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Feb 4, 2009 12:33 PMPublication: The Southampton Press

Town capital budget discrepancy is downgraded

Feb 4, 2009 12:33 PM

What was originally reported to be a $19 million discrepancy in the Southampton Town capital budget last week might actually be closer to a $250,000 discrepancy, according to the latest calculations put forth by Town Supervisor Linda Kabot and Comptroller Steve Brautigam.

But even that number is subject to change, the comptroller warned this week.

The new estimate comes more than a week after Ms. Kabot revealed that the town’s capital fund budget and actual balance do not match up.

The supervisor first mentioned that the town’s computers showed $35 million in capital funds, though only $16 million was actually in the bank, during a Town Board work session on January 23. Since then, Mr. Brautigam said Ms. Kabot directed him to do some investigating.

“She asked me to go back and make a quick calculation after it was discussed improperly in public,” Mr. Brautigam said, adding that the number “changes every day” as some of the 170 capital accounts go back 10 years. “I have to go back and tie the Town Board resolutions to the funding.”

Town Management Services Administrator Richard Blowes, who stepped down Monday from his post as deputy supervisor in order to focus on town finances, said he would rather hold off on commenting about the updated $250,000 figure.

“I would feel more comfortable waiting for the entire analysis to be complete until we make a determination on a definitive number,” he said. Previously, Mr. Blowes said a detailed accounting of the capital fund will be complete and made available by April, the end of the first fiscal quarter.

But Ms. Kabot expressed confidence in Mr. Brautigam’s accounting and said she stands behind the latest number.

“That figure came from the comptroller,” she said. “He’s the one responsible for doing the math and drilling it down and piecing it all together. I feel comfortable in putting out that number.”

But Town Councilwoman Anna Throne-Holst, who has been critical of the fact that the Town Board has not received a thorough accounting of the capital program, said she does not understand the drastic reduction in the ledger.

“How is it she has that figure and we don’t?” Ms. Throne-Holst said.

Capital—or long-range—projects, such as the construction of buildings and roads, are funded mostly through the issuance of bonds and financed over a period of time. That differs from the operational budget, which pays for day-to-day government functions, and is funded through the more predictable revenue stream of property taxes and fees.

The controversy over the capital budget, according to Mr. Brautigam, stems from a lack of understanding of how capital projects are funded—some are funded through bonds and others through grants and applications. Previously authorized, but unissued bonds, Mr. Brautigam said, are responsible for the capital funds dilemma.

Ms. Kabot said the practice of authorizing money for capital projects ahead of time, then back-filling the project with the funding at a later date, is a common one.

“There’s no criminal activity afoot here,” she said. “But we don’t want to do it this way anymore. Going forward for 2009, we’re going to be segregating each capital project into its own individual account.”

The comptroller’s latest calculations haven’t alleviated Ms. Throne-Holst’s concerns. “I’ve been asked to go along to get along,” she said. “But now, time is up.”

The councilwoman is now seeking documentation substantiating all the town’s capital projects, either authorized by Town Board resolution or adopted in the town’s capital budget. Ms. Throne-Holst said she has been asking for this documentation for almost a year.

Town Councilman Chris Nuzzi has also expressed frustration with the delay in the capital numbers, and former Town Councilman Dan Russo recently said that he began asking for the same figures when he was appointed to the board last February.

In explaining the delay, Ms. Kabot said reconciling the capital budget is a “monumental task,” though she promises a full accounting is forthcoming. The supervisor also said she plans to ask the New York State Comptroller to review the town’s final report on the capital budget.

Ms. Kabot said Town Board members are upset because the town’s capital records are not “neat and tidy.” But Ms. Throne-Holst said it shouldn’t take a year to put together the information she and other board members want. “I’ve been around enough budgets to know that it doesn’t take a year to get things ‘neat and tidy,’” she said.

In the meantime, Ms. Kabot said department heads have been advised that all “old” capital projects are frozen until the ledger is balanced. The supervisor said critical public safety works and road improvements will be given top priority. Town Councilwoman Sally Pope recommended the freeze at the board’s most recent work session, on January 30, arguing that the town should hold off on any further projects until the capital budget is reconciled.

