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Purpose of Budget Review

The purpose of our budget review was to identify issues which impact the City of Yonkers’ (City) financial condition in the current and future years. 

Background

The Office of the State Comptroller, as Fiscal Agent for the City, determined that the City’s adopted budget for fiscal year 2026-27 and the related justification documents are in material compliance with the requirements of the Fiscal Agent Act (Chapter 488 of the Laws of 1976). The City’s 2026-27 adopted budget totals $1.64 billion, which includes operating and debt service funding of $822.5 million for the Yonkers Public Schools (District) and $813.6 million for the City. The 2026-27 budget is $87.1 million more than the City’s budget for 2025-26, an increase of 5.6 percent.

Key Findings

• The 2026-27 budget relies on nonrecurring funding of $147.2 million, such as appropriated fund balance, one-time State and federal funding and sale of property, to balance its budget.
• The 2026-27 adopted budget includes utilities gross receipts revenue of approximately $11.5 million; we project the City will receive $10.8 million for 2026-27. Therefore, City officials could potentially face a shortfall of approximately $708,000 if revenue estimates are not realized.
• The 2026-27 adopted budget includes real estate transfer tax revenue of approximately $14.2 million; we project the City will receive $13.5 million for 2026-27. Therefore, City officials could potentially face a shortfall of approximately $706,000 if revenue estimates are not realized.
• The City plans to borrow up to $15 million for tax certiorari settlements in the 2026-27 fiscal year. Tax certiorari is the legal process by which a property owner can challenge the real property tax assessment on a given property to reduce its assessment.
• Overtime costs for firefighting and police could potentially be underestimated by as much as $4.7 million.
• The 2026-27 adopted budget includes an appropriation of approximately $151.1 million for life, health and dental insurance; we project the City will spend approximately $152.5 million in 2026-27. Therefore, City officials may have underestimated life, health and dental insurance costs by as much as $1.3 million
• The City’s contingency reserve is 1.5 percent of the City’s general fund budgeted appropriations, leaving limited flexibility to cover any other unforeseen or unexpected costs.
• Since 2018, the City’s debt service payments have risen by $4.7 million. The City will need $90.9 million to service its debt obligations during 2026-27.

Key Recommendations

1. Replace nonrecurring revenue, such as fund balance, one-time State and Federal funding and sale of property in the 2026-27 budget.
2. Pay tax certiorari claims from annual appropriations instead of using debt. 
3. Review the estimates for firefighting and police overtime, and life, health and dental insurance and adjust them to an appropriate level as necessary.
4. Consider establishing a contingency appropriation at a level that will provide the City with adequate funding for any significant unforeseen costs.