By JIMMY LAWTON

OGDENSBURG -- Ogdensburg City Manager Sarah Purdy told council Monday that the city would likely need to raise sewer rates, water rates and taxes in the upcoming budget.

In a presentation at the meeting she said the city has been struggling to jockey funds around in order to stay under budget, but despite the creativity, unforeseen costs continue to arise.

Purdy said the city has less than $300,000 in unappropriated fund balance going into budget season.

She said if the city fails to stay within the current budget, the consequences would be dire.

Moody’s Investor Service is one of several companies that rate bonds and other debt based on perceptions of perceived risk. A decline in a ratings can have negative impacts on borrowers such as higher interest rates.

Purdy told council the city is already likely heading to BAaa3, which is just one step away from what she described as “junk bond” status.

She said that’s “the last lowest bond rating that a municipal entity can have” and still sell bonds without negotiated terms.

Purdy said if the city fails to stay within the budget, they will also likely need to override the state imposed tax cap and should expect public criticism

Purdy said the city under-budgeted for several items last year.

She said the city budgeted only $40,105 for retirement incentives, which is the line item that pays retired workers for accrued time. She said that line item should have been at least $200,000.

She said the same was true for the contingency account, which has about $28,000 in it. She said a more reasonable contingency fund should have $107,000 in it. Purdy pointed out that $107,000 is equates to a 2 percent increase in taxes.

While the sewer and water funds were in better shape than the general fund, Purdy said increases in both rates would likely be necessary.

Purdy said theses funds could become revenue generating once the city completes its massive wastewater project. She said this may allow the city to extend its water district into Oswegatchie, adding that the town has expressed some interest in doing so.