IT WOULD BE UNFAIR to call the Chatham Village Board The Gang Who Couldn’t Add Straight. So let’s stipulate, as lawyers say, that the board is not a gang.
Their math skills, however, have been remarkably consistent for the last year or so. Consistently screwy.
The mayor and the four board members are honest. They serve the village to the best of their ability. You see their dedication at every board meeting. They’re all smart, too.
Mayor Tom Curran came into office in 2011 as a reformer; he and successive boards built up $350,000 in reserves over the next three years later after starting with practically nothing extra in the bank.
But over the last two years water/sewer rates have doubled and the those vital services were running a $370,000 deficit as recently as May. There were smaller signs of potential financial turmoil too, like the sudden decision last winter to charge steep fines for failure to remove snow from sidewalks. That ended as quickly as it began following a public outcry.
And this week comes the news the IRS wanted to know the whereabouts $52,104.07 in unpaid payroll taxes and other payments. The feds say Chatham owes $2,333.36 in interest and $22,986.88 in penalties.
The written statement that revealed this latest episode, dated August 17, begins: “Questions have arisen from members of the public in relation to Village finances and financial procedures, recording, and oversight.”
Wait. You mean they wouldn’t have told village residents about this little mistake that’s going to cost taxpayers thousands of dollars if “members of the public” hadn’t asked? Passing the buck in the first sentence of your guilty plea isn’t the best way to build trust or sympathy.
As for the $52,104.07 owed the IRS, the statement says that “Village accountant [Bob] Patterson advises us that to his knowledge, those funds were not missing, but would have been held in the Agency account for payroll and disbursements.” To a lay person hearing that the accountant says the money “would” have been in a village bank account is unsettling. Is it there or isn’t it?
The good news is that the statement says, “Much of this has now been paid.” The bad news: They don’t say how “much” isn’t paid and why.
Let’s hope Chatham officials are able to convince the feds to give the village a break. After all, the board didn’t mean for the village to act like a tax cheat. Honest.
The statement lists three simple, practical steps the board has already taken to improve its financial controls. Why didn’t somebody take these steps before?
The Village of Chatham has plenty of company when it comes to bad financial decisions and fiscal misfortune. A few years ago the Town of Chatham found itself in deep fiscal trouble and a new board had to make difficult choices to get it back on a sound financial footing. And in 2011 Pegeen Mulligan-Moore was sentenced to prison for stealing hundreds of thousands of dollars from the Town of Kinderhook and additional funds from Greenport.
Two very different approaches might help prevent Chatham’s problem from recurring. The first is that the state could set higher standards for the management of village and town municipal finances. Why aren’t the steps that the Village Board is taking now required by the state as best practices? The answer is probably because that would be yet another unfunded mandate from the Albany.
The other choice is for the county to take over the routine financial chores of all local government units, putting the day-to-day money management tasks in the hands of an office of financial services. The county might not want that responsibility, but the most strenuous opposition would come from traditionalists who would see this as a further weakening of state’s tradition of home rule.
But even traditionalists don’t want to see their money squandered on IRS penalties that could be avoided. And it would be easier to hold the county accountable for fiscal mismanagement than to expect that the state could accommodate the distinct needs of individual villages and towns.
The Office of the State Comptroller may conduct an audit and offer recommendations for improving how the Village of Chatham handles its finances. But for now the Village Board faces the task of convincing village residents that board members know what prudent financial management looks like. The citizens elected to govern the village have taken important actions, though more are needed. But they’ve overlooked one thing so far in this latest mess. An apology.