CITY OF UTICA OFFICE OF THE MAYOR 1 KENNEDY PLAZA UTICA, NEW YORK 13502 PHONE: (315) 792-0100 ROBERT M. PALMIERI MAYOR
To:
City Clerk Michelle George President Michael Galime Members of the Common Council
From:
Mayor Robert M. Palmieri
Subject:
Veto Message for FY 2018-2019 Budget Amendments
Date:
March 22, 2018
I commend the Members of the Council for their diligence in examining the budget. I’ve had the pleasure of speaking with the majority of Council Members throughout the entire budget process. I appreciate their hard work and dedication for the betterment of our residents. After thoroughly reviewing the twenty-one budget amendments that were passed by the Common Council at their March 20th meeting, I am issuing the following veto message for one amendment, ordinance F14. Ordinance F14 increases the City’s use of fund balance by $300,000. The Administration utilized $750,000 of fund balance to pay off a one time, expiring and non-reoccurring expenditure. The allocation of any additional fund balance will compromise and damage the City’s financial position. I enclosed Budget Director Heather Mowat’s March 14th memo that was shared with members of the Common Council as to how the utilization of any additional fund balance can negatively impact the City. Specifically, the memo references two separate reviews from Moody’s and Standard & Poor’s Global in which both financial institutions clearly state the factors which can
cause the City’s credit and/or financial outlook to be downgraded include the use and drawdown of reserves (fund balance). If the City’s credit rating were to be downgraded, it would have a significant ripple effect for taxpayers as they would end up having to pay higher interest rates on the City’s debt. For example, as stated in the March 14th memo, in January of this year the City of Utica and Town of Oyster Bay issued similar debt amounts for 15 years. Due to the fact Utica had a better bond rating and thus a better interest rate, we will pay approximately $600,000 less in interest payments over the life of the bond. Having interacted with all three leading financial institutions, coupled with the City earning credit rating upgrades over the past six years, I know the utilization of an additional $300,000 would not be seen favorably. I have worked closely and consulted with Comptroller Bill Morehouse, and he has expressed the same concern and sentiment regarding this important issue. As Mayor, I have an obligation not to do what is politically expedient, but rather to govern responsibly and act in the best interest of the City. In that spirit I cannot in good faith support an amendment which will have such an adverse impact on our overall fiscal health. For these reasons, ordinance F14 is met with my disapproval.