$4.2 Million Grant: Good News or Fiscal Time Bomb for the City?

Earlier this year, the Saratoga Springs Public Safety Department applied for a Federal Emergency Management Agency (FEMA) grant for funds for additional firefighters for the city, primarily to staff the new fire station being built on Henning Road. The proposal was to fund sixteen new firefighters for three years. The good news is the application was successful, and FEMA awarded the city $4,154,523.52. The bad news is the city may not actually be able to afford this grant.

The problem with the grant is that the city must maintain all these positions using city money for the two years following the end of the grant.

In addition, as this page from the award letter documents, the grant funding is only for salaries and benefits. Uniforms, training, etc., are not included, so these costs for the 16 new employees will have to come out of the city budget during the years of the grant.

This is a breakdown of salaries:

I am unclear how the grant determined the indicated increased costs for these positions each year, but in the fourth year, the city will be required to pay north of $1,500,000.00 out of its own budget to sustain these positions and, in the following year, more.

These are stunning numbers. Remember, this number only indicates the costs that will have to be added to the budget for the salaries and benefits for the 16 new firefighters. This number does not include the continued associated costs for equipment, uniforms, and training.

How Can This Work?

My experience with the Saratoga Springs Fire Department has been outstanding. We have great men and women working for us who deserve our support. I would like this all to be possible.

I simply do not see, however, how we will be able to maintain all these positions when the grant runs out without draining the resources we will need to provide raises for the existing city employees, maintain the basic services for the city, and protect our A+ bond rating.

To put this in perspective, let’s consider if the city on its own decided to include the salaries and benefits for these 16 positions in the 2023 budget. The city would need to find an additional $1,295,547.52 this year. I would like Commissioner Sanghvi or Commissioner Montagnino to explain how they would find this money. If they can’t, then how would they pay for these positions in three years when the grant runs out?

As former Finance Commissioner Michele Madigan warns: (see her complete remarks below)

Positioning our small city budget to handle the additional $4.15M plus (wages, benefits, and the costs of funding 16 firefighters will increase each year) following the completion of the grant might require no additional new hires for any other department for the foreseeable future. This will leave city taxpayers on the hook for increased costs associated with the hole left in the budget when the SAFER Grant ends…. If there is future planning for this requirement, it has yet to be revealed to the public. 

I find it extremely concerning that there has been no discussion regarding how the city will pay for the positions once the grant runs out.

I am willing to have my concerns proved to be baseless. I wrote to Finance Commissioner Minita Sanghvi over a week ago asking how the 2026 budget could absorb these costs. Commissioner Sanghvi has not responded to my inquiry.

Montagnino’s Folly?

Commissioner Montagnino apparently did not consider any of these long-term issues when he sent in the application for the FEMA grant, nor did he bother to consider any of the more fiscally responsible plans Michele Madigan had developed to address the need to staff the new fire station. (see Madigan’s remarks below)

Commissioner Montagnino enjoyed extremely favorable coverage from both print and television media in announcing the grant.

Montagnino responded in the September 22, 2022, Daily Gazette as to how he planned to pay for the position once the grant ran out by lashing out at the previous Council with false allegations.

“Our entire City Council is new — this is our first year in office,” he said. “We inherited a setup where there is no plan for the future. In fact the budget for this year — the 2022 budget — was based on projections that were inaccurate and exaggerated. So, we’re in the process of preparing next year’s budget and are really having to sharpen our pencils to come up with next year’s budget. We’re hoping to have something like a three-year plan worked out in the course of the next year, so we’re not running from one year to the next scrambling for funds.” 

Daily Gazette

I don’t know when Commissioner Montagnino will stop blaming the current Council’s problems on the previous administration.

This attack seems particularly hollow. Finance Commissioner Michele Madigan’s ten-year record is exemplary. During her tenure, the city controlled taxes while maintaining city services. She earned the city an A+ bond rating. She was praised by the New York State Comptroller for her management of the city’s finances. She did all this while the city struggled with a devastating fire in city hall and a fiscal crisis precipitated by COVID.

Commissioner Sanghvi has repeatedly credited Ms. Madigan with the strong financial health of the city.

Montagnino’s gratuitous attack that the previous city council did not plan for the future when it adopted the budget for this year is false. It is regrettable that the Daily Gazette did not press Montagnino for the basis of his attack or contact Michele Madigan for a response.

