Town of Fishkill looks to borrow $6.5M to cover revenue losses.
Southern Dutchess News June 23, 2010 by Kristine Coulter
Fishkill- The Fishkill town board voted unanimously to seek home rule from the NYS Senate and Assembly for a $6.5 million financing package. The vote took place during a special meeting on the afternoon of Tuesday, June 15.
" As you are already aware the town has experienced a shortfall in anticipated revenue. This shortfall began in late 2005, far too late for a change in the 2006 budget", read Fishkill Supervisor Joan Pagones from a Home Rule Message to NYS Senate/Assembly. "While those issues were a concern and being addressed, nothing could have prepared the town for the national "tsunami" collapse of the housing market".
Pagones remarked the town has seen reductions in revenue from all aspects of the housing downturn, from the mortgage taxes on new construction and financing to building and alteration permits.
"To a smaller extent we have seen reductions in sales tax revenues", said the supervisor.
In 2008 the town took in $1.2 million in mortgage tax revenue, said Fishkill Comptroller Robert Wheeling. In 2009, the town took in approximately $537,000 in mortgage tax revenue, he said.
The financial package would authorize the borrowing of up to $6.5 million to cover 2005 to date, said officials. The option would allow, according to Pagones, the restructuring of town finaces without a tax increase. That would offset under-performing revenues 2005 to date, according to officials.
The supervisor went on to tell those in attendance, of what she called the additional steps taken in the current budget, such as an overall 15 percent reduction in the budget, the institution of lag pay, no cost of living increases for employees (frozen salaries for the second year for officials), employees pay 15% toward their health insurance and no longevity increases for employees.
The town's deficit is approximately $1.3 million as of December 30, 2009, said Wheeling recently.
There are four general funds. The A (General Fund town wide), B (General Fund Town outside village), DA (Highway, town wide) and DB (Highway, town outside village). There are also six ambulance districts, seven lighting districts, eleven sewer districts, and seven water districts, said Wheeling.
"The problem really is the B fund", said the comptroller. He later added, "You're allowed to loan money from one district to another". The B fund, said Wheeling, They owe everybody and that's the problem".
The B fund has a deficit of approximately $2.7 million, said Wheeling. The B and DB funds, which have the same tax base, have a combined $3.2 million deficit. Add to that another $1.8 million in debt that is coming due next year, said Wheeling. That would be a total of $5 million, "I'm talking worst case scenario," said Wheeling.
The board can borrow up to (the words "up to" were stressed by Wheeling) $6.5 million for debt services, if approved by the state Legislature. NYS Senator Saland and Assemblyman Miller support the financial plan as do the town's financial planners, said Pagones.
Thomas Myers from Orrick, Herrington, Sutcliffe, who wrote a book about bond basics for towns, villages and cities in NYS, was one financial planner who worked with the town on it's strategy to get rid of it's deficit.
"Over the next seven years the town reduces it's debt payment by $6.5 million, over the next 10 years that number grow's to $9.9 million. This offsetting debt reduction will fund the new borrowing," said Pagones.
Wheeling remarked as far as the deficit, town officials think they can solve the deficit without raising taxes.
"This is only one step. They're going to have to mind the store," said Wheeling. "They know they've got a problem. They've taken steps to fix the problem...,"said Wheeling.
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