KINGSTON, NY – The City Council has unanimously voted to use $1.59 million of its fund balance to purchase equipment already included in the city budget and to pay down short-term debt.
The legislators passed the plan, presented by City Treasurer John Tuey, by an 8-0 vote and without discussion at their meeting on Tuesday, August 6. Robert Dennison, D-Ward 6, was absent from the hearing.
Tuey estimated in July that taking the $1.593 million from the fund balance would help save $200,000 in the budget next year. He previously said the city ended 2023 with an unallocated fund balance of $11,650,249, which would be 22.23% of the $53 million city budget.
Tuey told lawmakers last month that the city’s cash balance policy requires lawmakers to take action to reduce the cash balance to 13 to 20%, or just over $1.6 million.
The council has approved the withdrawal of funds to maintain the fund balance in the range of 13 to 20 percent in 2021, 2022 and 2023, he added.
Tuey said in July he requested $1.593 million because the City Council had already approved using $200,000 to pave a difficult section of Broadway between Foxhall Avenue and Delaware Avenue in Midtown.
Majority Leader Reynolds Scott-Childress had previously stated that the funds had been used in the past, among other things, to purchase police vehicles – whose lifespan is remarkably short at three years – and to pay off short-term debts.
At the Finance and Audit Committee meeting in July, in response to questions from the public about why the fund balance could not be returned to taxpayers, Scott-Childress said it was not that simple.
He said the city does not have the method, the refunds would cost “huge amounts of money” and it helps reduce the city’s future tax revenue. “Basically, it reduces residents’ taxes because we don’t have to pay back short-term debt,” Scott-Childress previously said.
Tuey pointed out that if this plan is not implemented, taxes would have to be raised by the same $1.593 million. “That alleviates the need to do that,” he said. “As long as the economy is strong, this is a measure you’ll see year after year until we get below that 20%, which will happen at some point.”
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