COPAKE–Unless town officials make significant spending cuts or find some revenue soon, the town will have to borrow $160,000 to cover its bills for the rest of the year.
Copake’s Accountant Brian Fitzgerald delivered that news to the Town Board at a special meeting to discuss budget issues Tuesday, June 23.
According to Mr. Fitzgerald, the total cash balance remaining in the budget is $300,000. With the General Fund side of the budget currently in the hole by $7,200, the accountant said, he will have to borrow $100,000 from the Highway Fund “to tide us over until September.”
Among the causes for the shortfall are:
*The appropriated fund balance carried over from 2008 to 2009 was supposed to be $75,000, but came up $11,267 short at $63,733
*Franchise fees are $1,265 short of the amount estimated
*Fines and forfeiture revenues for the year were expected to come in around $105,000, but halfway through the year only $11,220 has been received, with an $82,000 shortfall expected by the end of the year
*Mortgage tax revenues are way down for the year. A check for $38,700 was received in May, but usually the May check is for $80,000 and the November check is somewhat higher. This year mortgage tax revenue was estimated at $125,000, but projections now are for about $80,000 total, a $45,000 deficit.
Councilwoman Linda Gabaccia asked the accountant why these budget shortfalls had only come to light in the town’s April financial statement.
Mr. Fitzgerald said that a $95,000 shortfall in revenue was apparent in the December 2008 budget report he submitted to the town.
When Ms. Gabaccia insisted that the first notice she had received about the problem was in April, Mr. Fitzgerald told her, “It was right there,” at the end of December and in the annual report.
On the subject of Town Court fine money, Town Supervisor Reggie Crowley said when he was a town justice, he and his fellow justice would each file reports for revenues of between $8,000 and $12,000/month. “Now we are lucky to get $4,000,” said the supervisor.
Mr. Fitzgerald told the board that Copake’s situation “is not as bad as most towns.”
Mr. Crowley said he had contacted two banks for quotes on a tax anticipation note. Salisbury Bank offered a 2.18% variable rate, .67% above prime. “If prime goes up so does the rate,” said the supervisor.
First Niagara Bank offered a 2.75% fixed rate for one year, with a second year slightly higher, but probably not over 3%, according to Mr. Crowley.
Councilwoman Gabaccia agreed to get a quote from Key Bank, so the board would have three to choose from.
Taxes will go up next year, the supervisor said, adding, “We dodged a bullet this year while a lot of towns had double digit increases.”
Already committed in the 2010 budget is an extra $34,819 to the Community Rescue Squad. Due to the dire financial straits currently faced by the squad, the board agreed at a special June 6 board meeting to pay the squad the extra sum on top of its normal donation next year. The sum is the difference between the amount the squad asked the town for this year ($154,819) and the amount the town decided to give them ($120,000). All the towns in the squad’s coverage area have agreed to do the same, according to Mr. Crowley.
Based on those reimbursement commitments the squad will borrow the amount it needs to make it through this year from the county. The alternative would be to contract with private rescue service at an “astronomical” cost, Mr. Crowley said.
Councilwoman Gabaccia suggested the town look at cutting non-essential services, such as the town’s Police Department.
Supervisor Crowley called the idea “a double-edged sword,” noting that 90% to 95% of fines collected by the Town Court result from the work of town police.
But town Democratic Club President Morris Ordover said that the town is paying more for the police than the department brings in.
Councilman Daniel Tompkins said, the police are not on duty to issue tickets, they are there to serve the community.
Ms. Gabaccia said she was just thinking about suspending police department activity in the “short term.”
“This is the busiest time, when we need police the most, between now and Columbus Day,” said Supervisor Crowley.
Councilman Tompkins said perhaps the town could sell two of its five police cars.
Resident George Filipovits suggested the town think about laying off two people from the Highway Department, saying they could be hired back in the winter and that “the town should come first.”
Mr. Crowley said, “I am dead set against laying anybody off. These are peoples’ livelihoods we’re talking about.”
Resident John Keeler called for no cost-of-living increases next year.
In response to a question about the recent judgment the town won against Salvatore Cascino, under which the town can recover some of the money it has spent on litigation, Mr. Crowley said Mr. Cascino will owe the town just over $21,000. Should Mr. Cascino fail to pay, the town’s only recourse would be to place a lien against his property, “which means we don’t see the money until he sells it,” said the supervisor.
Ms. Gabaccia called for every department head to assemble for a meeting to discuss cuts to their budgets. “This is a crisis, they should be here,” she said.
The board unanimously supported a motion making a special meeting Tuesday, July 7 at 6:30 p.m. mandatory for all department heads. The board will assume that any department head not in attendance has no objection to a 20% slash to their department’s budget.
In a phone call following the meeting, Mr. Crowley told The Columbia Paper that the town’s current budgetary woes can be traced back to the 2008 budget.
That budget was crafted by Republican Supervisor Angelo Valentino, Republican Councilman Wayne Miller and a Democratic majority made up of Councilwoman Gabaccia, Councilman Bob Sacks and former Councilman Carl Ritchie.
According to Mr. Crowley, a Republican who took office in January 2008, the prior board took $100,000 from a fund balance of $263,559 at the end of 2007 and immediately applied it to 2008 taxes.
He said 2008 revenues were overestimated by more than $100,000. Among the overestimates were: the franchise tax by $26,000; dog license fees by $1,600; interest by $4,000; building permits and fees by $12,000; fines and forfeitures by $48,000 and mortgage tax by $14,000. All those amounts had to be made up from the remaining fund balance.
By 2009 the unexpended fund balance was down to $60,000, said Mr. Crowley.
This year the town has run into some unexpected expenses, including Cascino trial fees and the creation of a full-time court clerk position that was not in the budget and cost the town “well over $35,000,” he said.
Maybe the biggest blow came in the mortgage tax category. “We got whacked on mortgage tax,” he said. “We figured low, but we did not figure it would go that low.
“My point is, it sure would be nice to have some of that $270,000 balance back,” the supervisor said.
“The focus should be on solving the problem at hand which is the huge deficit in the 2009 budget and not finger pointing,” Ms. Gabaccia said in an email statement this week. She said that solving the budget problem should include “looking back over the past five years worth of budgets to understand how we got where we are as well as projecting ahead for the next five years.” She also called for having the budget show the amount attached to each item so that the document will be more understandable.
“The 2010 budget should be broken out, based on history and move us toward where we want to go, which is certainly not in the direction of borrowing to pay bills which would be a waste of taxpayers’ dollars. Non-essential and duplicated services need to be cut for this year to get us through,” she said.
To contact Diane Valden email .