The FEMA grant is not Commissioner Montagnino’s first fiscally irresponsible act. Readers may recall that in his campaign to reduce the current twelve-hour shifts of the police, he negotiated a memorandum of understanding (MOU) with the Saratoga Springs Police Benevolent Association. To get the shift hours reduced, he basically approved a wish list from the PBA. In an earlier post, I explored this agreement. Commissioner Montagnino seems uninterested in the fiscal limits of our city government.

This time Commissioner Sanghvi pushed back, and since June, the proposed MOU seems to have disappeared.

Michele Madigan On Fiscal Planning

[JK: The following is a statement from former Finance Commissioner Michele Madigan regarding the potential long-term impact of the FEMA grant on the city’s finances]

This city has been blessed to have dedicated and knowledgeable staff that I relied upon in doing budgets. Lynn Bachner, the city’s budget director, was especially key, but it required the assistance of the management staff in all the departments. Together we ensured our city’s operations, maintained stable tax rates, and left the city in excellent financial condition after an unpredicted and unpredictable pandemic.  Most importantly, essential city services such as police and fire were intact, well-funded, and serving the public throughout the entire economic crisis.

Concern should be reserved for the next city budget that this Council will seek to approve for the taxpayers of Saratoga Springs, as well as the budgets and the state of city finances that will be left beyond its term.

A $4.15M grant is inarguably good news; at issue are the stipulations that come with the grant. This grant, which covers certain costs for 16 new firefighters, comes with the promise that all of these newly hired firefighters must remain for a designated time on the city payroll [JK: two years] following the completion of the grant. If there is future planning for this requirement, it has yet to be revealed to the public.  This is “no plan for the future.”

2022 new hires have been extensive; 2023 requested budget new hires, replacements, and upgrades were at an all-time high.  Moreover, obligations and processes long since established have been overlooked or ignored.

In the face of the long-awaited third Fire/EMS station, prior administrations presented carefully designed plans to successfully address how and when to staff the fire department within the reality of city finances.  I personally worked with prior Fire Chief Robert Williams and the current Fire Chief Joe Dolan, as well as prior Commissioners Mathiesen, Martin, and Dalton, Deputy Commissioners Finneran, Daley, Sharp, and Bachner. The 2022 Budget included funding for 4 new firefighters, and many prior budgets under my administrations included additional firefighters and police.  We took public safety and fiscal responsibility seriously.

It follows that, while I understand that the Local Fire Fighters Union has embraced the concept that safety demands 4 firefighters working on each engine for every shift, this may have to be introduced with restraint and discipline in order to be sustainable.   

Positioning our small city budget to handle the additional $4.15M plus (wages, benefits, and the costs of funding 16 firefighters will increase each year) following the completion of the grant might require no additional new hires for any other department for the foreseeable future. This will leave city taxpayers on the hook for increased costs associated with the hole left in the budget when the SAFER Grant ends, a concern that Commissioner Sanghvi has raised many times regarding the American Rescue Act (“ARA”) funds that the city received, accepted, and was at much greater liberty to use largely without subsequent stipulations.

As a former Commissioner who understands the challenges of city finances and as a taxpayer with a vested interest in city budgets/tax rates, I wish the current city council much luck in providing the city with a 2023 budget that it can sustain within its financial means.

What Is in the City’s Future?

On Thursday night,10/6/22, the City Council will vote on whether to accept the FEMA grant.

I do not know what the penalties might be if the city were to fail to continue funding the sixteen firefighters following the end of the grant, but I understand they would be extremely harsh. I do not know if it is too late to modify the grant.

Most troubling is Commissioner Sanghvi’s silence on the potential impact of the grant on the future of the city’s finances. As Commissioner of Finance, Sanghvi is supposed to be the fiscal watchdog for our city.

If Michele Madigan’s fears are realized, this city would be facing severe strains on its finances. I find it more than frustrating that none of this is being discussed at the Council table.

3 thoughts on “$4.2 Million Grant: Good News or Fiscal Time Bomb for the City?”

  1. I know, I know, I know that I will meet resistance to this, but with 12,550 households in the city, it’s $119 per year ($9.91 per month) to fund what I am understanding is $1,500,000 in employee expense going forward. I am not in my wheel house here, so I welcome corrected math!

