BY JIMMY LAWTON
North Country This Week

OGDENSBURG — Despite some recent good news, Ogdensburg’s finances are looking dire as the city faces an estimated $1.8 million budget shortfall.

That shortfall assumes the city would raise the tax levy by 2% or $356,235.

In a recent presentation to the City Council, Comptroller Angela Gray said the city would need to raise the tax levy substantially to close the gap, or consider more cuts.

The city however, has already made significant cuts to police and fire in recent years, a move that’s been met with harsh criticism from the public.

Council has also cut the tax levy by roughly 20% or by about $1 million in recent years.

Ogdensburg City Mayor Jeffrey M. Skelly has maintained the problem is largely due to the county’s decision to change the sales tax formula, which led to a roughly $2 million drop in revenues.

Rather than accept the county’s plan, the city chose to collect its own sales tax.

Unfortunately, the city has failed to meet its budgeted $2.6 million in tax collections.

Gray said the city is collecting between $203,000 and $205,000 per month on average, which is well below the budgeted $217,000 per month.

Skelly has also been critical of union contracts, which he says simply cost more than the city can afford to spend. The disagreement between the majority of council members and the fire union led to a lengthy legal battle with the fire union. The failed endeavor cost the city in legal fees as well as in reimbursements to the union for contract violations.

The city does have options for closing the gap, namely by leveraging the proposed $85 million hike in assessed property values.

With the 2% increase, the tax rate would drop from $16.58 to $13.06 per $1,000 of assessed value despite a $356,235 increase in the tax levy.

In order to close the gap and balance the budget the city would need to raise the rate to $18 per $1,000 which would raise the levy from $4.74 million to $6.79 million.

The city could also use fund balance to offset costs, but the city’s fund balance has been in decline and lowering it further could lead to cash flow issues.

Gray said the bottom line is that the city will need to begin working on the budget soon and will need to provide staff with guidance on how to close the gap.

When preparing the 2023 budget, then Interim City Manager Andrea Smith warned the city would need to keep a close watch on spending, largely because the city chose not to approve the 2% tax cap override.