WATCH: City Council Candidate Questions Mayor Issuing Debt to Cover Expenses

In the video, City Council candidate Philip Pidot questions Mayor Reggie Spinello about issuing new debt to cover known, but unbudgeted expenses.

The following was submitted by Pidot:

At last night’s City Council meeting, I questioned the mayor about issuing new debt to cover the known (but unbudgeted) expense of tax refunds. He doesn’t dispute that we all knew this would cost about 8x what was appropriated. The plan was always to paper over it with new debt.

Here’s how NYS Comptroller Thomas DiNapolo characterized this practice in his review of the 2015 budget:

“The 2015 proposed budget contains an insufficient appropriation of $100,000 for the payment of tax certiorari refunds which have averaged $814,000 over the last three years. City officials have indicated their intention to use debt to finance the balance of 2015 tax certiorari settlements above the existing appropriation. The continued practice of using debt to pay for these operating costs is imprudent. ... City officials should treat tax certiorari costs as routine expenditures and pay them from annual appropriations.”

I suggested two things:

• Fund this shortfall with money already in the budget, from line items on track to come in under budget.
• Stop this fiscal malpractice going forward and adopt appropriate forecasting/budgeting protocols for 2016.

The mayor said he would be happy to hear any suggestions about where to find that money, so I offered a few:

1. The savings from a lower-than-expected bid to remove an underground fuel tank (savings that were boasted about earlier in the meeting, but when I tried to pin down those alleged savings for reallocation to debt relief, they seemed to vanish). Best guess: $100,000 (but perhaps as low as $0 if those savings were just happy talk).
2. The mayor’s office itself. It’s on track to spend $80,000 less than the (increased) 2015 allocation.
3. Contingency fund. This unspecified reserve, for which the mayor identified no known uses, was allocated $275,000 for the year and has yet to be drawn down. Seems to me that avoidance of unnecessary new debt is a perfect contingency in this case.

Councilman Gallo identified another unspecified grab bag known as “Miscellaneous budget items” (something for which neither he nor the mayor knew the purpose). This is apparently on course to come in $100,000 under budget.

The above items total $550,000, which would’ve wiped out nearly all of the $610,000 in new debt.

But having just asked to hear specific areas where we could find money to reallocate, the mayor dismissed these ideas as “cherry picking.”

On the contrary, this is the lowest of the low-hanging fruit. This is money for which the assembled council and mayor can’t identify a purpose, money that’s already appropriated (just as DiNapoli advises), money that doesn’t require layoffs or service cuts or the other spooky outcomes the mayor outlined in his dismissal. And of course, this is money that wouldn’t have required taxpayers to go ever deeper into debt.

I was encouraged that a vote was then taken to table the matter until the council could identify offsetting funds, but it was defeated 5-2 (with Councilmen Gallo and Spagnoletti in the minority) and Glen Cove taxpayers got slapped with more unnecessary debt.

If we don’t put a stop to this habit of fictional forecasting and debt addiction, we may soon look back on the days when our credit rating was only “near-junk” with envy.

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