GLOVERSVILLE - Financial difficulties lie ahead for the city, the mayor and city finance commissioner say.
Officials cite rising costs, expiring grants and revenue concerns.
Mayor Dayton King and other city officials are seeking ways to avoid a possible financial crisis.
During a Common Council meeting earlier this month, King told council members the city needs to make fiscal changes.
Finance Commissioner Bruce VanGenderen said Wednesday personnel costs have increased this year by more than $150,000 and health insurance costs will go up 5 percent next year.
VanGenderen said the city council may have to deal with a roughly $800,000 deficit in the 2015 budget.
VanGenderen said two city grants are running out this year. They include a three-year Community Oriented Policing Services Grant, which gives the city $150,000 per year for two police officers, and the Job Access and Reverse Commute Grant, which gave the city $100,000 per year to help low-income residents with job transportation costs.
King said the city either could cut the programs or continue to pay for them without grant money.
One police officer is retiring. King said the city could either replace the officer or leave the job vacant.
In 2013, health insurance costs were $3.36 million. This year, the costs increased to $3.77 million.
"Some of these increases that we have faced have been offset by some savings," VanGenderen said. "By transferring Medicare-eligible retired folks into Medicare Advantage plans, some of the increases that we have seen in regular health insurance costs have been offset by some of these. But right now, I don't see any savings coming from that."
VanGenderen said all the eligible retirees already have transferred their plans.
Other new costs include a $150,000 increase for a three-year police contract, from $2.15 million to $2.3 million.
The city expects to have a $4.3 million to $4.4 million fund balance going into 2015. VanGenderen said the city has the option of using some of that money, but he and King say the city only should use it as a last resort because they're concerned about future revenue.
The city has seen an increase in sales tax revenue. Second-quarter sales tax figures show Gloversville revenues increased by $122,441 compared to the second quarter of 2013.
VanGenderen said he expected sales tax revenue from the new Walmart store, which opened in the city last year, would be around $550,000 to $600,000 per year.
VanGenderen said the revenue from Walmart appears to be on pace with that projection.
Meanwhile, the city is close to its constitutional taxing limit. A 2013 state comptroller's report said the city has exhausted 93 percent of its constitutional tax limit, and can only raise an additional $505,000 through property taxes.
"We have to have some real serious conversations about where our city heads," said King.
He said he wants to speak with department heads, city employees and citizens to see what services the city can afford to provide.
King said he's spoken with the state comptroller's office and it's ready to help.
King, who will present his budget proposal in October, said he does not want to raise property taxes.
"The taxes in the city are high enough," he said.
Second Ward Councilman Arthur Simonds suggested the city work with Fulton County on the county's SMART Waters program, which involves creating water services throughout the county. The program could give the city opportunities to sell water to support new industries.
"We have a tremendous resource called water," Simonds said.