City Faces Devastating Staffing Cuts

It is generally understood that there will need to be reductions in staff, at least temporarily, to address the city’s financial crisis in this time of pandemic. It is the severity of these cuts that most folks are not anticipating.

In the commission form of government the Finance Department is responsible for drafting the city’s budgets.

For years Commissioner Madigan has done an outstanding job of managing the city’s finances. We have had repeated years of budgets with no tax increases while maintaining city services. We have had a bond rating that is the envy of pretty much all the municipalities in New York State and we have had a healthy reserve fund.

All of this predated the COVID-19 pandemic. While Saratoga Springs went into this crisis in better shape than many other municipalities, our city’s economy is rooted in tourism. With the statewide shutdown of stores and restaurants and with the track and SPAC season in question, the income from sales tax is now like a reliable spigot suddenly gone dry. In addition the recently secured VLT money and other state funding is in jeopardy as the Governor looks for ways to deal with the state’s looming deficits. So much of our ongoing income is gone but the expenses for the year have hardly begun.

In presentations to the Council and the press Commissioner Madigan has laid out a multi-faceted approach to dealing with the financial crisis the city is facing. The Commissioner told the Council that one of the immediate steps the city needs to take is to cut three million dollars from the city’s payroll. She is proposing a 90 day furlough program rather than lay offs. Furloughs would allow the city to continue to pay employees’ health benefits. The federal government is paying an additional $600.00 a week for unemployment through July 31 so during the three months the loss of income to furloughed employees would not be as onerous. The Mayor would have to negotiate this plan with the unions.

In order to meet this $3milloin savings goal, the magnitude of the required staff reductions is staggering. The plan assumes that the Mayor’s department, the Finance Department, and the Accounts Department would have to reduce their staff by 20% each. Even more devastating would be the effect on Public Safety and Public Works. They are looking at a staff reduction of 45%. Even then the city is still looking at a $3 million short fall before the end of the year.

Putting aside the most important questions about the risk that such reductions in Public Safety would create, the existing union contracts require a minimum number of persons for each fire crew.

The word draconian seems inadequate to describe the situation.

While Commissioner Madigan has provided some general figures regarding how she arrived at the short fall, some of the information used to assess the situation and to come up with a strategy is not available.

I sent her an email asking a number of questions. She wrote me back indicating that she was not prepared at this time to answer them. They were:

  1. In terms of the cash flow per month, when would the city run out of money?
  2. Would the $3,000,000.00 savings from furloughing the employees include the cost to the city of unemployment insurance [See below]?
  3. What are the projections for the number of furloughed employees in each department to reach the financial savings?
  4. What is the overall budget number for the city that the $14-$16 million dollar savings is taken from?
  5. What is the potential risk to the city associated with the layoffs projected in public safety?

[Note: For the private sector unemployment insurance is paid annually by a percentage of a company’s payroll based on a rating. The rating is determined by the history of claims made for unemployment by laid off workers of that company. In the case of municipalities, they are required to reimburse the state for the full and direct cost of claims. Unemployment payments are based on a percentage of a laid off worker’s income up to a certain limit. The limit is very low. ]

There is every reason to believe that the Federal Government will pass legislation providing some relief to state and local governments in spite of Senate majority leader Mitch McConnell’s intransigence on additional spending. As the impact of the economic crisis becomes more evident the pressure on the Senate to act will, in all likelihood become overwhelming. President Trump has asserted that the problem is with states run by spend thrift Democrats but the economic impact on states and local governments across the country will be bi-partisan.

The entire New York Congressional delegation has signed on to a letter calling for additional moneys for states and localities. This includes Democrat Congressman Paul Tonko and Republican Congresswoman Elise Stefanik. Everyone is on board.

Given the crisis there is also the possibility that New York State may modify some requirements that might ease some of the costs of government while the pandemic continues.

This crisis will expose the inequities associated with funding local government through property taxes. The taxable value of a home is a poor indicator of the income of the owner. Many of our older neighbors struggle to pay their taxes. As a short term solution it might be necessary to provide some sort of relief for these people for the inevitable tax increases that will come. This would require action at the state legislature.

The bottom line here is that our city is facing some devastating challenges. Whatever the Federal Government will do, it will not be sufficient to address the radical imbalance between Saratoga Springs’ income and its expenses.

This kind of crisis can bring out the worst in people. It is critical that we see this as not the Department of Finance’s problem but as a problem we must all share. There is no way around the reality that all of us will have to make sacrifices to protect our beautiful city.

In order to do this, the citizens of our city need all the information we can get to find a way forward that we, as a community can live with.

