Purpose of Budget Review
The purpose of our budget review was to determine whether the significant revenue and expenditure projections in the City’s preliminary budget for the 2017 fiscal year are reasonable.
The City of Glen Cove, located in Nassau County, issued debt totaling $12.8 million to liquidate various accumulated fund deficits for the fiscal year ending December 31, 2006. New York State Local Finance Law requires all local governments that have been authorized to issue obligations to fund operating deficits to submit their proposed budget for the next fiscal year to the State Comptroller for review while the deficit obligations are outstanding.
- City officials are projecting operating surpluses for the 2016 fiscal year totaling $990,296 in the general fund and an operating deficit totaling $54,816 in the water fund.
- The City projects that, as of December 31, 2016, it will have a combined unassigned fund deficit totaling more than $4 million in the general, water, and golf and recreation funds.
- The City included $3.9 million in revenue in the 2017 proposed budget from the sale of waterfront property and City officials were unable to provide any definitive documentation that the sale will take place during the upcoming year.
- The City has budgeted $1.9 million for building permit revenues, an increase of $520,536 over the 2016 estimate. This increase is associated with building permit applications that are part of the waterfront property development which may not occur in 2017.
- The 2017 proposed budget contains no appropriation for the payment of tax certiorari refunds, which have averaged $923,000 over the last five years. City officials told us they intend to use debt to finance tax certiorari settlements.
- The City’s proposed budget complies with the tax levy limit.
- The City should avoid using nonrecurring revenues, such as proceeds from the sale of real property, to fund recurring operating expenditures. The City Council should review this revenue and determine whether it is likely to be realized during 2017.
- City officials should treat tax certiorari costs as routine expenditures and pay them from annual appropriations.
- City officials should continue to monitor the financial position of the water and golf and recreation funds and implement a financial plan that provides for the gradual elimination of the fund deficit.