Albany Intends to Borrow $10 Million to Cover Salaries

Albany prepares to borrow $10 million for year-end expenses

The city of Albany is preparing to borrow $10 million on Wall Street to cover employee salaries and other essential operating costs through the end of the year, Times Union reported.

The city intends to issue revenue anticipation notes on Nov. 24, which must be paid back by Feb. 24. This short-term municipal debt is being used to bridge a gap in cash flow as officials navigate a significant budget deficit.

The move has sparked sharp criticism from within the local government. Common Council member Deirdre Brodie, a member of the council’s Finance Committee, questioned the timing of the borrowing in a video posted to Instagram.

“Why are we partying in Puerto Rico when we need to take out a payday loan to pay 1,400 city employees right before Christmas?” Brodie said. Deirdre Brodie

Brodie’s remarks targeted Mayor Dorcey Applyrs and other officials, including Chief City Auditor Sam Fein and Council members Owusu Anane and Alfredo Balarin, who attended the Somos conference at the Caribe Hilton in San Juan.

The mayor’s office responded to the criticism with a statement saying Applyrs was working to strengthen relationships with state officials while managing “one of the largest fiscal challenges facing any municipality in New York.”

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The mayor’s staff noted that the trip to Puerto Rico was funded through a combination of personal and campaign funds. The city’s Treasurer, Darius Shahinfar, characterized Brodie’s claims as disingenuous, noting that he has warned lawmakers for months about the impending need to borrow.

Shahinfar explained that while the city previously relied on reserve funds to manage cash-flow issues, those reserves have been exhausted. However, he argued that claiming the city is broke is a “disservice to the people who work here.”

growing budget deficits threaten city creditworthiness

The reliance on short-term debt comes at a time of increasing financial instability for the city. A debt-security document regarding the notes sale includes a specific warning that the city has faced “severe financial difficulties in recent months,” which could impact the marketability and value of the notes.

The fiscal outlook for Albany shows a growing gap between revenue and spending. The city’s most recent data indicates the following projections:

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Fiscal Period	Projected Deficit
Current Year	$22.18 million
2027	$33.3 million

This downward trend in creditworthiness was reflected in July when S&P Global Ratings downgraded the city’s bond rating from “A+” to “A.” This downgrade is expected to increase the interest rates the city must pay on both short-term and long-term borrowing.

While the city received $20 million in the state budget this year—a move intended to address last year’s deficit—the immediate shortfall remains acute. Budget adviser Bob Ward has previously noted that revenue anticipation notes are typically reserved for “abnormally severe cash-flow problems.”

Potential cuts to city services

As the city negotiates a $258 million budget for next year, lawmakers are facing difficult choices to close the eight-figure gap. The 2027 budget must be passed by Nov. 30.

The Finance Committee has already agreed that at least $8 million must be cut from the current spending plan. These potential reductions target several key community pillars and municipal functions:

Dozens of city job cuts and layoffs.
Scaling back the Summer Youth Employment Program.
The cancellation of the annual Tulip Festival.

The Tulip Festival has been a staple of Albany since 1949, having been canceled only twice previously, in 2020 and 2021, due to the pandemic. The mayor’s current budget proposal includes dozens of job cuts as part of the effort to reach a more stable financial footing.

“The city is broke,” Brodie said in her video, asserting that the administration is forced into borrowing to meet its payroll obligations.