The City of Albany's Financial position - a 2024 update

---

Earlier this year we used the Strong Towns Finance Decoder to evaluate the health of the City of Albany’s financial position, using data through the end of 2023.  With the recent completion of the City’s 2024 audited financial statements we can update our analysis and see how the City is doing financially, using 7 key metrics.  In addition to updating our key metrics, we are also including a new chart that conveys our analysis of how our City is doing and what the 2024 trendline shows.

We will keep the discussion of the Strong Towns Finance Decoder brief, anyone can read a longer explanation in our original article.   The Finance Decoder tool presents the City’s financial data using 7 basic charts which are relatively easy for a layperson to visualize and understand.  As Strong Towns notes the Finance Decoder helps anyone to “Visualize the financial trajectory of your city” and “Understand whether your city is on track to keep its development, service and growth promises.”

Importantly, the Finance Decoder’s seven metrics aren’t something that is just made up.  As Strong Towns notes:

“The Finance Decoder isn't just a novel tool; it's grounded in established public accounting standards. Specifically, it draws from the "Indicators of Financial Condition" methodology developed by the Public Sector Accounting Board (PSAB) in Canada and aligned with the Governmental Accounting Standards Board (GASB) in the U.S. These indicators—focusing on sustainability, flexibility, and vulnerability—are recognized as best practices for assessing long-term financial health.”

We have posted the Finance Decoder for Albany here.  This is a Google Sheet that has several tabs:

• Input - contains information drawn from 2014-2024 audited financial statements for the City of Albany
• Results - contains 7 charts that depict key metrics over time
• Trend - is an exercise that we created to look at the City’s metrics in two dimensions - our current health or state, and the trendline we are seeing in 2024

We will keep the explanation brief and, as mentioned, you can review our previous article for more details.  On to the metrics!

What it is:

The city’s financial assets—such as cash, receivables, and other short-term holdings—divided by its total liabilities. This is a different way of presenting the Net Financial Position.

What it tells you:

This ratio shows whether the city has enough liquid financial resources to cover what it owes. A ratio below 1 means it would not be able to pay off its liabilities using only its financial assets, which is a sign of financial stress.

What the trend shows:

A rising trend means the city is improving its financial buffer. A falling trend suggests the city is becoming less able to handle its obligations without borrowing or cutting services.

Our Assessment:

Our Net Financial Position, while still in a negative position overall, is trending in a positive direction due to growth in our Current Assets and a decrease in our Total Liabilities. 

What it is:

The city’s financial assets—such as cash, receivables, and other short-term holdings—divided by its total liabilities. This is a different way of presenting the Net Financial Position.

What it tells you:

This ratio shows whether the city has enough liquid financial resources to cover what it owes. A ratio below 1 means it would not be able to pay off its liabilities using only its financial assets, which is a sign of financial stress.

What the trend shows:

A rising trend means the city is improving its financial buffer. A falling trend suggests the city is becoming less able to handle its obligations without borrowing or cutting services.

Our Assessment:

This metric is a similar view as the Net Financial Position metric, expressed as a ratio.  Our overall position on this metric is concerning, however the same growth in Current Assets and decrease in Total Liabilities results in a 2024 trend toward the positive. 

What it is:

The value of all the city’s assets (including infrastructure) divided by its total liabilities.

What it tells you:

A ratio above 1 means the city owns more than it owes (solvent). Below 1 means it owes more than it owns (insolvent).

What the trend shows:

A downward trend means the city is becoming less solvent. An upward trend shows improving financial resilience.

Our Assessment:

Reviewing this metric for other cities, higher performing cities are in the 0.7 to 0.85 range.  We are below that level.  This metric is materially unchanged in the past year - .553 to .561 from 2023 to 2024. 

What it is:

The total liabilities the city owes compared to how much revenue it collects in a year.

What it tells you:

This shows how many years of income it would take to pay off all debts if every dollar went to debt repayment.

What the trend shows:

If the ratio is rising, debt is growing faster than income—this is unsustainable. If it’s falling, the city is gaining control of its obligations.

