OFFICE OF THE MAYOR

________________________
Stephanie A. Miner, Mayor
April 8, 2015

Common Council Members

City Hall, Room 314
Syracuse, NY 13202
Honorable Members of the Common Council:
Pursuant to Article VI, Chapter 1, Section 6-102 of the City Charter, I hereby transmit to you the budget I have
approved for the City of Syracuse and the Syracuse City School District for the period of July 1, 2015 through
June 30, 2016.
Overview:
Each budget cycle offers the City administration a chance to review its programs and services along with the
associated revenues and expenditures. Faced with the difficulty in providing essential services with stagnant
revenues, departments were challenged to tighten operations and work within budgetary constraints. The use of
reserves continues despite these efforts. The City has used reserve funds to balance its budgets in the last four
out of five years and this is the third consecutive year.
The School District has increased the amount of reserve funds applied to this years budget in order to preserve
programs and the level of service required in our community. For 2015-2016, they are projecting the use of
reserves in the amount of $25 million. The City is projected to use $9.2 million of its reserves to balance its
budget. Total City reserves at the beginning of FY 2015 are $69 million. Reserves will decrease to $54 million
with the projected use of $15 million for 2014-2015. The addition of $9.2 million in this budget as presented
will bring it further down to $44.8 million. An infusion of new revenues through growth or an increase in state
aid is essential to stay fiscally sound and stem the use of these reserves in future budget cycles
The 2014-15 budget contains a total appropriation of $674,966,313. Of this amount, $283,763,059 (42%) funds
City operations and $391,203,254 (58%) is allocated to the Syracuse City School District. The Citys budget
will have a decrease of 1.7% or $5.1 million over the current fiscal year. The School Districts budget will
increase $15.9 million or 4.2% over the current fiscal year.
The City tax levy will increase $64,404 to $33,928,036 due to an increase in assessed valuations on City
property. The School District tax levy will increase $81,744 to $64,388,976 also due to an increase in assessed
valuation on taxable property assessed on the School District.
This budget does not include a property tax rate increase or an increase in fees charged for water and sewer
services.
203 CITY HALL SYRACUSE, N.Y. 13202-1473 (315) 448-8005 FAX: (315) 448-8067
WEB PAGE: www.syrgov.net

City Revenues:
Sales tax, State AIM aid and property taxes compromise 83% of total City revenues. Sales tax is the only area
of revenue growth. It is projected to increase $2.7 million to total $85.2 million for FY 2016. A 2.5% growth
factor together with the formula change in the increased percentage of the one percent portion under the sales
tax agreement with Onondaga County resulted in an overall 3.2% total growth rate.
FY 2016 represents the last formula change under the sales tax agreement. Future increases will be solely based
on sales tax growth factors.

State AIM aid will remain at its current level of $71.8 million. AIM aid has remained at the same funding level
for five consecutive years.
The City property tax levy will be $33.9 million.
Other highlights on the revenue side of this proposal include:
-

$595,000 increase for new PILOT and shelter rent agreements for nonprofit properties. The City
negotiated four new shelter rent agreements in FY 2015.

$472,000 increase in building permits to account for major construction projects such as the Hotel
Syracuse, Excellus, Sibleys, and Syracuse Savings Bank buildings, new apartment construction on
Remington Avenue and the continuation of the Inner Harbor build out.

$5.2 million for payment of prior years taxes and associated fees and penalties for increased efforts to
collect from delinquent property owners under threat of foreclosure and transfer to the Greater Syracuse
Property Development Corporation.

$155,000 increase in annual alarm fees due to implementation of Ordinance #250-2014

$465,000 increase in revenue for City owned parking garages and parking meters. New revenue control
equipment, implementation of Whoosh!, the downloadable mobile app to pay for parking meters as well as
an increase in downtown residential living and entertainment have increased the demand for parking.

$400,000 decrease in NYS highway aid for street structures and pavement improvements. This
reimbursable revenue account is based on previous years completed projects.

$898,000 decrease in the estimate of 2015-2016 Uncollected City and School Taxes. As tax delinquent
properties have been foreclosed and transferred to the Land Bank their status changes to a tax exempt
property. Taxes are not levied on tax exempt properties therefore the amount of budgeted uncollectible
taxes will decrease.

$110,000 increase for Parks Fees including Clinton Square due to increased participation in Parks
programs and activities.

