Triple delinquency for the city

The New York State Authorities Budget Office issued their 2010 Annual Report on Public Authorities today.  The full report is available from the ABO website.

Newburgh is trebly delinquent

All three of Newburgh’s public authorities made it onto the ABO’s “Public Authority Delinquent Lists” section beginning on page 24.

The offenders are the Newburgh Community Development Agency, the Newburgh Industrial Development Agency, and the City of Newburgh Local Development Corporation.

All three failed to submit “a 2010 Budget Report in PARIS as of June 15, 2010.”  PARIS is the Public Authorities Reporting Information System, a computer system for authorities to file reports online.

Additionally, all three failed to submit “a 2009 Annual Report in PARIS as of June 15, 2010.”

NCDA•NIDA•NLDC: What’s going on?

The NCDA (Newburgh Community Development Agency) was recently voted by the council/NCDA board to be dissolved, with their assets and liabilities  transferred to the City.  Such an action would require final approval by the state legislature.  As of yet, though, there has been no bill referring to the NCDA (the successor of the Newburgh Urban Renewal Agency) appearing in either the Assembly or the Senate.  Other municipalities, Corning and Rome, have similar requests pending legislative approval, but not Newburgh.

This makes corporation counsel Bernis Nelson’s rush to transfer the agency assets a bit enigmatic.  With no bill on the horizon, why the need for speed?

Nevertheless, with a semi-dissolved agency, with governance of its assets and liabilities transferred to the city planning department, it is understandable why the NCDA would have failed to file.

The NIDA (Newburgh Industrial Development Agency) – in contrast to the other two authorities – has been actively working to get its books in order, with a board that meets regularly and auditors hired to prepare their needed annual reports.  But, as of the July 1 ABO report, they had not met their filing requirements.

The NLDC (Newburgh Local Development Corporation) is the mystery authority.  Comprised of members of the council, NCDA, and NIDA, it has not met in recent years yet continues to do business vis a vis the planning department.  (That is, business other than filing annual reports required by the ABO.)

Will the NLDC be meeting the new requirements?

In addition to the budgets and annual reports that must be filed, the ABO’s report describes changes brought about by the Public Authorities Reform Act.  New requirements for public authorities include (from page 2):

• Effective March 1, 2010 the directors of state and local public authorities, and their official designees, are required to sign an Acknowledgment of Fiduciary Duty. The purpose of this requirement is to focus board members on their legal obligations, including understanding that these duties are the means by which the board carries out the mission of the authority (See Policy Guidance 10-01 available on the ABO’s website: www.abo.state.ny.us).

• By March 31, 2010 state authority boards of directors, in cooperation with the management of the authority, were to review and consider the intended purpose for which the authority was created and to file with the Authorities Budget Office a statement defining that mission and the measures the authority would use to evaluate annually its performance against that mission. Local authorities are required to file a mission statement and performance measures by March 31, 2011 (see Policy Guidance 10-02 on the ABO web site for additional information).

• Each board is now required to perform an annual self-evaluation of its performance, measured against the authority’s mission statement, the authority’s goals and values, and the expectations of those served by the authority and the state as a whole.

• The boards of public authorities that issue debt are now required to establish a finance committee to review the authority’s proposed debt issuances; to make recommendations to the full board concerning the nature and appropriate level of the authority’s debt; and to make recommendations to the board concerning the appointment and compensation of bond counsels, investment advisors and underwriting firms.

Since the NLDC has not even met as a board, despite efforts by the NIDA to initiate such a meeting, makes it doubtful that the NLDC is compliant at this time.

July 1, 2010 | Newburgh Advocate | Tags: , , | 1 Comment »

NYS Comptroller audits city budget

Yesterday, March 24, the New York State Comptroller’s Office (OSC) issued their audit of the City of Newburgh’s 2010 budget. The audit is available to download from the OSC’s website.

In response, today the city issued the following press release:

Acting City Manager Richard F. Herbek Responds

To State Comptroller’s Press Release on City’s 2010 Audit

In response to a press release on the City’s 2010 audit issued by State Comptroller Thomas DiNapoli on March 24, Acting City Manager Richard F. Herbek commented, “It is important to note that the City of Newburgh requested this audit in order to get as clear a picture as possible of the City’s financial status. I requested the audit on behalf of the City Council in the fall at a meeting with Mr. DiNapoli’s office that Senator William Larkin and Assemblyman Frank Skartados helped to arrange. I very much appreciate their assistance in setting this process in motion, as well as the assistance of Mr. DiNapoli’s office.”

In the last several months, Mr. Herbek’s efforts have been focused on gaining clarity on the many financial challenges facing the City, and obtaining expert assistance to address them, in the absence of a Comptroller.  Council approved hiring financial consultants Michael Genito and Dwight Hadley to help review the City’s finances, and recently extended Mr. Hadley’s contract so he can continue to assist new Comptroller Christine Mitchell.

Some of the budget issues that came to light were overestimated revenues, including payment in lieu of taxes, appropriation of an unsubstantiated fund balance for expenditures, and underestimated debt service payments.

The current financial crisis is “the City’s number one priority,” he said. “We know that 2010 and 2011 will continue to present cash flow issues, and along with Council, the City Comptroller, and Mr. Hadley, we will continue to carefully review expenditures and revenues.” The City’s outside auditors have completed the 2008 audit, and will soon begin working on the 2009 audit, which should give a clearer picture of the City’s finances, he said.

He added, “The City will begin work on the 2011 budget shortly, and is also taking steps to institute deficit financing. We will be working constantly to achieve a structurally balanced 2011 budget.”

March 25, 2010 | Newburgh Advocate | Tags: , , | 1 Comment »

Q and A with the Office of the State Comptroller

financialwhirlwind

Q and A with William P. Reynolds from the Office of State Comptroller Thomas P. DiNapoli

NA: On August 18, 2009, Anthony J. Dolan, CPA sent a letter to Charles Emberger, then City of Newburgh Comptroller, which states that “your annual financial report for the fiscal year ended December 31, 2008 remains delinquent.”

1. Has the City of Newburgh complied with Mr. Dolan’s request and filed its 2008 annual financial report?
WR: Our records indicate that the City filed its 2008 annual report on 10/1/09.

I also have some questions regarding the “Constitutional Tax Limit Instructions for Cities” PDF from your website.

2. Am I to understand that if the information regarding constitutional tax limit and how it is calculated is included in the annual budget no separate form with the state need be filed?
 A separate tax limit form is required to be filed. The tax limit form for the 2009 fiscal year was filed on 2/19/09 [for Newburgh.]

3. To that end, is the last time the constitutional limit was calculated for Newburgh when the 2009 city budget was approved and filed with the state–or is there any more recent state filing of Newburgh’s constitutional tax limit?
 The constitutional tax limit was last calculated for the 2009 budget. The 2010 form is due at least 10 days prior to budget adoption.

4. I noticed on page two of the PDF document referenced above states that “At the same time, if property values decline overall, the tax limit will decline as well.”  How is this calculated, and, for example, would the recent bottoming out of the real estate market reflect a change in the tax limit?
 The tax limit is calculated by taking 2% of the five-year average full valuation as noted on page 3 of the PDF document (http://www.osc.state.ny.us/localgov/finreporting/cities.pdf). Each year’s full valuation is calculated by dividing the annual assessment roll by an equalization rate set by the Office of Real Property Services. If the five year average declines as a result of decreased property values, then the tax limit will also decline.  However, because the tax limit is based upon a five-year average, changes will occur incrementally.

November 6, 2009 | Newburgh Advocate | Tags: , , | No Comments »
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