City continues to weigh financial options


Declaring bankruptcy or surrendering the city accounts to the state have been outlined as possible options when it comes to restoring Amsterdam's finances.

The city has still not filed its annual update document (AUD), a required report to the state that details actual expenses and revenues. The document is now nearly a year late. Currently, the state comptroller's office is performing a procedural audit of Amsterdam's government accounts.

The other two options, according to David Mitchell, deputy controller, are hiring a firm to handle the finances, or keeping the city operational by working on the finances along the way. Mitchell said he advises the city to choose the latter route.

"I feel you should take a targeted approach to this and keep the city running as is," Mitchell said. "However, that is my opinion and I don't want to influence the council one way or another."

Mitchell said by taking a targeted approach, officials will concentrate on one area at a time, correct the books of that area, and find the fund balance. Then they will move on to the next area.

Declaring bankruptcy would put everyone on equal ground -- the city, the unions, the bond holders and all the vendors, Mitchell said. However, in the long run, interest rates on bonds will rise and long-term expenses will not disappear.

If the city surrenders the accounts to the state, the Common Council would be rendered ineffective. Under this option, Mitchell said, city residents' taxes would "go through the roof."

First Ward Alderman Joseph Isabel asked Mitchell if the city is in any "immediate danger" in which some of the other options would be necessary.

"From what I've seen, we should be able to meet our obligations as we go along," Mitchell said.

The Common Council spent time during its regular meeting Tuesday discussing options for moving forward. Third Ward Alderwoman Gina DeRossi asked for the council's approval to bring in an accounting firm with local ties to consider how it can meet the city's needs.

Though Mayor Ann Thane asked that they meet with Mitchell prior to addressing the matter, Fourth Ward Alderman David Dybas said the council needs to be involved throughout the process.

"I would whole-heartedly suggest that the whole council as a whole be present with David [Mitchell] so we can get on the table what needs to be done," Dybas said. "I want the council involved in this, because as you all know, it is the council that is responsible. Not Mr. Mitchell. Not the mayor. The council."

Dybas introduced a resolution earlier this month that would authorize the services of an outside accounting firm. That proposal was tabled due to low attendance on the council's part. On Tuesday, it was approved unanimously.

"This was put out there as a C-Y backside," Dybas said. "A cover your backside. The result of the state audit is not going to be very complimentary. That is my opinion, I hope I'm wrong. ... It covers us in saying that we have taken some action. Some action is better than sitting here doing nothing, which this council has done for the two years I've been on it."

Thane said that because the council hired Mitchell as deputy controller, she doesn't agree that it has done nothing for the past two years.

Mitchell was also hired as the "expert in this area," according to Thane, and she suggested that advice on the matter be requested from him.

Later in the meeting, 5th Ward Alderman Richard Leggiero raised a resolution to amend the budget to pay Tom Kubricky Co. for emergency sewer repairs on Academy Street in April. According to the resolution, more than $137,000 from a FEMA payment was incorrectly credited to the sewer contingency fund.

The funding should have been credited to the contractual fund. However, a line following the budget change, interjected by Corporation Counsel Gerard DeCusatis, stated there are insufficient funds for this proposal.

"Why would we even be presented with a resolution that says entry errors exist and that FEMA payments were credited to contingency?" Dybas asked. "This gets me exactly to the point I was making about our system. We don't know if we're on foot or horseback. But go ahead. Approve it."

The resolution was tabled until the next meeting.

Another resolution to hire an accountant to reconcile projects from 2009 to the present, recommended by Mitchell, was tabled. Until the council meets the firm DeRossi is working with, the council said it will hold off on a decision.

The group is working to arrange a special meeting Monday or Tuesday night with the accounting firm.