Finance Director Presents Updated Financial Report to Cortland Common Council

The City of Cortland’s Director of Administration and Finance, Chuck Shager, delivered his first financial report to the Mayor and Common Council since assuming the role last month — and warned it may be his most difficult one.

“This is my first [finance] report and probably, hopefully the worst reporting I submit to you,” Shager told council members.

Shager outlined several significant fiscal concerns, including errors in the previously adopted 2026 budget, a projected $2.5 million loss for the 2025 fiscal year, and accounting discrepancies affecting current city operations.

Shager reported that the city is facing an estimated $2.5 million deficit for 2025, largely due to revenues falling short of projections. While overall expenses came in lower than budgeted, anticipated revenues did not materialize at expected levels.

He said he believes approximately $2.4 million was incorrectly listed as “miscellaneous revenue” in the 2025 budget. According to Shager, that amount represented General Fund money already spent on capital projects and should have been recorded as funds due back to the General Fund, not new revenue.

“The person creating this budget, I believe, from what I’ve seen, thought it was going to be revenue,” Shager told the council. “They budgeted it as such revenue as $2.4 million dollars. That is where the majority of the error in this whole process happened.”

Since taking the position, Shager said he has reviewed the 2026 budget line-by-line and uncovered multiple discrepancies. Some of those issues have delayed the approval of a new union contract with Teamsters representing wastewater workers.

He emphasized that accurate balance sheet management is critical.

“In my experience working for multiple municipalities, the majority of people look at what was budgeted and what was actual. But the main aspect of any municipality or private business is the balance sheet — and the balance sheet seems to be forgotten quite a bit,” Shager said.

Shager cited several additional accounting issues, including $569,000 budgeted in the General Fund for fire station windows while the expenses were recorded in the Capital Fund, and approximately $730,000 in CHIPS funding that he said was similarly misallocated. He also referenced a grant anticipated by the previous finance director that was expected to offset general fund expenses but, according to Shager, should have been applied within the Capital Fund.

“You have to match up your expenses and revenues in the same funds,” he said.

Shager reported progress in addressing a projected $1 million budget gap for 2026. He said the shortfall has been reduced to approximately $296,000 as of Tuesday’s meeting. He continues working with department heads to identify additional cost savings.

“The real problem with the 2025 budget is that the city did not meet the revenue numbers that were anticipated in that budget,” Shager said.

In addition to the General Fund concerns, Shager reported a $250,000 deficit in the city’s water and sewer funds for 2025, also attributed to revenues not meeting projections.

Despite the broader financial challenges, Shager noted one area performing better than expected. The city has been under budget on Health Reimbursement Arrangements (HRAs). As of February 9, the city had spent $57,000 on HRAs, compared to the budgeted amount of $75,000 per month. Shager also said he has not heard of any complaints since the city transitioned to the new health coverage structure.