NORTH TONAWANDA— Mayor Art Pappas, citing "COVID-19 restrictions, says his administration will need more time to present the city's 2021 budget proposal.
Pappas issued a press release on Monday in which he informed residents of the need for additional time to generate next year's spending plan which is supposed to be presented by Oct. 1 each year.
In his release, Pappas said a variety of factors made budgetary practices "difficult to finalize, including:
• Anticipated cuts in state aid of as much as 20%
• Lack of revenue projections from the state for 2021
• Decreases in funding for personal services which are on the rise due to contracts
• State highway assistance funding being delayed with "no feedback" on when it will be expected
• Funding being lost while expenses are contractual rising due to step increase and rates of 2%
• Minimum wage increases for part-time employees next year
• No update on Consolidated Local Street and Highway Improvement funding for the city
• Lack of assurances on stop-gap funding from the federal government
• Department heads being instructed to re-examine their budget requests due to the negative impact of the novel coronavirus.
"Residents need to understand the unusual circumstances for this year’s budget," Pappas said in his statement. "The budget and sales tax revenue by the county was on track to exceed projections before COVID-19. Therefore, a budget for 2021 will be presented when we have specific knowledge as to what our funding will be for the future year."
A scathing audit released by state Comptroller Thomas DiNapoli back in August found that from 2017 to 2019 the North Tonawanda mayor and Common Council "did not adopt structurally balanced budgets" and did not "properly monitor the city’s financial operations or take appropriate actions to maintain the city’s fiscal stability."
Among its key findings, the audit noted that the city's general fund and sewer fund experienced operating deficits from 2017 through 2019, and that despite the city’s deteriorating financial condition, officials did not establish a fund balance policy, multi-year financial plan or capital plan.
The audit also criticized Pappas and the council’s budgeting practices and "poor financial management," which have left the city in a "vulnerable financial position."
In their recommendations, the state auditors called on the city to "take appropriate action to remedy the financial condition problems affecting the city, adopt structurally balanced budgets that include realistic estimates (and) closely monitor finances to prevent further decline in financial condition."