Riverhead Town came up more than $300,000 short in 2015, after revenue projections in its adopted budget missed the mark by nearly $1.9 million.
The town’s 2015 operating budget counted on significant revenue coming in from the anticipated rental of land at the Calverton Enterprise Park($750,000), a drinking water protection grant to reimburse the town for its landfill closing and capping costs ($613,000), and sale of the East Lawn building ($275,000). None of those projected revenues materialized last year. On top of that, the budget over-estimated building inspection fees by $258,000.
Revenue lines that performed better than projected and reductions in budgeted expenditures helped plug the year-end budget gap, but the town still booked an operating deficit of more than $300,000 for fiscal year 2015.
Supervisor Sean Walter said he was extremely happy the town was able to “whittle down” the difference to $300,000.
The town dipped into its general fund reserves to plug the gap, financial administrator William Rothaar said in an interview last week.
Walter last week released Riverhead’s 2015 annual financial report update document, which is required to be filed with the state comptroller by April 30 for the fiscal year just ended.
Revenues that exceeded budgeted projections last year included E911 aid, alarm fees, mortgage tax, planning board fees, Cablevision franchise fees and rental application, according to the document.
The town also spent less than budgeted on insurance claims ($600,000), police salaries ($282,000), gasoline ($100,000), landfill repairs and maintenance ($71,000), and electricity ($44,000). Some of those gains were offset by expenses that exceeded projections for police overtime ($150,000) and litigation ($248,000).
Rothaar said another $200,000 was made up by numerous smaller variances in revenues and expenditures.
The $1.9 million revenue shortfall for 2015 comes close to Rothaar’s original projected deficit for FY 2015. He said in September 2014 that the town would have a $2.2 million shortfall in 2015 unless the Town Board voted to pierce the 2-percent property tax levy cap or voted to implement budget cuts that Walter at the time called “draconian.”
Walter had asked the town board to approve short-term financing secured by the EPCAL property to help plug the budget gap. But after authorizing the loan application and hiring a law firm to pursue the financing, a majority of the board (council members Dunleavy, Wooten and Giglio) voted in September 2014 against taking the loan. The board also voted against piercing the tax cap for the following year.
“I will deliver to you on Sept. 30 a balanced budget,” Walter vowed, “and you are not going to like what it looks like.”
But Walter’s 2015 budget did not include the “draconian” cuts he warned against. Instead it included anticipated revenues of $750,000 from leasing land at EPCAL to two energy companies — one for a solar energy facility that would bring in revenue of $500,000 and the other for propane storage that would bring in revenue of $250,000, the supervisor said in a September 2014 interview. The solar facility was dependent on the selection of the developer, Hecate Energy, by the L.I. Power Authority, which was uncertain at the time. Hecate was indeed chosen by LIPA in December 2014. Hecate is currently projecting commencement of operations for its “Riverhead Solar 1” facility in the fourth quarter of this year. Walter’s 2014 budget also projected revenues of $613,000 from a county trust fund established under a 1998 law to compensate towns for landfill capping and closing costs. His budget also drew on $700,000 in fees paid to store storm-damaged cars on the EPCAL runway following Super Storm Sandy.
The town board did not hold a single public budget discussion after the supervisor delivered his tentative 2015 budget on Sept. 30, 2014. Though three of the four council members criticized the supervisor’s budget as “phony,” “unrealistic” and “not in the best interests of the taxpayer,” the board made no changes to Walter’s budget proposal, which became the board’s preliminary budget by default, as per state law. The board then refused to vote on the budget — over the objection of Dunleavy, who wanted to bring Walter’s budget to a vote, “so I could vote no,” he said at the time. (The board in fact failed to adopt any budget for fiscal years — 2011, 2012, 2013 and 2015, allowing Walter’s tentative budget to become final by default.)
The town’s fiscal policies faced withering criticism from Walter’s opponents in the 2015 election campaign, in which Walter, denied the nomination by his own party, ran for re-election on the Conservative Party line.
Giglio, who wrested the Republican nomination from the supervisor in a tightly contested primary election, said last year Walter’s budgets ”have depleted reserves, anticipated revenues that never came in and continually underestimated expenses while pilfering money from the special districts.”
Last year’s Democratic candidate Anthony Coates said Walter’s budget was full of “pipe dreams.”
This week, Coates said he wasn’t surprised by the town’s update report. “Town Hall is really good at these dire, dire forecasts and then they come back and say it’s not as bad as it could have been,” he said. The revenue projections, like the initiatives outlined by Walter in his State of the Town speeches, were all “dead on arrival,” according to Coates.
“There’s no way this government can operate with current revenue generation. It’s not going to be solvent. We just keep kicking the can down the road,” Coates said.
Democratic council candidate Laura Jens-Smith, who regularly attends town board work sessions and regular meetings said, “Sean is one of the few people who would feel comfortable telling everyone we have a balanced budget and then, when you have a $300,000 shortfall, he calls it good news.”
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