New City of Newburgh Multiyear Financial Plan

NEWBURGH – The City of Newburgh is pleased to announce the release of its multiyear Financial Plan covering fiscal years 2021 – 2024. It represents the City’s road map for maintaining and improving fiscal stability.

The City’s Multiyear Financial Plan (MFP) includes revenue and expense forecasts for its major funds, including the General Fund, Water Fund, Sewer Fund and Sanitation Fund. The plan is accompanied by a Fiscal Improvement Plan (FIP) Narrative which details the necessary actions and timelines the City plans to implement in order to achieve the revenue and expense targets listed in the MFP. Each section of the FIP includes goals and performance measures used to develop forecasts and the assumptions made to represent future financial conditions.

For its General Fund, the City will strive to adopt budgets with decreasing levels of appropriated fund balance between Fiscal Years 2021 – 2023, and aim for an AFB of $0 by fiscal year 2024. While the full extent of the impact to State and Local revenues due to COVID is unknown at this time, we estimate the City’s actions will result in a sustainable drawdown of general fund balance over the course of City Fiscal Years 2020 -2024. These actions will allow the City to continue to provide high quality services during a National State of Emergency and the ensuing recovery that is likely to be slow and financially painstaking.
The City will continue to implement Multiyear Water and Sewer Rate Increases to meet the needs of the water fund, and to meet capital needs and consent decree mandates of the sewer fund. Prior to 2020, the City had not increased water rates for several years. By phasing water rate increases over a five-year period, rate payers avoid one large increase and the water fund will reach a sustainable operating revenue. The Sewer fund has one of the largest financial demands as it relates to infrastructure repair and maintenance, capital items and consent decree items. Therefore, the City must be vigilant in implementing the rate increases as recommended in the Sewer Study to maintain the funds’ financial ability to respond accordingly.

The Sanitation fund was recently pulled out of a structural imbalance, which persisted for several fiscal years resulting in negative net assets (fund balance). The increase in user fees effective fourth quarter billing in City fiscal year (CFY) 2019 corrected the structural imbalance in the 2020 budget and beyond. However, the damage to sanitation funds’ budgetary reserves (unrestricted net assets) has not yet recovered. The projected surpluses in CFYs 2020-2022 will bring this fund’s budgetary reserves into the positive range, increasing the fiscal strength of this fund.

The dedicated work of seasoned public servants and the City Comptroller has resulted in continued efforts to further restore the fiscal credibility of the City of Newburgh. Over the course of the last year, the City has maintained a stable financial position that was recently given a positive outlook by Moody’s Investor Service. The Multiyear Financial Plan provides a framework for future financial decision-making, and guides the Council in long-range financial planning.