Maintain interfund transfers of $4.3 million from the Aviation, Water and Sewer Funds.

City Expenditures:
Decreased pension payments, change in the delivery model for retiree health care and lower debt service
payments all contribute to the overall decrease in general fund expenditures. Total expenditures in the General
Fund will decrease $7.4 million from $247.2 to $239.8 million in fiscal 2015-2016.

Departmental Expenditures
The City will see an increase of $2.1 million or 1.6% in departmental expenditures from the 2014-2015 budget.
This increase is primarily generated by increases in employee wages and salaries for those covered under
negotiated labor agreements. Increased reimbursements from other funds and a $700k decrease in functional
operating expenditures are also contributing factors.

Pension Costs
The Citys projected pension expense across all funds is estimated to be $26.4 million. This represents a $2.1
million decrease over the 2014-2015 budget. The contribution rates for both the Employee Retirement System
(ERS) and the Police and Fire Retirement System (PFRS) peaked in FY 2015.
FY 2016 will see a decrease in pension contribution rates which are as follows:
ERS from 20.3% to 18.8%
Police from 27.6% to 24.7%
Fire from 32.0% to 29.0%
Budgeted expenditures are based on salary and contribution rate projections provided by the New York State
retirement system a year in advance.
Since the Citys fiscal year straddles two different State Retirement years apportionment is necessary since the
state and the city have different fiscal year ends, March 31st and June 30th respectively.
For the 2015-2016 budget, pension expense is based on the following calculations:
75% of FY 2016 NYS Retirement System projected costs
25% of FY 2017 projected costs internally calculated based on FY 2016 projected billings
The NYS Retirement System has not issued its FY 2017 projection by the time the City prepares its budget. We
calculate what we estimate the salaries will be based on the prior year and add in wage adjustments for
overtime, any contract settlements etc. Expected long term retirement contribution rates are projected to stay
flat for FY 2017.
The City will continue to pay its pension obligations in full and will not elect to amortize payments currently
allowed under the States Pension Stabilization Programs.

Healthcare Costs
Healthcare expenditures for both active and retired employees continue to rise slightly across all funds. The
City spent $44.8 million for the fiscal year ending June 30, 2014 and is projected to spend $45.6 million in the
current year. The estimate for 2015-2016 is $46 million.
Trend assumptions and inflationary factors of 6% for medical claims and 10% for prescription drugs were used
in our gross calculations.
We have been able to temper the increase with the following cost reduction measures:
In January of 2015 all Medicare eligible members were transitioned over to a fully insured
Medicare Advantage Plan administered by Humana Insurance Company.

Implementation of an Employer Group Waiver Plan (EGWP) for prescription drug benefits paid
on behalf of all Medicare-eligible retirees. This assures maximization of all government and drug
company available subsidies.
Increased contributions under all bargaining unit contracts.

Since the City is self-insured for all healthcare costs, including medical, dental and vision it has no control over
the amount or the severity of medical claims. These costs will continue to rise as active employees become
retired employees and new employees are hired to replace them. Any achievement of future cost reductions will
require a change in plan design which must be negotiated with the labor unions.
There are currently 8,068 participants in the plan.

Expenditure assumptions include:

-

A $1.5 million commitment to the Say Yes to Education Foundation.

$2.6 million increase in salaries and wages for employees under negotiated contracts.

$1.5 million in continued funding of the Greater Syracuse Property Development Corporation.

$80,000 in funding for Tomorrows Neighborhood Today

$50,000 in continued funding for Literacy Coalition of Onondaga County to foster childhood literacy
citywide.

$301,000 reduction for system integration services in the Internet and Networking Services account.

$250,000 for housing demolitions.

Judgment and Claims account will continue to be budgeted at $1,000,000.

$0 in allowances for negotiated wage increases. Since January 1, 2015 Firefighters Local 280 are
operating without a contract. The School Crossing Guards have been without a contract since July 1,
2011 and as of January 1, 2016 all seven remaining bargaining units will be out of contract.

Cash Capital spending at the recommended 2015-16 level of $3.5 million per the approved City Capital
Improvement Plan.

$3.9 million decrease in transfers to the Debt Service Fund to account for reduced principal and interest
payments on bonded debt.

New Office of Innovation funded through a grant from Bloomberg Philanthropies. An Innovation Team
is tasked with finding creative and innovative solutions to pressing City problems.

