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Feb 9, 2010 6:57 PMPublication: The East Hampton Press

State representatives request amended legislation to ease East Hampton Town deficit

Feb 9, 2010 6:57 PM

State Assemblyman Fred W. Thiele Jr. and State Senator Kenneth LaValle announced at a press conference at East Hampton Town Hall on Friday that they planned to ask the State Legislature to amend legislation passed in 2008 to increase from $15 million to $30 million the amount the town would be authorized to borrow to plug its deficit.

Mr. Thiele said the increase in the amount of money the town would be authorized to borrow would cover not only the 2007 and 2008 deficits, as originally planned, but also the shortfalls accrued through 2009.

Mr. Thiele said the process of a municipality asking the state permission to issue bonds to cover debt is not that rare, but that doing it twice “is a little unusual.” He said that to his knowledge no other town had gone through the process twice.

“I think we can make a case for this legislation,” he said. “But there will be no third time.”

He said that in 2008, officials believed that the town’s deficit would never come close to $15 million. But the deficit is now estimated to be $26 million, Town Budget Officer Len Bernard said at the press conference.

Mr. Bernard said that estimate is conservative but that “things pop up, literally, on a daily basis” that are making it difficult to come up with an exact total. He said that often those surprises involve funds that were taken from the capital fund in 2008 and used for operating costs.

“That money needs to be paid back to the capital fund,” he said.

Mr. Thiele said the increased amount of debt the town could sell would also help the new Town Board with its plan to reorganize the town payroll by offering incentives for voluntary retirement and avoiding layoffs.

“These plans cost money,” he said, “money the town does not have. This bill allows the town to increase the amount of debt it can sell and gives it the flexibility to spread that cost.”

Senator LaValle said he expects the bill to reach the legislature in June, but the town cannot actually bond the debt until that deficit amount is certified by the state comptroller. Mr. Bernard said that his plan is to have quarterly reports to the state by the end of March and prior to that submit the town’s three-year financial plan, which he said will move the process along.

Assemblyman Thiele said the deficit has been certified for 2007, but not for the years following. But he said that he, Mr. LaValle and the members of the Town Board are in daily communication with the state comptroller to keep information about the deficit up to date and the process transparent. Mr. LaValle said that the comptroller is the “central player” in passing the legislation, and because the relationship with him has been cooperative thus far, he is confident the bill will pass.

“As long as the comptroller is on board, I assume that this legislation should not be a problem,” he said.

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$26 million - incredible. And 2 consecutive years of massive property tax hikes. It will be very painful but its time to start cutting. Not with a scapel; not with a knife. It needs an ax.
By zaz (197), East Hampton on Feb 10, 10 6:15 PM
it amazes me how mismangaed the MCgintee administration was. He ruins the town and then collects his tax payer pension and benefits.
By razza5350 (1911), East Hampton on Feb 11, 10 10:00 AM
Well, at least it's not a "bail-out."

Or is it?
By Frank Wheeler (1826), Northampton on Feb 12, 10 5:09 PM
Sounds like a bailout to me. Through mismanagement and neglect local officials cause huge deficits and then appeal to the state to borrow twice the amount of authorized borrowing. I thought Republicans were the "fiscal conservatives"?
By peoplefirst (787), Southampton on Feb 16, 10 1:05 PM
The Town should resolve the deficit by selling town property, freezing capital spending and halting the expanding employee base. The town's legal responsibilities for under accrued employee liabilities incurred by previous administrations force immediate action. Wilkinson and company needs to cure this deficit by selling unused town property now. Sell the property to CPF (irony)! Get the deficit resolution back in East Hampton hands, remove the jokers from Albany as fast as possible. Do something ...more
By voter (33), Amagansett on Feb 16, 10 6:12 PM