Michael N. Hull and Ralph Sabatini
Earlier this week County Executive Ed Day confronted reality and bit the metaphorical budget bullet by facing up to the fact that the County owed millions of dollars, was running a multi-million dollar deficit, had overtaxed homeowners, and had police services that the County could not afford and did not need. He has proposed a budget that would eliminate numerous jobs including that of 37 members of the Sheriff’s patrol, cut funding for services that were not contracted, and keep the property tax increase to 2%.
Contrast that action with the leadership shown by Clarkstown Supervisor Gromack who put out for “immediate release” on September 30, 2014 an announcement that he had a preliminary budget with only a 1.1% property tax increase while touting that “the Town’s fiscal management had again earned a ‘AAA’ bond rating from Standard and Poors” and that CNN/Money Magazine said Clarkstown was ranked #7 in Best Places to live and was one of the Top 10 safest places.
Beneath the polyanna pronouncements was the failure to state that the Town is in the Top 5 of highest property taxes in the entire United States, that it had been running deficit budgets for many years and that it has over $100 million dollars in bonded debt. These facts were glossed over with the statement that “the Town is facing a number of continuing increasing costs and decreasing revenues”.
The Supervisor claims that the Town reduced its full time workforce by 81 employees since he took office in 2005. The truth is that 72 open unfilled positions were cut nine years ago in 2005 and an additional 21 positions were cut through a State sponsored early retirement in 2010 that only required the positions be frozen for a year. Nine positions were reduced through consolidations in the Town Garages and the Receiver of Taxes Office. These figures do not include any positions that were added to the payroll in the same time period.
A consistent game that is played, not just in Clarkstown but in many local municipalites, is the retention of vacant positions on the books so that these can be utilized in the future. Real cuts and fiscal prudence would dictate that vacant positions be eliminated.
Earlier this month at the Bardonia Civic Association meeting Councilman Hoehmann indicated he would seek to eliminate vacant positions (as the County has done) thereby making it more difficult for games to be played in the future. We note that the infamous ‘Constituent Assistant’ position that was occupied by Frank Sparaco was actually a merger of two open and vacant positions within the Highway Department. Had these been eliminated when they became vacant it would have made the creation of this ludicrous political patronage job so onerous that perhaps the entire Sparaco debacle could have been avoided.
Moreover, simple math and a reasonable memory will tell one that few if any jobs have been cut through layoffs or elimination to save money for the Town or the taxpayers during Mr. Gromacks’ tenure with the exception of Lorretta Raimone and her staff that were eliminated through the merger of the Clerk and Receivers of Taxes office. This consolidation was originally proposed by Councilmen Borelli and Hoehmann to the consternation of Gromack, Lasker and Hausner upon the election of David Carlucci to the NY State Senate.
The record is clear that the only reduction in positions was done not through the efforts of Gromack or Lasker but through those of Republicans Hoehmann, Borelli and lately with Democrat Hausner when she voted for the elimination of the infamous patronage job provided to Legislator Sparaco.
One has to wonder exactly when the Town Board will understand that layoffs of people occupying ‘make-no-work’ and ‘no-show’ jobs and political patronage positions, as we shall mention below, may be needed to restore fiscal sanity and save the taxpayers further financial pain? As has been noted already County Legislator Sparaco’s part-time position was eliminated by three members of the Town Board but he was immediately rehired by Ballard with a nearly $30,000 increase in compensation.
There are two types of property taxes in Rockland County – one on homeowners (the homestead property tax) and the other on businesses (the non-homestead tax). Homestead is a dwelling of a one, two or three family house. Non–homestead is over three families or commercial. On November 08, 2013 in New City Patch an article titled ‘2014 Clarkstown Budget Increases Taxes 3.5 Percent’ explained the 2014 property tax increases and the Town Board’s unanimous decision to over-ride the tax cap. However, the article headlined only the homestead tax increase of 3.5% when the principal tax increase was the crippling 17-18% increase in the tax to be paid by Clarkstown’s business owners.
