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Purpose of Budget Review

The purpose of our review was to complete an independent evaluation of the City’s tentative budget for 2026.

Background

Chapter 176 of the Laws of 2025 authorizes the City of Little Falls (City) to issue debt in an amount not to exceed $3.4 million to liquidate deficits in its general, water and golf funds as of December 31, 2025. This debt can include the remaining principal amount of any budget notes, deficiency notes and/or revenue anticipation notes outstanding at the time the deficit bonds or notes are issued. New York State Local Finance Law Section 10.10(d) requires the City to submit to the State Comptroller each year, starting with the fiscal year during which the City is authorized to issue deficit obligations, and for each subsequent fiscal year during which the deficit obligations are outstanding, its tentative budget for the next succeeding fiscal year. The tentative budget must be submitted to the State Comptroller no later than 30 days before the date scheduled for the Council’s vote on the adoption of the final budget, or the last date on which the budget may be finally adopted, whichever is earlier.

Key Findings

• The tentative budget includes revenues of $966,599 for revenue sharing State Aid, $480,000 for garbage collection user fees, $177,000 for the sale of real property, $350,000 for ambulance charges, $60,000 for the sale of timber, $1.4 million for metered water sales, $1.6 million for sewer rents, and $138,500 for golf revenues. These revenues may not be reasonable.
• The budget does not include a contingency appropriation in any fund. It would be prudent to have contingency spending in all operating funds available for unforeseen increases in expenditures or revenue shortfalls.
• The budget includes approximately $1.16 million in debt payments, which are likely overestimated by $37,327.
• The budget includes retirement appropriations totaling approximately $1.3 million for members of Employees’ Retirement System (ERS) and the Police and Fire Retirement System (PFRS). The budget also includes appropriations totaling $161,398 for workers’ compensation costs. These appropriations were not properly allocated to each of the operating funds.
• The City has three different collective bargaining agreements with employee unions which expire on December 31, 2025. While officials did include additional appropriations in the 2026 tentative budget for potential salary and wage increases, they should be mindful of the potential financial impacts of contract settlements on the City’s budget and financial position.
• For 2025, the City exhausted 79.84 percent of its constitutional tax limit.
• The City’s 2025 tentative budget includes a tax levy of $4,036,472, which is within the tax levy limit.

Key Recommendations

1. Adopt a structurally balanced budget that includes realistic estimates and funds recurring expenditures with recurring revenues.
2. Review the tentative budget estimates for revenues and appropriations and amend them as necessary.
3. Allocate appropriations identified in the budget review to the appropriate funds.