Supervisors Veitch and Gaston Update City Council On Ongoing Problems At County

Below are excerpts from the May 5 Saratoga Springs City Council meeting. Matt Veitch discusses the failure of the county to follow proper procedure in their selection of the law firm that will be carrying out the independent review of the county salary debacle. He and Tara Gaston also discuss the failure of the county to convene a meeting this week (May 4-8) as promised at the last Board of Supervisors meeting.

More Crazyness From The Saratoga County Board of Supervisors

Will The County Adhere To The Open Meetings Law?

Due to the Covid-19 emergency Governor Cuomo issued an executive order that modified the New York State Open Meetings Law. Public meetings no longer have to allow the public to be present. The order did, however, offer some new requirements meant to maintain the spirit of the law. Among those requirements is that organizations subject to the law must provide a transcript of the meetings. Granted that the last meeting of the Saratoga County Board of Supervisors was on April 21 which is not that long ago but to date, no transcript of that meeting has been made available. Today (May 1) I emailed the clerk of the board to ask when the transcript will be available. The clerk, Pam Wright, has been responsive in the past. When I get a response I will post it.

The Usual Suspects

In the meantime, the Human Resources Committee of the Board of Supervisors met yesterday (April 30,2020). Attending the meeting were the seven members of the committee along with six other Supervisors. In addition attending the meeting were the County Administrator Spencer Hellwig, Human Resources Director Marcy McNamara, County Attorney Stephen Dorsey, and Adam Kinowski who apparently holds an administrative position that deals with insurance. Most county meetings are family affairs and this one was no exception. Mr. Knowski’s father, Ed, is a Supervisor and was also there.

In fact, the five people who were on the original committee that authorized the controversial raises were all present. Conspicuously absent were any Supervisors who signed the letter that challenged the decision. The usual suspects like to keep things simple.

Supervisor Tom Wood, who chairs the Human Resources Committee and was a member of the original committee that created the county’s mess, announced the formation of a subcommittee charged with investigating the controversy over the raises. He appointed Allan Grattidge, Jack Lawler, and Bill Peck.

Supervisor Peck asked County Attorney Stephen Dorsey whether the independent investigation of the controversy had been initiated. [His “innocent” question reminded me of this scene from the film Casablanca:

As it turns out, according to Dorsey, the law firm E. Stewart Jones, Hacker, and Murphy have not only been retained but have already started their investigation. According to a story in the Times Union by Wendy Liberatore, the firm is being paid $350.00 an hour.

Of course all of this was done with total opacity. How was the decision made to select that particular firm? No one at the meeting saw the need to inquire.

Ms. Liberatore reported Supervisor Tara Gaston’s response.

[Tara Gaston] was stunned to learn about the investigations proceeding without the scope or funding secured.

“It’s not the way to conduct an internal or external investigation,” Gaston said. “I’m literally shocked and I continue to be shocked. … We are not responding to this in way we need to.”

Times Union April 30, 2020

Supervisor Jack Lawler expressed surprise similar to Claude Raines when he told the Times Union,

“This group wanted an external investigation and wanted it quickly,” Lawler said. “This was done. We engage one of the most reputable law firm [sic], outside of Saratoga County, to avoid any appearance of bias and to leave no stone unturned. … Frankly, I’m surprised they are still complaining.”

Times Union April 30, 2020

These people have no sense of irony.

Saratoga Springs Supervisors Gaston and Veitch Rise To The Demands Of Crisis

There is nothing like a crisis to bring out the best and the worst in people. In the case of our two County Supervisors, Tara Gaston and Matthew Veitch, it has brought out the best.

The Saratoga County Board of Supervisors has for years atrophied from a relatively responsive institution into a clumsy organization fraught with cronyism and nepotism. It was only a matter of time before the county government would finally do something so ugly and self serving that it could no longer be hidden. The COVID-19 crisis has finally produced that event.

I would have liked to have included in this post clips from the April 21, 2020, meeting with the thoughtful remarks made by Supervisor Gaston. Unfortunately the recordings of the county meetings, unlike the city of Saratoga Springs Council meetings, are not made available to the public. Even if they were, the poor quality of the audio would have rendered them useless.

Fortunately, the two Supervisors addressed the City Council the evening of the county meeting and I was able to edit the video to share it with this blog’s readers.

These brief clips are very much worth listening to. Not only do they illuminate what happened at the county meeting but they reflect the willingness of our Supervisors to take on the reforms needed at the Board of Supervisors.

