund balance, the city has not had to incur financing to carry the city through various financial challenges.”

“The city’s bond rating is AA-, one of the strongest possible in New York State,” Lee continued. “The city’s fund balance is the strongest” compared to other upstate cities cited in her presentation, she said.

According to S&P Global Ratings, an AA rating indicates a very low default risk and a strong capacity to pay financial commitments.

“Fund balance is the total accumulation of operating surpluses and deficits since the beginning of a local government’s existence,” Lee explained. “Since 2000, and as of December 31, 2023, the General Fund’s total fund balance (unrestricted and restricted) has increased by $8,107,316.00.”

The primary reasons for the fund balance rise in recent years was increases in sales tax revenues, interest earnings, increased departmental incomes, and savings due to staffing vacancies,” Lee clarified.

To understand how the city got to where it is today, Lee suggested some history might be helpful. COVID-19 was a major factor.

Lee shared, “During 2019, $843,517.00 of the fund balance was used due to investing over $1 million into equipment needs. (In) 2020, the pandemic hit. Due to the leadership of the excellent department heads, over $2 million of expenses were delayed due to the unforeseen consequences of the pandemic, which meant that those delayed expenditures needed to be realized in the future.

“Since the pandemic, it has taken time for pre-pandemic levels of activity to return. The 2023 budget is when the Appropriated Fund Balance of $1,121,346.00 was needed. This was not due solely to salary increases.”

Total salaries and fringe benefits, however, did increase by $804,950.00 as follows:

• Salaries increased by $300,600.00
• New York State Retirement increased by $285,375.00
• Health Insurance increased by $202,550.00
• Other fringe benefits increased by $16,425.00

When the Common Council approved these salary increases in 2023, the decision was based on a salary survey which showed that city employees were underpaid, officials said. Union contracts mandated that fringe benefits be increased as well.

According to Lee, the city works with four unions: Civil Service Employees Association Inc., Local 1000 American Federation of State, County and Municipal Employees, AFL-CIO; United Federation of Police Officers Inc., Affiliated Local 408, City of Oneonta Police Sergeants Association; United Federal of Police Officers, Inc., Affiliated Local 764, the Oneonta Police Benevolent Association Inc.; and Oneonta Professional Firefighters Local 2408, International Association of Firefighters.

Some argue that city employees have a “Cadillac plan” when it comes to fringe benefits; however, the unions negotiated those benefits. The city would have to negotiate further with each union in order to make any changes.

Lee said, “The 2024 budget increased by $1,633,927.00, $1,236,015.00 [of which] being salary and fringe benefits for all departments, with Police and Fire [representing] $955,150.00 of the $1.2 million. This is largely due to adjusting the union contract salaries closer to the market median, and the increased costs with the New York State Retirement System.”

The state retirement system mandated contributions for uniformed personnel ranges from 28.5 percent to 38.3 percent of the pensionable salaries,” Lee said.

She added, “The recruitment and retention of police officers has been very challenging due to the low pay in previous contracts, as compared to other nearby police agencies and throughout upstate New York.”

Mayor Mark Drnek, City Administrator Greg Mattice and the Oneonta Common Council have received much criticism from members of the community in recent months.

The demolition of the Water Street parking garage has angered some residents and business owners, who claim it was unnecessary and created a parking shortage.

The proposed sale of 27 Market Street to Rehabilitation Support Services is being contested, and the tenants of the Dietz Street Apartments have mixed reviews.

Maureen Daly, an artist who lives in the Dietz Street apartments, has brought concerns to the council meetings numerous times and has called the Oneonta police about illegal drug use in the building.

Oneonta needs housing. It also needs new sources of revenue that are less dependent on seasonal, summer tourism. And Oneonta needs solutions. The budget is scheduled for vote on Tuesday, December 3, as the newspaper goes to press. The next regular meeting of the Common Council is slated for Tuesday, December 17. Agendas are available online prior to each meeting.