Schenectady, N.Y., faces an unstable financial future, but increased economic development and better long-term financial planning point to signs of progress, according to an audit by New York's state comptroller, Thomas DiNapoli.

"The ongoing efforts of the mayor and city officials to achieve cost savings and encourage economic growth have started Schenectady down the path to recovery," DiNapoli said.

The audit found that officials have adopted realistic budgets, made reasonable revenue and expenditure projections, and is planning retirement incentives and staff reductions in 2013.

The city, rated A3 by Moody's Investors Service and A-minus by Standard & Poor's, has in the past struggled to balance its budget and has limited resources and minimal cash available.

DiNapoli recommended that the city implement a plan to eliminate the deficit, continue to pursue consolidation and shared service opportunities, and continue efforts to collect overdue taxes.

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