Geneva Faces $1.65M Budget Gap as Costs Outpace Revenue

Amie Hendrix — City of Geneva

April 29, 2026 Paul Szmal 7:16

The official logo for the City of Geneva, New York, features a sailboat and city skyline above the city's name.

Geneva City Manager Amie Hendrix says a projected $1.65 million budget shortfall for fiscal year 2027 — which could grow to nearly $4 million by 2031 — is a challenge worth taking seriously, but she’s pushing back on the idea that it signals a crisis.

“I wouldn’t characterize it necessarily as bad news,” Hendrix said in an interview on the FLX Morning Podcast. “These are projections done in April, a full year ahead, and this gives council a chance to weigh in and start thinking about what services are core services and what may not be as core when we have these shortfalls.”

The core issue, Hendrix explained, is that expenses — particularly personnel costs — are rising faster than the city’s revenue streams, which rely heavily on property tax and sales tax formulas. Health insurance costs and New York State retirement contributions are two major drivers that are difficult to predict year to year. She also flagged a debate in Albany over changes to Tier 6 retirement benefits, noting that while adjustments could help with recruitment gaps, the question of who absorbs any added cost — the state or municipalities — remains unresolved.

Hendrix noted that despite the pressure, Geneva has worked to maintain healthy fund balances across its three funds — water, sewer, and general — hitting above target rates in most cases. She cautioned, however, that fund balance is only appropriate for one-time expenses like equipment purchases or pilot programs, not ongoing personnel costs.

She also said the city has reduced its overall staffing over time, though it has added two police officers and two public works employees in recent years. A hiring freeze and other cost-control measures discussed at a recent council meeting are already underway for the current year.

The next Geneva City Council meeting is Wednesday, May 6, at City Hall. The agenda will include presentations from the fire chief and police chief on public safety and the city’s strategic plan, a review of first-quarter 2026 financials, and further discussion of the hiring freeze. Residents who can’t attend in person can watch the meeting live on the city’s YouTube channel.

Read Full Transcript

Paul Szmal: And we welcome in Geneva City Manager Amy Hendricks this morning. Hi. Good morning. How are you this morning?

Guest: Doing well and yourself?

Paul Szmal: Good, good. I hate to bring up bad stuff right off the get go, but we got to go there. There was a report from the Finger Lakes Times that says the city of Geneva is looking at a $1.65 million budget shortfall for fiscal year 2027 and that could grow to nearly $4 million by 2031.

Guest: Yeah, yeah. So I wouldn't characterize it necessarily as bad news. So these are projections done in April, a year ahead. And so what we're looking at is where are we growing and where don't we have the revenues to match that growth? And so I will say that we don't, at that time we just finished up quarter one, so we didn't have quarter one projections. I will say quarter one, 2026, we did better than anticipated. And we'll cover that next week on May 6th at the city council meeting. At the same time, these are things that we have to take into consideration when we build the following year budget. So we start budgeting April, a full year ahead of implementation, and this gives us a chance for council to weigh in and start thinking about what services are core services and what services may not be as core when we have these shortfalls.

Paul Szmal: This is kind of a difficult position for the city to be in for a couple of different reasons, one of which is, correct me if I'm wrong, a lot of these projected increases in expense are due to personnel costs, not necessarily because of budgeted salary increases. It's things like health insurance that we're all dealing with, the price of them going up.

Guest: Absolutely. The price of everything continues to increase, and our revenues are not as dynamic as other businesses. So our revenues tend to rely on property tax, sales tax, things like that. And there are formulas to all of those revenues. What is happening is our expenses are rising at a higher pace than our revenues. And with that, that means that our services, which all of our services have that human at the core. And so we have six negotiating units who have been very good at working with the city on changing their negotiation practices, working together. And what occurs is we can forecast over many years. Some of these contracts are going to last a couple more years, so we can start forecasting what that looks like. Where we can't forecast, and what you're talking about, Paul, is what does health insurance look like? What does New York State retirement system look like? There is a push in Albany right now as they're debating the budget to change tier six retirement. And there's some positives to that because that is a gap for recruitment. And there are some potential challenges to that. And one of the biggest challenges being if they change that, what happens and who pays for it? Is that state or is that local?

Paul Szmal: Now on the surface, you would think, okay, well, it's simple. Just cut salaries or increase property taxes. The property tax increase, nobody really wants to do that. But in terms of things like cutting salaries and everything, there's bargaining agreements that are already in place. That would mean just completely tearing everything up and renegotiating.

Guest: Well, if it were only as simple as tearing it up and renegotiating, you're right. There are bargaining agreements that are already in place. And with those bargaining agreements, we've already agreed to terms. And so if we were to say, we're not going to honor those agreements, there would be some additional costs because we would probably enter the Public Employee Relationships Board would probably enter into that and have some strong wording for us. I think one of the other big pieces is when we look at salaries for municipal employees, we look at comparables within the region. And are we a leader in that or not? We tend to be kind of in the middle. We have some communities that pay better and some that lag behind us a little. But with that all being said, at the core, we need humans to do a lot of the work still. And when you look at our full-time equivalents, the number of people, we are actually down from where we used to be. So we've reduced over time. In the past four years, we have added two police officers in one year, one and a half last year. We also have added two additional public works employees. And then any other changes you've seen with, you know, the Assistant City Manager or something like that is all shifting funds and shifting obligations within. So we continue to do more or at least the same with less staff behind it.

Paul Szmal: It's spinning a lot of plates at the same time.

Guest: It is. It definitely is. And one of the things that you're looking at as a city council is a little bit more of a long-term sustainable approach because it used to be, okay, well, if we have a shortfall, we could tap into the reserve and we'll be fine. Well, you know, that reserve, obviously replenishment has to come from somewhere. You can only dip into it so many times. But that as a long-term strategy really isn't sustainable.

Paul Szmal: It's not. And one of the things that I am proud of is we have spent the last several years focusing on our fund balances. So there's three funds, water, sewer, and general. And all three, we've continually put more into the fund balance and we've hit above the target rate for a majority of those. Sewer's still lagging a little. With that being said, you also have to be careful because when you are taxing someone, you're taking for current year expenses. If you have a good financial year and there's access, it goes into that fund balance. What I don't want to do and I'm sure council doesn't want to do is overtax to put money in our fund balance for the following year. And so there's a really interesting balance there. Sometimes we tap into fund balance because we have too much in our fund balance and we need to use it. Now, the key to using fund balance is you only use it for one-time things. It's something like a piece of equipment that maybe you would need again in 5, 10, 15 years, but you're not going to need right away. So it's a one-time expense. Or sometimes it's a pilot program, something you want to see if it works. You may use fund balance, but it's very short term and it doesn't cover those human costs on the personnel side of things.

Paul Szmal: Next city council meeting is Wednesday.

Guest: It is. It is Wednesday. There will be a few things on the agenda. Our public safety team will be coming in. So our fire chief and police chief to talk about public safety and how that aligns with the strategic plan. We'll be talking about that quarter one analysis. We do finally have sales tax receipts coming in so we can talk about where we are in 2026. And then we'll talk a little bit more about the second meeting last week, which was focused on hiring freeze and some other precautions this year to help with next year and the following years. And of course you can watch that on YouTube if you can't attend in person at your Davis City Hall.

Paul Szmal: Absolutely.