New department heads are arriving at City Hall to fill key leadership positions as City Manager Matt Alexander brings a new team on board.

Peekskill is facing a challenging financial outlook in 2024 and adding experienced professionals will help determine how well the city administration continues to provide services to residents while trying to minimize the needed tax increases to pay for ever-rising expenses.

Alexander took the reins as city manager last May from his predecessor Andy Stewart. Prior to that he was the city’s comptroller beginning in November of 2020. Before coming to Peekskill, Alexander was the mayor of Wappingers Falls for nearly 14 years.

Three of the city’s key administrative posts have opened up since last fall. First, Alexander brought in Toni Tracy as city comptroller in 2022. Tracy served as comptroller for the Town of Walkill for eight years until July of 2022. Prior to that she was the financial director of the City of Beacon for 23 years.

Search on for corporation counsel

In late October this year, Peekskill assistant Corporation Counsel Michael Hartman was named acting Corporation Counsel to replace the former Counsel Tim Kramer. Kramer appears to have resigned his position with the city after serving as corporation counsel for approximately two years. He moved up from the assistant position, which he held when prior city attorney Melissa Ferraro resigned to become village administrator in Dobbs Ferry in December 2021.

Hartman joined the city as assistant corporation counsel in April of 2022. He presented the proposed budget for the corporation counsel’s office in October as acting corporation counsel.

Kramer was involved in handling a million-dollar lawsuit that the city agreed to pay a plaintiff injured in a car crash caused by an off-duty city police officer. The city did not respond by the required deadline and lost a default judgment in that case. Kramer said the file was misplaced in his office, causing the failure to respond on time. The city used $1 million from its fund balance to pay the judgment.

Planning director retiring

Now, the city’s long-time Planning Director Jean Friedman is retiring after 22 years of service here. Friedman became Director of Planning in April of 2015 after serving as a city planner in Peekskill for nearly 14 years.

The city is believed to have narrowed the search for the new planning director and is expected to hire Friedman’s replacement before her retirement is effective at the end of December.

In addition to running their departments, top managers may be tapped to serve as acting city manager when Alexander is on vacation or out of the city. The city charter leaves it up to the city manager to appoint someone to serve in his absence, subject to the approval of the common council. Former city corporation counsel Kramer, for example, served as acting city manager in January of this year.

The Peekskill Common Council is expected to approve a 2024 budget at its meeting on Nov. 13 following a required public hearing that same evening. That budget will impose a 3.5 percent city property tax increase, nearly double the 2 percent state cap on taxes. The council can override the cap limit with a 60 percent (five members) vote of the seven-member Common Council.

The General Fund budget for 2024 totals $50,972,233. an increase of $417,375 over the 2023 budget of $50,554,858.

Depleting city’s fund balance

The proposed 2024 budget will use about $2 million of the city’s undesignated fund balance, leaving just $3 million in that pool of money at the end of next year. From 2014 to 2021, the city steadily increased its fund balance from $0.5 million to $8.9 million.

Declines in revenue from taxes on house sales and mortgages and double-digit increases in employee medical-insurance costs are putting a squeeze on Peekskill’s financial outlook. The city manager is projecting the need for annual 3.5 percent property tax increases for four years and suggested that the increase might have to be 4.5 percent to balance future budgets.

There is a possibility that, unless the expected hike in health insurance costs comes in lower than anticipated, the city will have to consider layoffs early next year. The city has about 229 full-time and 22 part-time, year -round staff, for a total of 251, an increase over the previous year’s 235 head count.

Alexander did not return several requests for comment.