Accounting for Utica city funds
The city of Utica is at a financial crossroads, being forced to request an unprecedented $10 million in short-term loans to pay bills and its employees. This after years of dipping into reserve and other funds, including money collected for and owed to the school district. But officials are in conflict about how to end the borrowing. Our Sarah Blazonis reports.
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UTICA, N.Y. -- When Utica Comptroller Michael Cerminaro asked the Common Council to approve a $10 million short term loan for the city, Councilman Joe Marino refused to vote in favor of it. He proposed cutting that amount in half, enough to pay city employees for two pay periods, but not enough to pay the school district money it was owed.
"My intention was, and still is, to bring to light the appalling accounting practices of the past that have clearly been swept under the rug for years, but will no longer continue while I sit on this council," said Marino.
The missing school funds were collected as taxes by the city, put into the same account as the general fund, and spent on expenses. Marino said Wednesday he expected the council to approve a second loan to make that school payment, but says the money never should've been used in the first place. He's co-sponsoring a resolution that would establish a separate account for school taxes.
The legislation states the city couldn't use any of the money in the new school account for any other purpose than paying the district. It's a plan the city comptroller says could end up taking more money out of taxpayers' pockets.
"Now we will not have those monies available for cash flow purposes, which means that we would have to entertain the thought of issuing more cash flow notes in the future," said Cerminaro.
Cerminaro said the shortage is the result of the city running out of extra funds and because a large chunk of state aid won't be received until the end of the year. The city has reached out to state leaders to send those funds early so that neither of the short term loans will be needed.