Carmella’s 2027 budget plans to take $947,883 from the city’s debt reserve. On the city’s own year-end numbers, the reserve will have about $844,000 left after this year.
Last year she held down the tax rate by paying $2 million of Troy’s debt bill out of the same reserve. It held $2,844,434 at the end of 2025.
Short: about $104,000. After that, the reserve is gone, and the full debt payment falls on property taxes.
On October 15, at the Council’s first hearing on the 2027 budget, City Auditor Jeff Nesich asked the Administration how much of the city’s savings is left. “How much of that is money that can be spent?” Deputy Mayor Seamus Donnelly called the question “a political charade.”
How It Worked
Troy pays its debt from a Debt Service Fund. Each year the General Fund sends money in, and the fund can draw on its own savings.
In 2026, Carmella cut the General Fund’s payment by $1.70 million and drew $2 million from savings instead. That kept the 2026 rate increase to 1.95%. City debt didn’t shrink. The savings paid the bill so property taxes didn’t have to.
The reserve has been falling for years:
| Year end | Debt reserve |
|---|---|
| 2022 | $5.1 million |
| 2023 | $4.40 million |
| 2024 | $3.94 million |
| 2025 | $2.84 million |
The 2025 drop includes a $1.13 million adjustment the city’s report doesn’t explain.
The city’s quarterly financial reports leave the Debt Service Fund out. On October 22, the City Auditor asked that they start including it.
For 2027, the General Fund’s debt payment goes back up $1,718,444, to $5,200,968. That one line is 30% of the General Fund increase, and the biggest single reason the rate jumps 3.42%.
The Other Savings
Troy’s finances are not in crisis. The State Comptroller gave Troy a fiscal stress score of 0, the best possible, for 2024 and 2025. Reserves have been healthy since 2022.
The reserves that earned that score are now being spent. Since the 2026 budget was adopted, the city has drawn $2.15 million from General Fund savings:
| Date | Amount | Purpose |
|---|---|---|
| December 18, 2025 | $750,000 | City Hall move to the Proctor’s building |
| June 18, 2026 | $400,000 | Little Italy Marketplace funding gap |
| August 20, 2026 | $1,000,000 | General Fund spending (Ordinance 36) |
The December draw is already counted in the city’s 2025 year-end figures. The 2026 draws total $1.4 million.
On August 20, Comptroller Michael McNeff couldn’t tell the Council how much unassigned fund balance, the money the city can spend freely, was left. “I honestly don’t have that number in front of me,” he said.
If 2026 doesn’t end with a matching surplus, that spendable balance falls to about 10% of spending, the line where the State Comptroller starts counting warning points.
The Question Nobody Answered
Jeff Nesich is the City Auditor, appointed by the Council. Every city payment, about 800 a month, needs his approval. In April, Carmella declared an emergency to pay Flock without his sign-off. He and the Council sued.
On October 15, he asked the Administration to confirm the city’s savings on the record. Last year’s audit, he said, showed about $10 million in unassigned General Fund balance and $33 million in fund balances overall, much of it restricted. He wanted to know how much the city can actually spend.
The Administration wouldn’t say. Officials said the figures were in the city’s reports and that “nobody over here is saying that that’s not accurate,” but they “did not come here prepared” to answer. Donnelly told the audience, “Your cronies can laugh behind me.” Council President Sue Steele ended it: “Jeff is our staff person. He has every right to be here.”
Nesich also couldn’t balance the city’s budget transfers. The Water Fund sends $2,479,837 to the General Fund, and he couldn’t find where the General Fund received it. He called it “probably just a technical matter” and offered to send his questions to the Administration.
A week later, McNeff called it “another upload issue” in the city’s financial software, where every line is keyed in by hand, and promised the Council corrected pages.
The Administration wouldn’t say how much Troy can spend. On October 22, the city’s outside auditors did: $10.1 million.
The Sales Tax That Didn’t Come
Sales tax is the General Fund’s biggest source of money after property tax. In 2025, Troy budgeted $21.25 million and collected $20,337,897.
Short: $912,103.
For 2026 the Administration set the estimate at $22.0 million, 3.5% above the 2025 budget, a number the city never reached. Based on county collections through June, 2026 is on track to fall about $1 million short again.
| Year | Budgeted | Collected |
|---|---|---|
| 2024 | $20,250,000 | $19,791,373 |
| 2025 | $21,250,000 | $20,337,897 |
| 2026 | $22,000,000 | tracking about $1 million short |
| 2027 (proposed) | $21,600,000 |
Carmella’s message says renegotiating the county sales tax deal “has already begun.” No new deal has been signed. The 2027 estimate is still 6.2% above what Troy collected in 2025. If collections match 2025, the General Fund comes up $1,262,103 short.
More Borrowing
General Fund debt rose $9.8 million in a year, to $68.9 million. The 2027 capital plan adds $39.8 million in new borrowing.
It also moves police cars from cash to credit. The $375,000 the city paid for patrol vehicles out of the operating budget drops to zero. The capital plan lists $1.5 million in marked SUVs over five years, paid for with debt. Cars that used to be paid for up front will now carry interest.
Monument Square ($21.95 million), the Riverwalk Trail ($6.5 million), and Congress and Ferry Streets ($5.8 million) were all scheduled for 2026. All three are back in the plan for 2027.
What to Ask
- What will the debt reserve hold at the end of 2026? Is there enough for the $947,883 the 2027 budget plans to use?
- What happens to the tax rate in 2028, when the reserve is gone?
- What was the $1.13 million adjustment to the debt reserve in 2025?
- What will spendable reserves be at the end of 2026, after $1.4 million in draws this year?
- Why is the 2027 sales tax estimate built on budgets instead of collections?
- How much of the city’s fund balance can be spent? Will the Administration put that number in writing for the City Auditor?
- Will the corrected pages for the $2,479,837 Water Fund transfer reach the Council before it votes?
- Will the quarterly reports include the Debt Service Fund, the fund whose reserve runs out in 2027?
Each of these choices made one year look better. Spending the reserve held down the 2026 rate. An optimistic sales tax number balanced the books on paper. Moving cars to credit took $375,000 off this year’s spending.
Every one of them comes due later. Trojans pay the 2027 rate increase this year, and the 2028 budget opens with no reserve left.
Partisan angle: Carmella inherited strong reserves. She is spending them to hold down each year’s tax rate. Trojans can ask the Council for the 2028 number before it votes.
Sources: City of Troy, 2027 Proposed Budget (Mayor’s message, p. 1; sales tax revenue, p. 12; General Fund debt, p. 10; interfund transfers, p. 175; Debt Service Fund, p. 255; capital plan, pp. 270 to 272; police vehicles, p. 94); City of Troy, 2024 to 2026 Adopted Budgets (2026 budget, pp. 15, 178); City of Troy 2025 Annual Financial Report filed with the NYS Comptroller; NYS Comptroller, Fiscal Stress Monitoring System (2024, 2025); NYS Comptroller, Local Sales Tax Collections; Troy City Council meetings: December 18, 2025 (Ordinance 75); June 18, 2026 (Ordinance 26); August 20, 2026 (Ordinance 36; Q2 financial report); Troy City Council Finance Committee budget hearings, October 15, 2026 and October 22, 2026 (Comptroller follow-up; The Bonadio Group, 2025 financial statement audit, Resolution 97)