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Apr 15, 2009 11:53 AMPublication: The East Hampton Press

East Hampton Town may be due for stiff budget cuts

Apr 15, 2009 11:53 AM

East Hampton Town has just begun to trim the fat from its 2009 budget, despite the widespread agreement that the town could face a revenue shortfall in its $68.7 million budget amounting to the millions of dollars this year.

Members of the town’s Budget Advisory Committee on Monday night urged the Town Board to undergo a line-by-line analysis to see what can be cut from this year’s budget, as its members had agreed to do at the end of March.

Supervisor Bill McGintee acknowledged last month that the town is facing a $250,000 shortfall in mortgage tax revenue for the first quarter, which, if extrapolated over the course of the year, would lead to a $1 million shortfall at the end of 2009. The committee’s chairman, Bob Kouffman, said that, combined with declining county sales tax revenue that could lead to a decline in public safety funds for the town and a likely shortfall in fees collected by the town’s Building Department, the town could be facing a shortfall of $1.9 million by the end of the year.

Mr. McGintee said Tuesday that he has begun to meet with department heads and plans to cut expenses and move approximately $340,000 from the town’s budget and place it in contingency funds. He added that he is considering a proposal from the police department to forego between $60,000 and $80,000 in expenditures. He said that he hopes to have a total of $400,000 in contingency funds. The supervisor did not discuss the plans in depth, but did say that he didn’t need the Budget Advisory Committee to tell him that he needs to tighten spending at Town Hall.

Last year’s books, which have not yet been reconciled, are also of concern. The town had initially projected that it would face a budget shortfall of $4 million in 2008, but Mr. McGintee has said that he is concerned that health care expenses could add to that deficit. The 2008 Annual Update Disclosure, a document that is usually prepared by March of the following year, will likely not be ready until May.

Town Comptroller Janet Verneiulle, in a presentation to the Town Board on Tuesday, said also that $600,000 in public safety revenue anticipated by the town in 2007 was not received until 2008. She added that a $775,000 appropriation of a surplus from 2007 that was placed in the 2008 budget will also add to the deficit because those surplus funds did not exist.

The declining revenue coming into the town’s Community Preservation Fund as the pace of land transfers slows is also of concern.

In past years, the town had borrowed money to finance land purchases. This year, the town will need to pay $3.8 million in debt service on that borrowed money. Committee member Job Potter, who discussed the CPF issue with the department’s director, Scott Wilson, said that Mr. Wilson believes that the CPF can put off upcoming closings “until they see that the cash flow is sufficient.”

Mr. Potter added that the department has $7 million in the bank now, and could easily cover its debt service using that money and close on the purchase of the former Boys Harbor property on Three Mile Harbor. The town, which has agreed to a joint purchase with Suffolk County, is already in contract to buy the property, while the county has not yet signed the contract.

Mr. Potter said that Mr. Wilson has spoken with real estate brokers who have said that business is improving.

“What happens if those revenues don’t materialize?” asked Mr. Kouffman. “Given our economic state I’m not sure that any assumptions … are valid at this point.”

Also at Monday’s meeting, members of the committee said that they still had not received a document detailing the town’s staffing levels between 2005 and 2009, despite the fact that they’d asked for those figures in February.

Ms. Mansir said that a staff member in Town Hall was in the process of preparing the document and had found $800,000 in the budget for positions that were never filled.

“So that’s good?” asked Mr. Potter. “Is this a result of attrition and not hiring?”

“I’m shocked. We asked for it at the first meeting,” said Mr. Kouffman. “We’d like to know. I would assume the Town Board members would like to know and I would assume the community would like to know.”

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Thank you all for your hard work, honesty and not jumping to make recommendations without all the facts ( I doubt you will ever get them).You should all be on our Town Board!
By disappointed (96), wainscott on Apr 15, 09 3:06 PM