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how can $19 million be unaccounted for? shouldn't board members know exactly what is in the bank before approving resolutions to spend town money? it's basic money management. you need to know how much money is on hand before you spend. mr. brautigam, we should not have any discrepancy in the budget, especially in the millions! ms. kabot, when should the people of southampton be "alarmed"? we all work hard for our money and it is a disgrace to see all this happening, especially in this economy. ...more
By fdp (23), southampton on Jan 31, 09 8:25 AM
Wow! This information should be at their fingertips - not three months down the road. Someone's got alot of 'splainin to do. If Blowes can't produce the information maybe the state Comptroller or Attorney General can.
By William Rodney (561), southampton on Jan 31, 09 9:25 AM
"Alarmist", "Sensational” This is you response, Supervisor Kabot?

As stated on the town web-site, “Pursuant to Section 23 and 63 of the Town Law, the Supervisor is the Chief Administrative and Fiscal Officer”

Linda Kabot, this is all you!! The people of the town deserve to know where their money is being spent, Madame Supervisor. We do not want to hear double talk and smoke screens telling us that you are so busy being transparent that you cannot give the public an accounting ...more
By SHNative (554), Southampton on Jan 31, 09 9:36 AM
It's the fault of the press, in this case the Southampton Press. Now there's an original response!
By Viewpoint (26), Southampton on Jan 31, 09 10:39 AM
$19 million is reason to be alarmed-hopefully the Press will report every week on this problem and sell lots of papers. Linda, this story is not going away.
By Lefty46 (56), Westhampton on Jan 31, 09 12:31 PM
Maybe the Town of Southampton can be re-organized as a Bank Holding Company and qualify for TARP funds from the federal government.
By davidf (325), hampton bays on Feb 2, 09 1:38 AM
One would suppose that this money did not disappear overnight, and one would also suppose there must have been red flags raised earlier. In my thinking this is typical Republician mode of running government...absolutely no transparency....Again I say Richard Blowes is at the base.
By rabbit (65), watermill on Feb 2, 09 2:33 PM
Discrepancy downgraded? SAY what???????
By Terry (380), Southampton on Feb 4, 09 1:16 PM
Kabot has proven herself incompetent to run the town. Even loyal Richard has deserted her. Please Chris, run this November for Supervisor and make Anna your deputy supervisor. You two are clearly the only ones we can trust.
By Hampton (50), Westhampton on Feb 4, 09 1:35 PM
Please excuse the re-post of these comments but they apply here as well.

Where was Mr. Blowes before this blossomed into a crisis? Will his return to full-time financial activity improve the past data that was missing? Will we finally see data that should have been there all along - but wasn't?

$19,000,000 or $190.00 or $250,000 - the amount doesn't really matter. Poor management and inaccurate information appears to be normal Southampton Town policy. Whether the money is "Missing" ...more
By foodie (74), Remsenburg on Feb 4, 09 2:12 PM
Start counting how many times this number changes. With accurate accounting and responsible government the only acceptable number should be zero.
By Lefty46 (56), Westhampton on Feb 4, 09 5:40 PM
Come on folks - I worked in the New York City Transit Authority budget division- both Capital and Operational - its not that hard in this day of spreadheets to keep track of things - it reflects poorly upon the civil service system in the Town - its likely the money is there - you just can't add the columns to make it balance. Hire some professionals and not relatives!
By North of Highway (280), Westhampton Beach on Feb 4, 09 7:49 PM
What are the Qualifications of Mr. Blowes for his position?
By SHNative (554), Southampton on Feb 4, 09 10:46 PM
There is an old Thomas Nast cartoon showing members of the Tweed Ring standing in a circle. Each person is pointing to the person on their right and blaming them for lost public funds. Why does that sound familiar??
By CommonSense (71), Southampton on Feb 5, 09 2:08 PM
Intheknow911...how am I trying to put down Mr. Blowes by asking about his qualifications and background?
By SHNative (554), Southampton on Feb 5, 09 8:40 PM
This comment has been removed because it is a duplicate, off-topic or contains inappropriate content.
By pmofo (37), East Quogue on Feb 8, 09 1:45 AM
Yea...that is what I thought. You probably don't even want to go there. We will find out the financial bacgrounds of #1 (Kabot) and #2 (Blowes) sooner or later.
By SHNative (554), Southampton on Feb 10, 09 8:28 AM