Miller: City faces growing budget deficit concerns

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February 3, 2012

By Jake Palmateer Staff Writer The Daily Star Fri Feb 03, 2012, 09:48 AM EST

ONEONTA _ Although Mayor Dick Miller said Thursday he is an opponent of horizontal hydrofracking, he cautioned against turning a blind eye to vertical drilling.

Speaking at the Oneonta Rotary Club meeting Thursday, the mayor outlined the city's financial challenges and ways to alleviate them.

There is a mix of good and bad news, according to Miller, who took office in 2010 and immediately called for city to draft a five-year fiscal plan.

Because of a positive budget variance in 2010, the city's reserves are at about the same level as 2009, and the deficits experienced in 2011 and projected for 2012 are less than first expected under the five-year plan.

"The bad news is that in four of the last five years, we have had increasing deficits," Miller said. "While we have delayed the inevitable, it is still upon us. Reserves will fall below desired levels in 2015 and will be totally exhausted early in 2017."

Personnel costs, mainly the city's contribution to the retirement system, are driving the financial strains, he said. But layoffs of city personnel would result in reductions of police, public works and fire department services.

Merging the city and town of Oneonta -- an idea he has pursued unsuccessfully for the last two years -- has been met with resistance. Other options such as a commuter tax or a sales tax increase are unlikely, he said.

The community needs to take a look at economic development, according to the mayor.

"We have become more dependent on the colleges and the hospital as the major economic engines of our community. Local wealth created in the middle and latter parts of the last century has either been exhausted or relocated," he said.

Miller said employees of expanding businesses, such as Ioxus, are having a hard time finding upscale temporary and permanent housing, while others who work in the Oneonta area are having a hard time finding affordable housing.

At the same time, attitudes toward gas drilling could hurt attempts at luring business investment to the community, he said.

"There are approximately 7,000 active vertical wells in upstate New York serving communities as pristine and ethically responsible as Corning and facilitating the presence of companies like Corning Glass, in part because of cheap energy," Miller said. "The business community shares the responsibility for this. It is not an effective advocate for itself, in general, and has chosen to be absent from the discussion of horizontal hydrofracking. Let me say again that I think the outcome of those discussions is to this point appropriate, but we are at risk if carrying it too far."