All funding for the Board of Zoning Appeals, Board of Assessment Review and Summer Employment for AtRisk Youth has been transferred to the operating departments that administer these programs.

Mid Term Update

In late March, a binding interest arbitration panel awarded members of Firefighters Local 280 a retroactive two
percent wage raise for 2013 and 2014. It must be paid out by June 30, 2015 to avoid penalties. The cost of this
award is estimated at $2.6 million for the Citys general fund. The mid-year report did not take this expenditure
into account.
The mid-year report for 2014-15 that was filed with the Council on March 15, 2015 reported sales tax revenue
had increased over budgeted amounts by $241,400. The April 3, 2014 sales tax receipt of $14,027,442 was
1ower than budget. Annual sales tax revenue will now be adjusted to reflect a breakeven point for the year.

Special Funds:
The 2015-2016 budget requires no increase in the water and sewer rates. The current revenues generated by
each fund are sufficient to sustain operations.
The operating certificate for the Syracuse-Hancock International Airport was transferred from the City to the
Syracuse Regional Airport Authority (SRAA) on March 3, 2014. This transfer marked the final step in the
process to transition the airport to an independent public benefit corporation. The Aviation Enterprise Fund will
continue to exist as its employees will remain City of Syracuse employees until such time new bargaining
contracts are negotiated with the unions. These negotiations are currently in process.
The Citys General Fund will continue to receive cost reimbursements for services performed and the amount
of debt service to be paid on outstanding Airport bonds. All Airport bonds issued by the City remain the
obligation of the City. The City will recognize as revenue these payments from the SRAA to the City.
The Downtown Committee and Crouse Marshall Special Assessment rates will remain at the same funding
level as in previous years.

City School District:

The School District has submitted a proposed budget of $391,203,254 that was voted by the Board of Education
on March 19, 2015. This represents a 4.2% increase over the prior year. The proposed budget is balanced based
on the assumption that an additional $12 million in Operating Aid will be granted. To date, the State has just
released the school aid runs and the District is evaluating the effect on the proposed budget. Components within
both the revenue and expense sections are expected to change to recognize changes in State funding, use of
Fund Balance and to make related updates to expenditures maintaining a balanced budget.
These changes will be made through Council amendments during the Budget approval process.
The 2015-16 proposed budget also proposes the use of one time revenues including $25 million in fund balance.
Additionally, the Districts request to use $31.7 million in State Chapter One accruals is included in the
proposed revenue plan. There is no increase in this amount from the previous year.
An additional fiscal challenge this year has been the reduction and expiration of several grants, including
School Improvement Grants, Teacher Incentive Fund, and Race to the Top. Expenditures to support these
programs will either be reduced or shifted to the General Fund.
The Board of Education will be adopting its final budget at their April 15, 2015 board meeting.
5

This budget proposal includes the following highlights:

- Additional $12 million in State Aid will fund following initiatives:
$1.5 million-Services for English Language Learners
$2.0 million-Robust Career and Technical Education (CTE) programming
$2.0 million-High Quality Alternative Education Programming and Systems of Support
$5.5 million-Investment in Priority Schools
$1.0 million-Blended Learning Environments
-

70 new positions, 52 represent instructional staff

$1.9 million increase for payments to charter schools for their increased enrollment

District expenditures will increase 4.2 % or $15.9 million in the following areas:
o $9.6 million increase in salaries
o $1.6 million reduction in employee benefits
o $1.7 million increase in supplies and equipment
o $12.8 million increase in Contractual Expenditures
o $6.6 million reduction in Debt Service and other expenses

The District is currently negotiating new contracts with all bargaining units with the exception of the administrators
union. That contract will expire in July.

A tabular comparison of the 2014-15 and 2015-16 School budgets is displayed on page 289 of the budget.
Conclusion:
The City of Syracuse has made a significant progress in meeting the new challenges facing our community.
From dynamic investments in programs like Say Yes to Education and the Land Bank to making efficient
choices with healthcare and pensions, the City of Syracuse is a growing city on the move. Innovation and ideas
are the new way of leading a government and making decisions for a twenty first century city and Syracuse will
continue on our path of progress. The City will continue to exercise discipline over our finances and advocate
for fundamental reform and support on the state and federal levels.
As you begin your schedule of committee meetings and deliberations, I pledge my full cooperation, and that of
my staff, to assist in your review.
Sincerely,

Stephanie A. Miner
Mayor