In Budget Talks, Questions of Dollars and Sense
What to do about the town’s aging scavenger waste treatment plant, the question of whether residents would be willing to pay taxes to hire additional code enforcement officers, and issues of budget strategy — specifically, what to do with some $4.2 million that was borrowed to help address a budget deficit, but was not needed — took center stage during a discussion of East Hampton Town’s 2013 budget on Tuesday.
Town Councilwoman Sylvia Overby asked about the disposition of the $4.2 million, which was part of a total of $26.7 million borrowed under special New York State authority to get the town back in the black after deficits accumulated under a prior administration.
After 2011, when budget cutbacks and careful spending left the town coffers “better than expected,” Len Bernard, the town budget officer, said, there was a $4.6 million surplus.
The town had first borrowed $15 million for the deficit financing. For a second round of borrowing, “the original plan was to borrow $14.8 million,” Mr. Bernard said, to cover the full amount of the deficit “and an additional amount, in order to create some kind of cushion in the A and B funds,” the town’s two main operating funds, which were affected by the deficit.
However, he said, “we didn’t want to over-borrow” but “to borrow a reasonable amount.” The plan, he said, was sanctioned by the state comptroller and the town’s financial advisers.
The $4.6 million has not, so far, been allocated, Mr. Bernard said, although several reserve funds, permissible under state finance law, were created, including funds to accrue money for state retirement system costs for employees, to cover accrued benefits payouts to employees, and for capital projects.
Once earmarked for one of the funds, money may not be spent on anything other than its stated purpose.
Ms. Overby said that the town is paying interest on the borrowed money, and that she would feel more comfortable if there was a “game plan,” or set of rules regarding how it could be used.
State finance law governs use of the dedicated funds, Mr. Bernard said, and allows a town board to use the entire amount in a reserve fund in a single year to pay the costs for which it is earmarked.
“That’s a problem,” Ms. Overby said. “Because if you do that in one year, it creates a hole in the budget for next year,” which would need to be filled by a rise in taxes.
The tentative budget prepared by Supervisor Bill Wilkinson proposes the use next year of $1.2 million from the retirement cost reserve fund. As retirement funding is an ongoing expense, should that fund be depleted in 2014, that money would have to be raised through taxes. The draft budget also relies on the use of over $900,000 from two reserve funds for debt service.
Also on Tuesday, Ms. Overby relayed an interest on the part of members of the Amagansett Citizens Advisory Committee in the addition of seasonal code enforcement officers to address violations regarding “noise, litter, and quality of life” during the summer. She asked the board to consider adding money to the budget for those positions.
“What I’m hearing,” said Councilman Peter Van Scoyoc, “is that people would be willing to bear the additional cost to protect their quality of life . . . given [that] the negative aspects far outweigh the financial impact.”
“I would not support that,” said Councilwoman Theresa Quigley, citing her recent time spent in New York City, where she is living most of the week in order to be near a daughter who is recovering from an injury. People feel more free there, she said. “I don’t believe that we need to turn our town into any more of a town that has people ready to ticket us,” she said.
“I would prefer that we took the approach of educating people. I’m not suggesting there isn’t a problem. I’m suggesting there’s a more positive way to address the problem,” Ms. Quigley said.
Though not disagreeing with the idea of education, “I’m not sure that alleviates the problem,” Ms. Overby said. Councilman Dominick Stanzione suggested that Mr. Wilkinson might be able to get more code enforcement coverage by shifting personnel.
A discussion of the future of the town waste treatment plant — now being operated as solely a transfer station and the topic of perennial disagreement among board members — resulted in no change to the tentative budget, which contains funding to keep the transfer station open for the first three months of the year.
Ms. Overby and Mr. Van Scoyoc had inquired about including enough money to keep it open for a longer period, as the process of crafting a comprehensive wastewater management plan that will, among other issues, address the future of the plant, has just begun. Mr. Stanzione suggested shutting it altogether.
However, after Mr. Bernard informed the board that state finance law and the state comptroller, who is overseeing East Hampton’s budgeting, would allow money to be advanced to the transfer station, if necessary, from other parts of the sanitation budget, board members did not press for revisions to the draft budget.
One change to the budget the board agreed on was the addition of a $10,000 budget line, suggested by Mr. Van Scoyoc, to begin work to identify and address town properties where handicapped access does not comply with the Americans With Disabilities Act. Mr. Van Scoyoc has been working with town staff to fix the problems, and suggested a minimum allocation of $15,000 for the project next year.
Mr. Wilkinson asked what year the act went into effect and was told it was in the 1970s. “Where have these inventories been?” he asked. “It’s never come up until now.”
“I’m proud of the fact, then, that I’m the one bringing it up,” Mr. Van Scoyoc said.