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Auburn City Comptroller Mary Beth Leeson outlined the "incredibly challenging process" during a presentation at the City Council meeting Thursday. The original budget request totaled $53,532,641 with $44,814,493 in revenue, leaving a budget shortfall of $8,538,148.

Leeson credited city departments for their role in reducing the budget gap.

"They cut things that they could survive without," she said. "That got us a long way."

A bulk of the city's proposed budget is employee salary and wages ($26,264,392) and fringe benefits ($14,098,203), both of which will increase in the next fiscal year. Operating expenses will decrease slightly, from $6,120,561 to $6,057,387. Equipment and vehicle purchases total $250,775, down from $295,767. Debt service was also reduced from $4,206,125 to $4,159,736.

The proposed budget's revenue actions include an increase to the sales tax projection due to new cannabis dispensaries in the city. Changes to parking policies, including the possibility of charging for parking on streets near Auburn Community Hospital, could generate additional revenue.

The property tax levy would increase by 4.1%, from $11.27 to $11.74 per $1,000 of assessed value. The city is planning to raise the refuse collection fee from $276 to $420 due to increased costs associated with transporting trash to landfills. Sewer and water rates would increase by 2%, according to Leeson.

Despite the revenue-raising measures and cuts to the initial proposal, the city still must erase a $2.8 million shortfall to achieve a balanced budget.

"Our options are limited," Leeson said.

One recommendation to reduce the budget gap was approved by the City Council. City employees will be offered a retirement incentive. Auburn City Manager Jeff Dygert noted the city has done this before "when our budget was tight and we were looking for savings."

There will be two options for city employees eligible for the incentive. If they notify the city by May 17, they will receive a one-time payment of $12,500 or a $17,500 credit toward the retiree's contribution to health insurance premiums. For those who miss the first deadline, they will have until July 18 to notify the city of their retirement. They will receive a one-time $10,000 payment or $12,500 toward their health insurance premiums.

Dygert told City Council that more than 30 employees are eligible for the retirement incentive, but it's unknown how many will take the offer. That will determine how much the city will save. Leeson's goal is to save $300,000.

Another option for the city is to exceed the property tax cap, but Leeson said that is the "last straw." The proposed tax levy would remain within the cap.

There are factors outside of the city's control. The 2025-26 state budget has not been finalized, so that creates uncertainty about aid and other funding that could help Auburn.

City leaders have complained for years about the lack of a state aid increase. The state provided a temporary bump last year, but kept base aid flat. Gov. Kathy Hochul's proposed budget did not increase municipal aid.

"Every municipality across the state is facing similar issues," Auburn Mayor Jimmy Giannettino said. "There are structural problems with the way the state of New York does business with local governments."

He continued, "We're providing essential services that everybody relies on and when you start looking at what to cut, it's not easy because anything you cut out of there is going to have an impact on the people you represent."

The City Council will discuss the proposed budget and submit feedback to Dygert. A revised proposal, with a balanced budget, is scheduled to be presented at the council's May 8 meeting.

A public hearing will be held at the May 22 meeting, with final approval set for June 12.