Supervisor Veitch Explains Why He Voted Not To Ratify April 17 Meeting
Supervisor Veitch Discusses What Happened At The April 21 Meeting
Supervisor Veitch Talks About His Hope For The Future Of County Government
Tara Gaston Analysis #1
Gaston Analysis #2
Tara Gaston Analysis #3
Testing Fiasco In Malta #1
Testing Fiasco In Malta #2
Commissioner Dalton and Supervisor Veitch Discuss County #1
Commissioners Madigan and Dalton Discuss County With Supervisor Veitch

Commissioner Madigan Issues Update On City Finances

[JK: This is a release from the Finance Department. Things look pretty tough for this year. “The City is now in the process of reviewing its 2020 budget for adjustments that will be required in the face of a potential $14 to $16 million, or 29% to 33%, loss of general fund revenue.” The departments are being asked to submit budgets with 10% cuts.

Particularly troubling is that NYRA has produced a new “formula” for their payments to the city which represents a reduction of approximately 40%. Commissioner Madigan writes that she is trying to find out how this was determined.]

MEMORANDUM

OFFICE OF THE COMMISSIONER OF FINANCE

CITY OF SARATOGA SPRINGS

MICHELE MADIGAN

COMMISSIONER OF FINANCE

PRESS RELEASE

For Immediate Release:  April 23, 2020

Contact:​Commissioner of Finance, Michele Madigan

Re:​City of Saratoga Springs 2019 Year End Report and April 2020 Covid-19 Fiscal Update 

Commissioner of Finance Michele Madigan reports that 2019City general fund (operating budget) closed out the year with a strong fund balance and nominal operating deficit.  

Unaudited year-end figures show a $16,758,000 fund balance; about half of this is restricted and half is freely available. This equates to 17.32% of the operating budget, well within the required 10% -25% range. The annual operating deficit for 2019 was $856,000, about 1.8% of the 2019 budget.  

Of note is NYRA Admissions Tax, which came in 40% below 2018 as a result of a change in NYRA’s calculation methodology. 2019 amounts received were $429,000; 2019 amounts budgeted were $723,000 (in line with amounts received in 2018). We continue to work with the County and NYRA to better understand NYRA’s revised methodology. “The amount received in 2019 is equivalent to amounts received in 2011. Admissions are up, but the tax is down considerably. The City provides fire, police, ambulance, water, sewer, traffic, and beautification services in order to properly host the yearly meet. I believe the City requires a more equitable distribution of this tax in order to maintain our high-level of visitor and citizen protection services,” states Commissioner Madigan.

“With excellent policies and practices in place, the City ended 2019 at a strong advantage to face the unprecedented 2020 pandemic.  My years of financial discipline, preparation, budget and reserve building have provided us with a much better foundation than many coming into the current situation,” states Madigan.  

Actual 2019 revenue collected totaled $46,261,134.  Actual 2019 expenditures totaled $47,117,479.  “The City did good job managing its current budget while considering future needs. These skills will prove beneficial in the months to come.” said the Commissioner.    

The City is now in the process of reviewing its 2020 budget for adjustments that will be required in the face of a potential $14 to $16 million, or 29% to 33%, loss of general fund revenue. Sales and occupancy tax collection have already shown substantial decreases compared to 2019.  State aid revenue sharing, parking ticket revenue, NYRA general admissions tax, casino rentals, building permits, and property tax collection are all at risk.  The City has researched the option of waiving late fees and penalties for property tax bills, but it has confirmed that only the NYS Governor may do so during a State of Emergency.  

Commissioner Madigan has asked each department to scour its budget for reductions, cuts, and re-purposed funds.  Looking for a 10% budget rollback “will require a new outlook, revised priorities, and discipline.”  Madigan has great faith that “this Council has what it takes to make it work.” This is coupled with the “Hiring and Spending Freeze” requested by Madigan to the City Council on April 10, 2020.  

“Every expense must be considered very carefully, against the long and short term City sustainability, the needs of our taxpayers, and most importantly, the health, safety, and welfare of our citizens. We are beginning from a position of strength, and will do what is best for the City of Saratoga Springs.”

Saratoga County Board of Supervisors: Stepping Back And Looking at the Roots Of the Debacle

[JK: Lew Benton has had a long and distinguished career in government. He has worked for both Saratoga County and for the state of New York. He served as the Saratoga Springs Commissioner of Public Safety.

In order to understand our current crisis at the county it is critical to step back and try to understand how this all came about. This piece by Lew helps all of us find some answers.]


