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Aug 27, 2013 2:16 PMPublication: The East Hampton Press

New York Secretary of State To Visit East Hampton Town

Sep 3, 2013 3:25 PM

New York Secretary of State Cesar A. Perales is scheduled to visit East Hampton Town this Thursday, September 5, to receive an update from Supervisor Bill Wilkinson on the town’s recent fiscal restructuring efforts to make local government run more smoothly.

The visit is another feather in the financial cap for the Wilkinson administration, following a more than half-million-dollar state grant in June and an upgrade last month of the town’s credit rating by Moody’s Investors Service from A1 to Aa3—a boost that points to a rosier, more stable financial future following several years of instability.

“They tie together,” said Mr. Wilkinson. “What was really nice about the Moody’s upgrade was that it was another validation for the team that what they have done is not only right but critical for the turnaround for East Hampton, and it’s going to be replicated in other parts of the state if the governor has his choice.”

The supervisor, a Republican who is not seeking reelection in November, also alluded to challenges ahead for the new Town Board, which is expected to have a Democratic majority following this fall’s election. “It’s also an expectation of what that new team has to do to stay on course,” he said.

The state award came from the Department of State’s Local Government Performance and Efficiency Program as part of Governor Andrew M. Cuomo’s agenda to improve efficiency and reduce costs at all levels of government, according to a statement from the town.

Mr. Wilkinson inherited a more than $27 million deficit when he took office in 2010, following a financial mess that resulted in his Democratic predecessor Bill McGintee’s resignation, as well as the resignation of former Budget Officer Ted Hults, who later that year pleaded guilty to securities fraud and official misconduct.

The Wilkinson administration implemented a fiscal recovery plan that included downsizing departments and reducing staff. The $536,425 state grant was awarded to the town for implementing a savings plan that will result in a more efficient local government and save taxpayers $4.2 million a year, representing an 18-percent drop in the tax levy, according to the town.

“The Town of East Hampton has made a wise investment in the future by reducing expenditures, which will ultimately provide savings for the town’s taxpayers,” Mr. Perales said in a statement. “The New York Department of State commends East Hampton’s leadership for their innovative thinking, which will vastly improve their communities.”

Mr. Perales is expected to arrive in East Hampton shortly after 10 a.m. A brief event at Town Hall on Pantigo Road will follow, during which Mr. Wilkinson will discuss projects and efficiency. Mr. Perales and State Assemblyman Fred W. Thiele Jr. will also speak.

Their comments will be followed by a media question-and-answer period, a tour of renovated areas of Town Hall at 11 a.m., and a reception.

The credit rating upgrade, meanwhile, took into account approximately $115 million of debt, and noted that the town’s financial outlook is stable, according to Moody’s, which added that the new rating reflects improvement in the town’s financial position over the past three years.

That means that the town will enjoy a lower interest rate, so the cost of borrowing will be cheaper, which is important, Mr. Wilkinson said, because “sooner or later you have to borrow,” to buy equipment and fix roads, for example.

The company attributed the town’s improved rating to conservative budgeting and strengthened financial management practices.

“The rating also incorporates the town’s significant deficit financing, as well as a moderate and shrinking debt burden and sizable tax base characterized by strong wealth and income levels,” reads an agency statement. “The stable outlook reflects our view that the town’s financial position will continue to stabilize, given strong budgeting and formal policies to maintain ample reserves.”

Town Budget Officer Len Bernard last week called the new rating significant, noting how it can lower the amount of interest the town pays when it sells debt. A financial advisor has estimated that the new rating will save the town about $100,000 in a little over nine years, compared to what it would have paid under the old rating.

Since the recent upgrade, the town has sold a little more than $2 million in bonds and $7 million in notes, he said.

The financial hole was the first thing Mr. Wilkinson had to tackle upon becoming supervisor, Mr. Bernard noted. The town had been downgraded to A1 and stayed there until now, he said.

“It’s taken three and a half years to repair the damage,” Mr. Bernard said. “This is significant, because it shows that the town has begun to climb back to where it once was. Normally, when a town like East Hampton falls into financial troubles like it did, the downgrades happen fast, but it’s hard to climb back up.”

Fiscal restructuring and streamlining government are among the efforts credited with helping the town restore its financial health.

The town presented its case for an upgrade to Moody’s in Manhattan early last month, Mr. Bernard said.

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