    Layering in the grant, and not needing the city to cover the first 3 years, this equates to $4.15 per month all in over 5 years for each household.

    By no means am I saying that current leadership understands what they are doing, as they repeatedly state to the media, but a tax increase to cover a much needed project would have been required to keep it sustainable regardless. Fire stations don’t just pop up.

    That said, the current lack of understanding and planning is concerning. I don’t think the city finances have, over the past 10 – 15 years, been an inherited “setup where there is little plan for the future.” That is irresponsible behavior for amateurs which we have not had in recent years.

    I do look forward to hearing Montagnino’s suggested “three-year plan.” He stated we “are really having to sharpen our pencils to come up with next year’s budget.” Let’s see what he comes up with and who he implies is “we.” And then, what his three year strategy is for the city. I hold great hope that his words do indeed match his actions and are not a flavor of the week statement. I’d be happy to be invited to brainstorm given my two decades of preparing, presenting, and managing large corporate budgets.


    1. Steve,
      A couple quick comments:

      – I believe you’d want to use the number of parcels, rather then households, in any calculation, given who pays property taxes.
      – Any average, while mathematically correct, might be misleading to most readers in this case, given the wide range of appraised values.
      – As a former Finance Deputy I may not be totally impartial, but I’d be interested to hear specifically what Commissioner Montagnino means by prior budgets having “no plan for the future”. As for his statement about a budget being “inaccurate”, I personally didn’t work on the 2022 budget, but I can say with certainty that every budget is “inaccurate” to some degree. Those in city hall involved with the budget, across all the departments, do their best to make an informed guess based on historical averages, current agreements (which Commissioner Montagnino has shown a willingness to change without any financial considerations), and imperfect information about the future, which has been particularly challenging due to COVID. If he’s expecting a budget that is 100% accurate and doesn’t need any adjustments mid-year, he may be in the wrong line of work.
      – As for what the council could do, one possible option is to create a fire department-specific reserve this budget cycle, and then fund it the next two years so that by the time the city is responsible there are funds to draw from. This, done in conjunction with some moderate tax increases and a commitment by council members not to make unnecessary hires along the way, could avoid the pain of a material tax increase in one year. Budgetary sacrifices would need to be made, but if this is the council’s top priority, then the necessary financial/tax steps need to be taken into consideration as well.

      – Mike Sharp

      Liked by 1 person

  2. Former Mayor Scott Johnson opposed our plans in 2012 and 2013 for a third fire/EMS station because he felt that the City could not afford to hire four additional firefighters to staff the new third engine to be housed in the third station. Our response was that having three engines in the SSFD rather than the existing two would make it possible to use a system of staffing each engine with three firefighters rather than four. We would have to hire one additional firefighter per day rather than four.

    There are a number of municipalities throughout New York State that have multiple fire stations using three person engine crews. They are able to keep their cities safe at a reasonable cost to taxpayers.

    The overall majority of calls requiring a response from our two existing engine crews do not involve fires. Those calls could easily be handled by a three person crew especially since many of those calls are also responded to by one of the City’s ambulances which are staffed by two fully trained firefighters. That is five or six firefighters responding who are each also trained either as paramedics or EMT’s.

    There is the ‘two in, two out’ standard for the initial approach to a fire scene. In past years, that made it important that we had a four person engine crew. Our department was small and we did not operate ambulances staffed by firefighters. Things are different today. The department is larger, more diversified, better trained and better organized. When a fire does occur, it is an ‘all hands on deck’ event. All available department resources descend on the fire scene. In our scenario, the three member engine crew would be backed up by the two other engine crews, the ambulances each staffed by two additional firefighters, the Chief, the Assistant Chief, the lieutenants who would otherwise be doing fire inspections, neighboring departments activated through mutual aid, etc. There should be no difficulty getting the minimum four firefighters to the fire scene quickly from the variety of resources available.

    Proper staffing for a fire/EMS department must be a balancing act. Safety must be assured for citizens and firefighters alike while at the same time considering the appropriate level of redundancy, practicality and cost, both short term and long term. The three person engine crews for three strategically located stations that we proposed during my administration would accomplish all these goals.

    Chris Mathiesen

    Liked by 1 person

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