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Nov 7, 2008 12:08 PMPublication: The East Hampton Press

State: East Hampton lowballed costs, overstated revenues in 2009 budget proposal

Nov 7, 2008 12:08 PM

East Hampton Town’s preliminary budget for 2009 may have been low-balled by more than millions dollars because of overstated revenues and understated costs, according to an audit released on Thursday, November 6 by the New York State Comptroller’s office. The audit was required as a condition when the town was granted permission by the State Legislature to float up to $15 million in bonds to close a budget deficit that has been growing since 2006.

In response, some Town Board members said that the report was based in misinformation or misunderstandings and that some of the issues it raised have been addressed by the board. (See separate story on the budget, page one.)

The current budget proposal totals about $68.7 million but that number is in flux as the Town Board debates changes. A final budget is due November 20.

The current year’s budget totaled nearly $75 million. Much of the reduction in spending compared to 2008 is the result of an accounting change: the removal of the Community Preservation Fund’s revenues and expenditures from the spending plan, as required by new CPF guidelines. It is expected the town overspent the current budget by perhaps $10 million as a result of its continuing deficit.

In its audit, the state comptroller’s office found that the town, in preparing the budget for 2009, had overstated revenues for mortgage tax receipts; payments to the town for services from the Community Preservation Fund; revenues for a new $25 beach parking sticker for residents, who have always obtained them for free; and a federal grant for work on a bike path.

It found the budget understated likely costs for employee health coverage; pay raises for the police department; independent auditing services; the town’s contractual obligation to pay $710,000 to YMCA for the RECenter; and a required contingency fund.

The exact value of the auditor’s recommended budget changes to resolve the town’s questionable predictions is subject to some interpretation. It appears the overstated revenues could total about $950,000 and the understated costs could be in the millions, mostly for employee health coverage and the need for an adequate contingency fund to avoid a deficit in 2009.


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Has anyone investigated yet what it would take to impeach the current supervisor?
By Mr Suffolk (113), Twin Forks on Nov 7, 08 2:17 PM