Our Assessment:

Reviewing this metric for other cities, there are few cities that we have found that have a Debt to Revenue ratio greater than 3.  You can view various cities using the map here - just pick a city, open up the Google Sheet and look at the Net Debt to Total Revenues chart under "Results".   Asheville, NC = 0.36, Detroit, MI = 0.59, San Diego, CA =0.94, Grand Rapids, MI = 0.62. 

While Albany’s ratio remains high it is trending in the right direction due to a betterment of our Net Financial Position and increased Total Revenues.  There is a caveat which is our recent increase in Total Revenues is heavily driven by our State Aid which will be noted below in the Government Transfers-to-Total Revenues metric. 

What it is:

The percentage of annual revenue spent on interest payments.

What it tells you:

This shows how much of the budget is consumed by past borrowing. The higher the percentage, the less room for services, maintenance, or investment.

What the trend shows:

An increasing trend limits future choices and can crowd out basic services. A decreasing trend improves flexibility and budget health.

Our Assessment:

Our Interest to Total Revenues metric is moving in a favorable direction as our interest payments revert back to historical levels in 2024. 

What it is:

The current value of the city’s physical assets compared to their original cost.

What it tells you:

This indicates how well the city is maintaining its infrastructure. A low value means assets are aging and wearing out.

What the trend shows:

A declining trend means the city is falling behind on maintenance. A stable or rising trend suggests it is keeping up

Our Assessment:

This metric is increasing in the right direction as the value of our assets increases at a slightly higher rate than the growth rate of original cost. 

What it is:

The share of the city’s income that comes from state or federal aid.

What it tells you:

High dependency on outside funding makes the city vulnerable to political or economic shifts beyond its control.

What the trend shows:

If the trend is rising, the city is becoming more dependent on outside help. If it’s falling, the city is strengthening its local revenue base.

Our Assessment:

Lastly, how you view about this final metric is conditional upon your point of view.  As the amount of state aid to the City increases, primarily through the increase in our Capital City Funding, this does increase our revenues.  However, as our state aid increases, our dependence on state aid as a percentage of our revenue increases.   

We wanted to create a way to view and understand all 7 metrics in two dimensions:

• our current state - How good are we doing now?  
• the year-over-year trend - what is the trend in the metric over the last year, from 2023 to 2024

For each of the 7 metrics we analyzed these two dimensions using a scoring system from -5 to +5 (-5 bad, 0 neutral, +5 good).   This is a subjective exercise, where we used our experience reviewing scores of Finance Decoders for other cities around the United States (see the map here for links to other completed Finance Decoders) to come up with scores based on how other cities are doing.

In the Finance Decoder we list our assessment of each metric in the table found under the “Trend” tab in the Google Sheet.  This is an image of that table:

A better way to view these metrics is in a graph.  We created a scatterplot, seen below.   The X axis is the evaluation of Current State for each metric, positive performing metrics are on the right, concerning metrics are on the left.  The 2024 trend is found on the Y axis - positive and negative trending metrics are above and below the X axis, respectively.

What we end up with is a 4 block where we can give each quadrant a label: 

• Upper left - we’re not in a great position however we’re getting better
• Lower left - we’re not in a great position and we’re trending worse
• Upper right - we’re already good and getting better
• Lower right - we’re good but trending towards the negative

How do you dig yourselves out of a hole?  One shovel at a time.

The City of Albany’s fiscal health has a lot of challenges.  We (the City and its citizens) have 3 big financial issues:  1) we have an extraordinary amount of liabilities, 2) we have a concerning dependence on state aid, and 3) we have challenges with growing and creating new revenue streams.  These issues did not occur overnight and we know that there are people working hard and smart in the City’s government to overcome issues that originated years and decades ago.

However, we can see hope in a number of our metrics.  6 out of 7 of our key metrics could be considered to be trending positive.  Certain individual measures are trending positive as well.  For example, the City has made a major reduction of Total Liabilities in the past 6 years (our 2019 Total Liabilities in 2024 dollars would be around $1.1 billion; our 2024 Total Liabilities are $0.91 billion).  

It is the City of Albany’s budget season and we hope that the seven metrics that we are monitoring provide a check and/or a guide into how we think about our 2026 budget.  We want to be prudent with our budget growth, acknowledge that we need to grow our non-State aid revenue lines, and ensure that we are investing in our infrastructure.

Have questions or comments?  Email us at albanydatastories@gmail.com