County of Ulster, NY
2023 Proposed Budget Analysis & Review
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View 2023 Proposed Budget
CMA focused on a series of targeted key departments, agencies or functions of the County. Such targets either constituted a large percentage of the services provided by the County or were deemed important for review by CMA, the County or both. The Review and recommendations concentrate on the 2023 Proposed Budget.
During the evaluation period, CMA conducted several videoconference interviews with County officials, performed a comprehensive review of available financial documents, accumulated data on comparable municipalities for the benchmarking of financial and personnel matters and participated in conversations with various industry professionals.
In a typical year, fiscal trend analyses would serve as both the starting point and foundation for conducting the various reviews associated with the 2023 Proposed Budget. However, the ongoing effects associated with the COVID-19 pandemic in conjunction with a forecasted recessionary economic period continue to complicate the “traditional” forecasting process. As such, fiscal trending alone will not provide for an adequate measure of the various forms of risks and uncertainties associated with the upcoming 2023 fiscal year. Current and projected economic conditions must be considered. For the purposes of this review, trend analyses are being considered along with peer benchmarks and budgetary variance analyses to assist in identifying key areas of risk.
The findings in the Review were based on assumptions deemed to be reasonable and customary. Nevertheless, any associated cost savings or revenue generation resulting from each initiative should be considered approximate and subject to revision, as necessary. Furthermore, although quantified, the findings do not necessarily include execution plans. In certain instances, additional planning and analysis would be required.
Baseline details relative to the demographic and socioeconomic environment of the County are also provided in Appendix B of the Review. Appendix B provides a foundation for understanding the County’s local economy.
Summary of Findings
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1. Replace Payroll Checks with Electronic Deposits
2. External Shared Services Opportunities
3. Consolidation of the Central Garage and the Highway Garage
4. Contract an Energy Consultant
5. Continued Enhancement of Information Technology
6. Centralization of Grant Oversight
7. Increase Hotel Tax and Motel Occupancy Tax
8. Adopt a Local Law to Allow Tax Levy Cap to be Exceeded
9. Glossary of Terms
10. Statistical Information of Budget Document(s)
11. Design of Budget Document(s)
12. Year-to-Date Info
13. Highlights of Budget Document(s)
14. Economic Forecast
15. ARPA Revenue Loss Calculation
16. Sales Tax
17. Real Property Taxes
18. State Aid
When considering current economic conditions and Federal policies of high interest rates which may lead to more unemployment and lower inflation, and the belief by many that such actions will lead to a recession, the County should consider projecting sales tax at a level not above what will be collected this year (CMA projected $163.8 million).
19. Federal Aid
The amount of Federal aid in the 2023 Proposed Budget was deemed appropriate, however, the County should explore additional Federal grant and aid opportunities.
20. Occupancy Tax
Due to the possibility of recession, higher unemployment, and high interest rates that impact credit charges, the County should reevaluate current year occupancy tax receipts right up until a final decision is required to finalize the 2023 Budget to ensure 2022 fourth quarter receipts are not trending downward.
21. Departmental Revenues
After reviewing all revenue lines CMA has concluded that the County has been careful and conservative in developing departmental income projections.
22. Aggregate Departmental Spending
Overall, departmental spending in the aggregate was found to be conservative.
Overall, the 2023 Proposed Budget properly accounts for auto fuel costs.
Some lines for larger buildings are expected to see substantial increases, but other lines show no increase or actual decreases
25. Personnel Increases
The 2023 Proposed Budget’s proposed increase in personnel appear appropriate to deal with public demand for services, including demand related to a recessionary economic environment with potential job loss.
26. Formalize Procedures Relating to Future Hiring Freezes
In practice, the County has certain internal practices in place relating to hiring freezes. Nevertheless, CMA understands these procedures have not been formalized. Since a hiring freeze is perhaps the most strategic option to appropriately control expenditures and reduce the risk of structurally unbalanced finances, the County should adopt formalized procedures which would also enhance fiscal transparency.
CMA’s review of encumbrance use in monitoring and administering the 2022 adopted/amended budget indicates that purchase orders and encumbrances could be used more often and improve the budget monitoring process.
28. Monitor State Legislation Relating to Workers Compensation
There is presently pending State legislation relating to workers compensation that if signed by the Governor would impact related expenses in the 2023 Budget. This should be monitored closely and if signed before the adoption the Budget should be amended accordingly.
The State provides flexibility to reclassify positions. Nevertheless, the County could improve controls relating to changes in non-union management positions. Practices relating to these changes should be reviewed and internal controls should be developed.
31. Purchase Orders
32. Contingency Lines
In uncertain economic times, where many things like the potential for rising costs of fuel and supplies, increased demand for municipal services due to the potential of recession and unemployment, shortfalls in certain revenues and aid, among other impacts, are possible, the Contingency line should be funded adequately to ensure greater than expected costs and shortfalls in revenue, if they occur, can be properly addressed. The County should consider increasing the contingency line.
33. Contingency Plan or Budget Strategy
34. Revenue Analysis
35. Expenditure Analysis
36. Fund Balance Policy
37. Appropriated Fund Balance
Incorporating the information on the dollar amounts being assigned, reserved, appropriated, and the remaining unassigned amount of fund balance will make the chart on page 31 of the 2023 Proposed Budget more informative and useful.
38. Tax Stabilization Reserve Fund
Surplus funds correlating to positive budgetary variances in 2022 should be considered for deposit into the Tax Stabilization Reserve Fund or into a Legislative contingency account. This is a practice of other counties in the State and would assist the County to hedge or mitigate potential economic risk in 2023.
39. Debt Management Policy
40. November Debt
Since the November 2022 debt issuance will be sold prior to the adoption of the budget, the Legislature should confirm with the Commissioner of Finance that the debt service appropriations have been revised to reflect payments correlating to the issuance of debt in 2022.
41. Authorized but Unissued Debt
42. 2023 Capital Improvement Plan
43. Capital Improvement Plan Process
44. Bus Charging Stations
The Capital Plan includes four electric fleet charging stations and four community stations. Electric buses purchased last year presently travel a large distance to charge. Completing this project would reduce related travel maintenance costs for the buses.