Rye Receives Clean Bill of Fiscal Health from State Comptroller

In a report issued today, that is part of a series of fiscal profiles on municipalities across the state, State Comptroller Thomas DiNapoli commended Rye and White Plains for maintaining a healthy financial position due to stable tax bases, low poverty, and conservative budgeting.

“Rye and White Plains are on solid financial ground and not facing the demographic and fiscal stress challenges that are afflicting other cities in New York,” said DiNapoli. “By taking advantage of these favorable circumstances, each municipality has been able to encourage economic development and cultivate financial stability for residents and taxpayers.”

“Rye is a small city, but the recession hit us equally hard five years ago when our financial trend lines were going in the wrong direction – rising unemployment, declining fund balance, rising pension and health care costs, and declining infrastructure funds,” said Rye Mayor Douglas French. “Despite the challenges posed by the property tax cap, the city’s focus on sound fiscal decision-making and tough budget choices has put Rye in excellent position as the economy rebounds.”

Over the past decade, expenditures in Rye have grown faster than the statewide average, according to the reports. The Comptroller noted, however, revenues have increased substantially for both municipalities during the same time frame. In Rye, revenues increased 5.7 percent while expenditures grew by 5.9 percent. The statewide average growth for cities in each of these categories was 3.3 percent for revenues and 3.6 percent for expenditures.

Revenue growth has allowed Rye to build up its rainy day reserves. In 2012, Rye had $6.8 million in available fund balance, equal to 23 percent of its general fund expenditures.

The fiscal profiles also outlined positive demographic factors that benefit each city.

For example, Rye’s median home value is more than $1 million, which is ranked highest in New York State. The median household income of $142,469 is substantially higher than the median of $38,699 for cities statewide. And the child poverty rate was a mere 1 percent, compared to 28 percent for the median city.

This combination of factors allows Rye to rely more heavily on property taxes to fund operations than most other cities. In 2011, property taxes accounted for 46.2 percent of Rye’s revenues, which was notably higher than the 27.1 percent of revenue for all cities in the state.

DiNapoli’s fiscal profile also highlighted:

Rye’s revenues grew 69 percent between 2001 and 2011;

Rye generated 26 percent of its revenue through service fees in 2011, higher than the statewide average of 21 percent;

From 2000 through 2010, the population of Rye increased 5 percent.

Earlier this year, DiNapoli implemented an early warning system that gives local communities a fiscal stress score. Under his Fiscal Stress Monitoring System, DiNapoli identified 40 counties, cities and towns with fiscal years that coincide with the calendar year that are in fiscal stress. DiNapoli will issue additional fiscal stress updates for other local governments with different fiscal years on an ongoing basis.

DiNapoli’s system evaluates local governments on nine financial indicators and creates an overall fiscal stress score. Indicators include fund balance, cash-on-hand and patterns of operating deficits. The scores are used to classify a local community as being in “significant fiscal stress,” “moderate fiscal stress,” “susceptible to fiscal stress” and “no designation.” The system also evaluates communities relative to 14 environmental stress factors such as population trends, poverty rates and property values.

For a copy of the Rye fiscal profile visit:

http://www.osc.state.ny.us/localgov/pubs/fiscalprofiles/rye.pdf

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