Updated 12/07/2012 05:48 PM
City of Binghamton now current on all pension costs
The city of Binghamton, like many other municipalities, has faced challenges over the rising cost of pensions in the past few years. But as of this week, Binghamton leaders say they are up to date on all pension costs. Our Melissa Kakareka tells us how it's possible and what it means for the city in the future.
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BINGHAMTON, N.Y. -- The city of Binghamton is paying off one of its bills.
City officials had previously deferred $1.4 million of this year's pensions costs until 2013 to help keep tax rates low in 2012. The city is now up to date on the bill and is saving some money by paying it in December instead of February.
"The cost for punting it from December to February isn't that much but if you continue punting more and more down the road, you don't want to get in that situation," said Binghamton Mayor Matt Ryan.
The city is able to catch up on payments by using funds from three budget lines. It turns out that the actual bill for police and fire pensions was one million dollars lower than forecasted. The city also saved money by using a federal SAFER grant to fund positions in the fire department instead of paying to fill vacant positions. Money from the city's reserves is also being used.
The mayor says staying current on payments is important for the city's bond rating and its financial planning.
"My goal has always been to make sure the next mayor has the best fiscal situation possible and that we get our city finances on most stable footing possible. We've seen what's happened in Scranton and other cities where they have had to default and we are trying to make sure we are very healthy," said Ryan.
Mayor Ryan introduced the budget transfer this past Monday and City Council unanimously passed the legislation on Wednesday before Mayor Ryan officially signed it Friday.
While the high cost of pensions will continue to be an issue for all municipalities, City Council members are hoping its a step in the right direction for 2013 budget season.
"I look forward to better budget year next year, knowing that this has been all paid up in the full, the deferred amount from last year," said Binghamton City Council member Chris Papastrat.