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May 27, 2008 2:33 AMPublication: The East Hampton Press

East Hampton and Southampton dispute proposed limits on CPF salaries

May 27, 2008 2:33 AM

Legislation introduced last month by the East End’s state representatives that would update the bylaws of the Community Preservation Fund (CPF) has raised a lot of hackles among local lawmakers—which is, apparently, exactly what it was intended to do.

The legislation, drafted by State Assemblymen Fred W. Thiele Jr. and Mark Alessi and State Senator Kenneth P. LaValle, includes provisions that would bar the five East End towns from using any of the tens of millions of dollars in annual revenues in their individual CPFs to pay employee salaries.

The supervisors from Southampton and East Hampton towns have groused that the stipulation would cripple their land preservation efforts. The state representatives had no intention of jeopardizing preservation efforts, one of them said this week, but did want the towns to realize that they do not have carte blanche when it comes to spending millions of CPF dollars.

“Quite frankly, we put that provision in there to get their attention,” Mr. Thiele, one of the architects of the original CPF charter a decade ago, said on Monday. “I think it has worked.”

Southampton, East Hampton and Southold towns each have entire departments whose employees work solely on the planning of multimillion-dollar land purchases and whose salaries are drawn entirely from their huge CPF coffers. The CPF bylaws allow up to 10 percent of the fund’s annual revenues to be spent on “management and stewardship” of properties purchased.

Alarmed by the prospect of having to pay those salaries out of their general funds, the supervisors of the five East End towns met earlier this month to discuss the legislation. According to the two South Fork supervisors, who control nearly 80 percent of the money brought in through the CPF, all the towns were upset by the proposed limits.

“It says we can’t pay for our CPF department out of CPF money, which is just totally ridiculous,” East Hampton Supervisor Bill McGintee said on Friday. “We’d have to lay off two top quality employees or pay their salaries by charging our taxpayers, which is not the right way to do it.”

The CPF has raised some $500 million in revenues for Southampton and East Hampton since it was implemented in 1999. The CPF established a 2-percent tax on all real estate sales over $250,000, paid by the buyer.

East Hampton’s land preservation department has a $230,000 operating budget for 2008, which is to be entirely covered by the CPF, according to the town’s budget. Additionally, the town’s 2008 spending plan includes $2.2 million that is to be charged to the CPF for costs Mr. McGintee says the town incurs in managing its CPF properties. The town has not given a detailed accounting of what those costs are.

Southampton Supervisor Linda Kabot had a similar complaint about the legislation. She noted that Southampton’s CPF department has an annual budget of about $500,000, much of it salaries.

“We’re talking about a department that oversees $30 million a year in revenues—you need a department manager, you need an attorney that handles all of the acquisitions, you need a secretary for that attorney,” Ms. Kabot said. “If this goes into effect, we’d have to raise property taxes to pay for things that are attributed to the CPF. Voters may not always want to buy a piece of property if it is going to hit their property taxes.”

Mr. Thiele says that the outrage of the two town supervisors is exactly the reason the stipulation excluding salaries from CPF expenditures was included in the legislation. It was “an elbow to the ribs” of the local governments that, he said, have been overstepping the bounds of the CPF’s management and stewardship allowances for years.

“It seems to me the towns have really been pushing the envelope when it comes to charging the CPF for things they’re calling management expenses,” Mr. Thiele said. “This was not intended to be a parks operation and maintenance fund in which anything remotely related to CPF purchases could be charged back to the fund.”

Mr. Thiele said the suddenly responsive supervisors have asked to meet with him and Mr. LaValle and Mr. Alessi on Friday, May 30, to discuss the CPF legislation. He said he expects to be able to reach a compromise with the towns and that the final legislation will allow some “legitimate” salaries to be paid using CPF revenues—assuming the towns change their spendthrift ways.

Ms. Kabot and Mr. McGintee said that they will also challenge a rider in the proposed legislation that calls for the towns to submit annual independent audits of their CPF programs, to be paid for out of town operating funds. Mr. Thiele pointed out that annual audits of town operating budgets are required in every town and that they are paid for out of town funds. The CPF audits should be no different, he said.

In March, East Hampton officials revealed that East Hampton Town had borrowed nearly $8 million from its CPF coffers to pay bills and payroll when it ran out of money in late 2007. That news was followed shortly by the revelation that the town had for years been paying 10 percent of the operating expenses in various town departments out of CPF revenues without providing a detailed accounting of their CPF-related work.

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