The state Legislature has granted fairly broad discretion in the preferred structure of government for each non-charter county.  The general limit of that authority is the principle that the legislative and executive authority remain with a single body of elected officials.” *

* Saratoga County 21st Century Study Commission Governmental Operations Task Force Report

The dustup brought about by Saratoga County’s award of 50% salary increases to certain employees and officials deemed “essential” to managing the current health emergency presents an opportunity to take a fresh look at this form of government, how it functions and why and how the office of county administrator has been allowed to morph from its defined, statutory role as manager to one of quasi-executive.

And an April 15 “Times Union” story (“County officials lament ‘vacuum’ ”) and last Friday’s ham-handed attempt to avoid a public airing of how all this came to pass serves to add urgency.

Maybe it will remain in the public conscience long enough to force a hard look at this County’s governance.

It also indicates that it may be time for the Board of Supervisors to exhume and re-examine the reasoning that led to the creation of the county administrator title in 1979 and subsequent recommendations found in such initiatives as the 1987 Governmental/Intergovernmental Operations Task Force Report.  

That Task Force, chaired by the late Charlton Supervisor Fred Hequembourg, was part of the County’s 21st Century Study Commission appointed by Roy McDonald, then chair of the Board of Superiors.

Those who knew Fred Hequembourg will recall a strong, demanding personality who was elected chair of the Board for three consecutive terms and who was a power to be reckoned with.  He was also smart and knew government. [JK: Fred Hequembourg was one of the finest persons to serve our county in my lifetime. A Republican, Fred represented, in the deepest sense, service to community.]

Perhaps the Task Force’s final report is still worth a look.  Through its staff, the Task Force examined the evolution of county government in New York.  The report noted that then 37 of the state’s 57 counties outside New York City were non-charter, looked critically at the Charter v. Non-Charter forms and what non-charter structures might better serve Saratoga County.

The Task Force made several recommendations including this: Enact a Local Law for the Creation of a County Board of Representatives by 1991.  Implicit in the recommendation was a board made, as then and now, of representatives of the each of the 19 towns and two cities and thus preserve the direct connection between the local governments and the County.

The Task Force went out of its way in making this recommendation to emphasize the following:

“The state Legislature has granted fairly broad discretion in the preferred structure of government for each non-charter county.  The general limit of that authority is the principle that the legislative and executive authority remain with a single body of elected officials.” *

* Saratoga County 21st Century Study Commission Governmental Operations Task Force Report

So in 1987, eight years after the office of county administrator was established, the Task Force   was quick to remind all that while it was suggesting transitioning from a Board of Supervisors to a Board of Representatives, both the legislative and executive authority remain with the legislative body.  

In the follow-up to the present circumstance, any review should begin with a reminder of what this county is not.  It is not a charter county.  There is no executive other than the Board of Supervisors acting in its legislative capacity and as it may, at open meeting,  authorize and direct the chairperson to act.  Such authorizations and directions are always linked to specific policies and legislation adopted by the full Board and most are ministerial in nature; i.e., directing the chair to sign and submit a specific grant application, advocate or oppose pending state legislation, etc.

Over time it appears that members of the Board have allowed the office of county administrator to morph into a de facto executive authority.  The tail seems to be wagging the dog, the inmates are running the asylum.

The Board cannot legitimately transfer or grant authority to a committee to expend monies that have not been appropriated.  It cannot increase compensation without, by formal legislation, amending the pay schedule and budget.  And it certainly cannot give that authority to an ad hoc committee or the county administrator.

Specifically, Sec. 154 of the County Law, precludes such delegation of authority:

“Nothing herein shall be deemed to authorize the delegation of any of the powers, duties or responsibilities of the board of supervisors or of any officer except as otherwise expressly authorized by law.”

But it appears that Resolution 84 – 2020 did not, in fact, authorize increasing the compensation of certain “essential employees” nor did it appropriate any monies to do so.  So what did it do?

The March 17 resolution, among other things, established a committee made of

“ … the Chair of the Board, the Chair of the Law and Finance Committee, the Chair of the Human Resources and Insurance Committee, the County Administrator and the Director of Human Resources …” and gave it “ … the authority to jointly determine appropriate County employee staffing levels and rates of compensation that are consistent and in compliance with the current directives of any Executive Order issued by the Governor of the State of New York relative to local government staffing levels … “

So the full Board of Supervisors never authorized pay increases and clearly limited the committee’s actions to those “ … consistent and in compliance with the current directives of any Executive Order issued by the Governor of the State of New York relative to local government staffing levels … “

Of course none of Cuomo’s pandemic related executive orders allow for increases in compensation outside of normal procedure.

