Auburn expects to use about $2.3 million in reserves to close its last fiscal year, more than twice the amount originally planned, as rising health insurance and electricity costs threaten efforts to rebuild savings without further reducing city services.
The financial update at Thursday’s City Council meeting put the city’s competing pressures into focus: reserves below its minimum policy, persistent cash shortages in refuse and power operations, and departments already working with fewer employees.
Councilor Craig Diego warned that balancing future budgets through higher charges and reduced services has limits.
“People are paying more and getting less,” Diego said.
Comptroller Mary Beth Leeson said staff are reviewing spending, potential salary savings and revenue trends before proposing adjustments to cover higher health insurance costs. The final amount will depend partly on employees’ benefit selections during open enrollment.
Reserves fall below the city’s minimum
Leeson’s preliminary year-end projection showed Auburn using approximately $2.3 million in general fund reserves during 2025-26, compared with the $1 million originally budgeted. An adjustment approved in October had increased the budgeted draw to about $1.6 million.
The figures remain subject to review by external auditors, who are scheduled to begin work next week.
The city’s year-end presentation placed available general fund reserves at approximately $2.1 million, or 4.1%, below the 6% minimum required by Auburn’s fund balance policy.
The 2026-27 budget was designed to add approximately $1.77 million back to reserves and restore compliance. But officials cited a roughly 22% health insurance increase and a 49% electricity cost increase as pressures on that recovery.
Asked whether reserves could absorb the insurance increase, Leeson said doing so would prevent the city from meeting its reserve policy.
The problem continues a financial squeeze FingerLakes1 reported earlier this year, when higher insurance expenses and weaker revenues prompted warnings about a larger-than-planned draw on savings.
Leeson said her first step is to examine existing budgets, including salary differences created by staff turnover and promotions. Other possibilities include postponing some expenses, recovering eligible costs through grants and adjusting revenue projections if stronger collections continue.
She expects to have a clearer insurance estimate after open enrollment ends in December, with a budget adjustment likely coming before council in January.
Staffing reductions carry service consequences
Mayor James Giannettino said leaving 32 vacant positions unfilled had helped stabilize city finances after a difficult budget process. He also credited $2 million secured through state Sen. Rachel May with supporting reserves.
Diego cautioned against relying on further staffing reductions while increasing taxes and fees. He pointed to employees helping cover trash collection and limited staffing in code enforcement as examples of the strain.
Leeson said vacancies are reviewed individually, but keeping positions empty can affect services because departments such as Public Works have little spare capacity.
City Manager Jennifer Haines said overtime also needs attention as staff begin reviewing October expenses.
Utility overtime includes work on the service-line inventory, water main breaks and leaks. Some inventory expenses will be reimbursed through a grant. Police overtime reflects grant-supported work, vacancies and duty injuries, while fire overtime includes injury coverage, employee leave and contractual minimum staffing requirements.
Staff are preparing reimbursements and determining what additional budget amendments will be needed.
The financial uncertainty also reached recreation. Diego questioned committing to Casey Park pool operations before the city knows its budget position. Councilor Terry Cuddy supported maintaining swimming access while exploring a smaller pool and potentially a splash pad.
No decision was made on the pool’s future.
Refuse and power operations deepen the pressure
The landfill fund, which supports refuse operations, has ended each year with negative cash since 2022-23. Instead of beginning to replenish that cash, it used another $417,206 during 2025-26.
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Leeson cited higher disposal and hauling costs, diesel expenses, overtime and repairs to aging equipment while the city awaited replacement trucks.
She said staff are reviewing operations for efficiencies. How auditors treat the accumulated cash shortage could also affect reported fund balances.
The power utility fund faces a similar problem. Electricity generation depends on weather, while debt payments continue regardless of production. Principal payments totaled approximately $863,000 last year, with no significant reduction expected until 2038.
Diego questioned budgeting approximately $821,000 in power revenue when recent performance had fallen short. Leeson agreed that estimates could be lowered, but said a more conservative projection would not remove the debt or underlying cash shortage.
Officials look for savings before the next adjustment
There were encouraging revenue trends in the first quarter. Ambulance collections were ahead of schedule, sales and occupancy taxes were performing favorably, and cannabis tax revenue was trending toward exceeding its budget.
Leeson cautioned against committing those gains too early in the year.
One near-term opportunity involves the city’s pension bill. Paying in December could leave the expense approximately $50,000 below budget; waiting until February would put it about $5,000 above budget. Finance staff are examining whether cash flow will allow the earlier payment.
Giannettino urged continued monitoring and timely budget transfers as costs become clearer. Diego said the city also must recognize the limits residents face.
“You can’t charge people more for the services they’re paying for and giving them less services,” he said.
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