Not A Surplus - 27 East


Southampton Press / Opinion / Letters / 1784748

Not A Surplus

I was surprised by Michael Irving’s misleading and erroneous Letter to the Editor [“Classic Bait-And-Switch,” Letters, May 20], particularly given the mailers he’s sent awarding himself an “A” and Mayor Jesse Warren an “F” for budgetary competence.

Irving began by explaining that Mayor Warren reduced taxes by “underestimating revenue.” This doesn’t make financial sense at all. An actual bait-and-switch would be overestimating revenue to cover shortfalls — but Mayor Warren actually did the opposite by adopting prudent and conservative budgets. Mayor Warren should be applauded for cutting waste from the village budget rather than asking the village taxpayers to foot the bill.

More worrisome is Irving’s confused statement that the village’s “$10 million surplus” is actually an indication of financial health, when the “surplus” is just an accounting term for the available cash the village has on hand. According to the village 2020 audit, the cash actually decreased by $864,000 in 2020 as our debt climbed from $101 million to $115 million. (By the way, Irving’s protégé, Kimberly Allan, remarkably stated that the village doesn’t have this much debt, as this amount is only a future obligation. She should debate that case with the village’s auditors and creditors.)

Think of it this way: If, in your own finances, you have $10,000 in the bank (akin to the village surplus account), but you have debts of $100,000, could you honestly claim to have an overall $10,000 surplus? Of course not. You’d actually be $90,000 in debt. That’s true of our village, but on a much, much larger scale.

Mayor Warren was elected in 2019 and inherited $101 million of debt at that time, up from $6.8 million in 2007, two years after former Mayor Mark Epley was first elected. The increase in debt from 2019 to 2020 was a result of the compounding of liabilities that had already been created and had nothing to do with decisions Warren made. (A recent example is that when Irving was mayor, he decided to sign an unusually long six-year deal with the police union, while at the same time opting in for a more beneficial pension plan that cost the village an additional $507,000 in debt.)

The result is that the long-term debt of the village has compounded at 25 percent per annum since 2007, leaving the village with difficult future decisions on how to fund critical investments in a sewer system and much needed infrastructure improvements.

After 14 years of mismanagement by Epley/Irving, according to the 2020 audit our village liabilities now exceed our assets, creating a “net deficit” of $44.6 million, not a “surplus.”

An important qualification for mayor is understanding the finances of the village so as to navigate forward. Sadly, Irving doesn’t.

Eric Ruttenberg