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May 25, 2010 6:27 PMPublication: The East Hampton Press

State Legislature passes financing bill for East Hampton

May 25, 2010 6:27 PM

East Hampton Town is one step closer to being able to bond for an extra $15 million in deficit financing to offset its soaring deficit, after special enabling legislation passed the New York State Assembly late Monday night.

The State Senate version of the bill passed on May 11, and the plan now awaits Governor David Paterson’s signature.

The town had received permission to issue $15 million worth of deficit financing in 2008, before the true depth of the financial crisis was known.

The town has been undergoing a series of painstaking audits to untangle numerous inappropriate transfers between the town’s Community Preservation, capital, highway department and other funds under the guidance of former town budget officer Ted Hults.

Mr. Hults was charged last year with seven felony counts ranging from defrauding the government to securities fraud, falsifying business records and filing false instruments. He signed two statements at the time implicating former Town Supervisor Bill McGintee in his actions, but Mr. McGintee has not been charged with any crime.

Supervisor Bill Wilkinson and his running mates had long stated that they believed the 
town was in deeper debt than Mr. McGintee had let on, and before they were elected in November had arranged with 
State Assemblyman Fred W. Thiele, Jr. and State Senator Kenneth LaValle to help push through additional deficit financing.

“I just got off the phone with Fred Thiele and told him how grateful we are for his leadership,” said Mr. Wilkinson Tuesday morning. “This basically is the start of rebuilding the financial structure and financial strength of the Town of East Hampton.”

“It is because of the direct leadership of Fred Thiele and Ken LaValle and the intervention of [Democratic Town Board member] Pete Hammerle, who got involved to ensure that this stayed on track with the leadership of other parties in the legislature that we got this bipartisan support,” he added. “We are in their debt.”

The town is required as a condition of that financing to file regular financial reports with the New York State Comptroller, as well as to prepare a three-year financial plan, which new budget officer Len Bernard submitted to the comptroller’s office in March.

Mr. Wilkinson said that another proposal to enable the town to seek $2 million in financing to offer voluntary separation agreements to town workers was still being discussed in committee in the State Legislature.

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Very funny pun that "we are in their debt" - the Democratic machine that socialized the town to its collapse.

Town should do a pre-packaged bankruptcy guaranteeing to pay the debt holders. More borrowing is wrong.

The Town employee contracts should all be voided in the pre-packaged bankruptcy, then renegotiated reflecting the current economic reality.

Unused Town lands sold be sold.

Taxpayers should be protected from the "out of control" legacy.

Wilkinson ...more
By voter (33), Amagansett on May 25, 10 12:30 PM
yea 5 months is way to long
By asurest (117), easthampton on May 25, 10 6:14 PM
Let's just hope that the Wilkinson team does not try to borrow more than they need so that they can show a surplus at the end of 2011. A "sleight-of-hand" surplus would make the Republicans look very, very good. However, we cannot forget that the money borrowed puts a tax burden on every property owner out here for the next ten years. There are other options which Mr. Wilkinson and Mr. Bernard appear unwilling to discuss: for instance, a one-time tax that would raise property taxes an additional ...more
By P.A.B. (23), East Hampton on May 25, 10 8:43 PM
P.A.B a Conservator? Sounds like it. In previous articles from when the previous administartion went to the comptroller to ask for the first $15 million I remember reading that the town can only borrow an amount equal to a deficit certified by the State Comptroller. So how do you borrow more than you need? A complicit State Comptroller? I don't think so.
How can you borrow to create a surplus? If you borrow don'r you have to pay it back? If I have no money in my checking account and I ...more
By connwatcher (112), east hampton on May 25, 10 10:09 PM
P.A.B. sounds like Deb Foster her plan is not good for the taxpayer but it is good for the local Dems. The deficit, gone in one year, sounds great right. Problem is the people living here now will be paying the freight for all the people who move in later if we institute a one time tax. This is the reason things are bonded for. Everyone pays their fair share if we spread out the payments and the only loser is the local Democratic Party as people realize how badly they screwed up protecting the ...more
By montaukman (98), easthampton on May 25, 10 10:53 PM
Taylor resigned, can't someone get Foster to resign.
By independent observer (34), east hampton on May 26, 10 10:46 PM
Borrowing this money just extends the time of higher taxes and diminished services. The money isn't free. I think I heard the debt service on the original 15 mil. would increase the tax burden by 6%. So would 30 mil. make it 12%? If so the board would need to lower the tax load by 12% just to keep the taxes where they are. It doesn't appear they have come anywhere near that percentage. I'll admit I'm not a CPA but it seems obvious we're in for higher taxes not lower. We need to get it in our heads ...more
By facts man (148), east hampton on Jun 1, 10 1:20 PM
The administration has already said they will effectively borrow more than is needed when they say they will sell assets and not use the money to decrease the deficit. The permission to bond is based on the deficit at the end of 2009 but the bonds do not need to be sold before December 31, 2011(we will borrow short-term until then). The accumulated deficit at the end of 2009 will be the highest point, say $30 million for this discussion. But, there is deficit reduction of $2.4 million in the 2010 ...more
By Zach Cohen (7), East Hampton on Jun 1, 10 9:34 PM
referring to my comment immediately above: the last line should be that if the Town bonds for $30 million, instead of $27 million, after selling $3 million of assets, then effectively they have bonded for the $3 million that could have been used to reduce the deficit.
By Zach Cohen (7), East Hampton on Jun 1, 10 11:29 PM
The Hampton Classic, Horse Show, Bridgehampton