It is only at the referenced Law and Finance Committee meeting, convened just one hour before the full Board met, that any reference to increased compensation for some employees is discussed and even then in an obtuse way.

One thing though is clear from the minutes of that meeting: staff misrepresented facts that might have influenced members.  For instance, when asked by a committee member, Todd Kusnierz, if  “ … the State and other localities were providing time and a half.  Mrs. McNamara said the state was as well as some municipalities.”  But neither the state nor other municipalities had done any such thing.

And the true intent of the full Board’s resolution is further affirmed by the budget amendments (shown below) authorized by Resolution 84 – 2020 follows:  

“ …and be it further RESOLVED, that the 2020 County Budget is amended as follows:

PUBLIC HEALTH Appropriations:

Increase Acct. # A.40.409-6000 Regular Wages $150,000

Increase Acct.#A.40.409-6930 Social Security $11,475

Increase Acct. #A.40.409-8200 Department Supplies $838,525 …”

Note that the resolution only amends these three line items in the County’s Public Health budget. The increase of $150,000 in the Public Health Regular wages line and the additional $838,525  in the Department Supplies line are to bolster the Public Health Services capacity to respond to the emergency by adding staff – as necessary – and materials. This intent seems crystal clear by the following language in Resolution 84:

“ … and WHEREAS, Saratoga County Public Health Services is in need of additional staffing, supplies and equipment in order to respond to the ever increasing number of individuals who have tested positive for COVID19, been exposed to someone who has tested positive for COVID-19, or who are exhibiting symptoms of COVID19; …

“ … and WHEREAS, it is necessary to amend the 2020 Saratoga County Budget to effect a transfer of $1,000,000 from Fund Balance to Saratoga County Public Health Services in order to allow Public Health Services to hire additional temporary staffing, procure needed supplies and equipment, and help to meet the needs of those individuals in the community subject to mandatory or precautionary quarantine; … “

Still, press coverage of this story continues to report that the March 17 Board action authorized the committee to award 50% increases to certain administrative and elected officials and time and a half to rank and file workers.  There is no language in the resolution which authorized such increases and there is no language that gave any such authority to the five member committee.  And the resolution made no appropriation necessary cover such additional compensation.

So how did it come to pass that the Board’s appropriation of $1,000,000

“ … to allow Public Health Services to hire additional temporary staffing, procure needed supplies and equipment, and help to meet the needs of those individuals in the community subject to mandatory or precautionary quarantine…”

Somehow justify temporary salary increases of the county administrator, the personnel director and other administrative staff by 50%?  And how could have such increases been awarded without budget authority?  The $1,000,000 was appropriated to bring on temporary nursing staff and needed supplies as needed.

Not one penny was appropriated for any other purpose.

John Kaufman has reported that Saratoga Springs Supervisors Tara Gaston and Matthew Veitch, both of whom attended the referenced Law and Finance Committee, and later voted to adopt Resolution 84, took to social media to deny having responsibility for granting 50% raises to “essential” County workers.

Here, in part,  is what Supervisor Veitch posted on his Facebook page:

    “Yes, the County is currently operating under a policy where most of the essential employees are getting 1.5 times pay for hours worked. I was informed of this decision on March 15th by our County administration, and was not involved at all in developing this policy.

    Nowhere in that resolution does it approve or dictate time and a half rates for essential employees.”

On her Facebook page Tara Gaston offered a similar defense.

    “On March 15, 2020, administrator Hellwig notified the board of supervisors that essential workers were to receive time and a half during the COVID-19 emergency. I immediately sought details, including who created the policy.

    “On March 17, 2020, the board debated resolution 84-2020 to amend the budget. The time and a half policy was not included in the resolution and was not voted on.  Nevertheless, the topic was discussed. I requested that the pay discussion be taken to executive session to allow frank conversation about the origins and details of this policy. Chairman Allen, on the advice of county attorney Dorsey, denied the request.”

These posts support what is already known: the Board’s resolution did not authorize increased compensation.  But both supervisors say they were notified by the county administrator on March 15 that “essential” employees would be compensated at 150% of their established pay rates.

How and in what form the March 15 directive referenced by Supervisors Veitch and Gaston was transmitted and if it specifically referenced increased compensation is not mentioned.  If our supervisors would share the  administrator’s March 15 directive It would, presumably, answer lingering questions and perhaps put this entire episode in a more favorable light.

Back in 1989 Fred Hequembourg and the other members of the County’s Governmental Task Force were so prescient to warn against allowing the Board of Supervisors to forget that it is the executive authority and it cannot surrender that authority, voluntarily or otherwise.