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State board offers Potsdam ideas like dissolution for better financial outlook, with grant incentives

Posted 6/22/18

By CRAIG FREILICH POTSDAM – The village is reviewing a report from the state Financial Restructuring Board that is recommending a number of actions, including dissolving village government, to …

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State board offers Potsdam ideas like dissolution for better financial outlook, with grant incentives

Posted

By CRAIG FREILICH

POTSDAM – The village is reviewing a report from the state Financial Restructuring Board that is recommending a number of actions, including dissolving village government, to improve its financial standing.

Other recommendations include cutting payroll, replacement of parking meters, and converting street and indoor lights to LED lamps, something the village has been pursuing.

The village was offered a review of its finances by the state after was rated the state’s most fiscally stressed village in a comptroller’s analysis in 2015. The village accepted the offer.

The village arrived at a particular critical point after a series of setbacks in its attempt to get its hydropower generators up and running, resulting in substantial debt.

“The Village’s General Fund balance decreased by nearly 75 percent between 2012 and 2015 because of hydroelectric dam complications that forced the Village to make transfers from its General Fund to its Hydro Fund, the report notes.

The Restructuring Board’s report notes that the village’s outlook has improved since then, but it still has several recommendations it believes will improve the situation further.

There are some specific recommendations for which “the Board may, in its sole discretion, award a grant,” such as eliminating its police dispatchers and upgrading its parking meters, and less specific actions such as implementing a shared-services plan with other municipalities.

“The Board recommends that the Village transfer dispatching to the County of St. Lawrence. If the Village agrees to abide by and implement this recommendation, the Board may, in its sole discretion, award a grant of up to $250,000 to assist the Village and the County with implementing such action,” the report notes.

Similar but less specific grant offers are made if the village upgrades its “parking meter infrastructure, and if it will “continue to implement additional efficiency actions that will lower the annual cost of providing specific services.”

The report emphasizes a cut to payroll expenses – to “implement workforce actions that will lower the Village’s annual cost structure.”

One such measure the village Board of Trustees is exploring is cutting the number of paid fire department drivers from four to three for two months this summer.

“We’re exploring every angle, every possibility, in every department,” said Village Administrator Gregory Thompson Thursday.

One angle is the proposal to dissolve the village government, a proposal which was explored and put to a vote in 2011, going down to defeat. One of the stumbling blocks to its approval was the notion of abandoning village services such as the police department to be taken up by other agencies, such as the Sheriff’s Department or the State Police, both of which declined at the time to commit to taking up the responsibility.

In a chart showing services provided by county, school district, town and village governments, many functions, such as payroll accounting and budget and finance control, are provided by each entity for itself, and several other functions are handled by more than one of those entities. The chart suggests that there are “opportunities for additional shared services,” where one entity such as the county could provide a service to other entities with possible savings. The chart does not include local responsibilities that could be transferred to Albany for net savings.

The report figures the village could save $140,000 a year by letting go its four dispatchers and having the county take over emergency dispatch for the village police. “The downside to this solution is that Village would no longer have a dispatcher downtown. But the Board believes that Potsdam could achieve the same level of police presence by deploying an officer downtown during times of high activity, such as Friday and Saturday nights, when there is the most college student activity,” the report says.

Financial Restructuring Board’s report includes some statistics that guided it in its considerations.

“The Village of Potsdam is a large upstate village in St. Lawrence County. With a population of 9,428 as of the 2010 Census, it is the 43rd most populous village in New York State and the second most populous village in St. Lawrence County. 2016 expenditures of $10.4 million were the 75th most of villages in the State and the second of villages in the County, the report noted.

It also said that the “Average Full Value Property Tax Rate (2011-2015) of $14.81 per $1,000 is above $7.28 per $1,000 – the 75th percentile for all municipalities. This is the 199th highest for villages.”

The Board is chaired by the Budget Director and includes the State Comptroller, the Attorney General, the Secretary of State, and six other members appointed by the Governor.

The report can be seen at https://frb.ny.gov/recsDeterms/reports/VillageofPotsdam-ReviewReport.pdf