Steven Levine of Congers said the town’s budget increases were out of control. “We can’t keep going like this,” he warned. “We’re going to wind up a ghost town.” Council member George Hoehmann said the budget did not reflect real cuts. “I’m having real difficulty with passing the 3.5 percent increase along,” he said. Hoehmann said they must look creatively in the next budget cycle for ways to cut through consolidation, decreasing expenditures or fixed costs. The councilman said residents told him throughout his last election campaign that the ever-increasing cycle of spending must stop. “I will not vote to override the tax cap next year,” he promised. “We need to get our budget in line. We’re not doing enough.” Hoehmann said higher taxes will force more people to leave Clarkstown because they cannot afford it. “Not only are our seniors not going to be able to stay here, I’m not going to be able to stay here,” he said.
The time has now come for action as both the Town of Clarkstown and the County of Rockland are about to enter their 2015 budget planning season. We have just found out what County Executive Ed Day is proposing to do to return the County to fiscal sanity. On Tuesday, October 21st, 2014 at 7:30 p.m. when the Town holds its public budget workshop meeting we are about to find out what Supervisor Gromack and the Town Board are proposing to do about their deficit spending, their bonded debt, and property taxes in 2015.
How bad are things with the Town of Clarkstown’s deficit spending?
Let’s start with the Palisades mall which when it was being built the taxpayers of Clarkstown were promised that ‘manna from heaven’ would forever fall from the Palisades skies into the coffers of the Town and the Clarkstown Central School District. But what happened? After spending over $1 million dollars in legal fees and having the now-convicted former tax cert attorney for the Town of Clarkstown, Bronx GOP Chairman Jay Savino, “sit in on the proceedings”, the Town lost the case and $20 million dollars of property taxes had to be returned to the owners of the Mall.
Of that $20 million only $5 million came from the Town of Clarkstown’s budget; the remaining $15 million came from the Clarkstown Central School District’s budget. That payment of $15 million put the Clarkstown School Board into dire financial straits by the disastrous depletion of its reserve fund. Meanwhile Supervisor Gromack could not come up with the Town of Clarkstown’s $5 million share from its depleted Reserve Fund and the Town was forced to borrow that amount in the form of a long term bond.
The Town of Clarkstown’s deficit spending problem can not be blamed on the Palisades Mall. Clarkstown has been deficit spending for many years and depleting its reserve fund to make up the difference. A 3.5% tax increase for 2014 was as much as the members of the Town Board figured the homestead owners would accept without gagging. They placed the rest of the tax burden on the local small businesses by raising their non-homestead taxes by 17-18%.
At a Clarkstown Town Board Workshop on June 24, 2014 Edward Duer, Comptroller and Mary Maloney, Deputy Comptroller, presented the Town of Clarkstown’s multi-year financial plan that is new this year having been proposed by Coumcilman Hoehmann. The plan essentially extends the budget process making sure that the Comptroller presents a multi-year outline of the budget so that better long range planning can occur.
Duer’s review was brutally honest and revealed:
1) Because of past deficit spending Clarkstown’s Reserve Fund is continuing to decline and has now been depleted to the extent that the Town will lose its fabled Triple A Bond rating. Projections for the end-of-year 2014 show that the reserve fund will be approximately $13 million having declined from just under $25 million in 2009. Supervisor Gromack, Deputy Supervisor Lasker, and Coucilwoman Hausner had hoped to sell the profitable Town asset – the Middlewood Senior Housing Complex – this year for about $10 million to get the reserve fund up to the minimum needed to keep the AAA rating. This proposal was halted on the objections of Councilmen Hoehmann and Borelli and by the outrage of taxpayers over selling an asset that is expected to provide a future excellent income stream to the Town.
Duer declared “the fund balance won’t last forever!” He then warned the Town Board about its deficit ….
2) If the Town stays with a 2% tax cap limit for the next four years and does NOT cut its spending, it is projected that the budget will be in deficit by over $6 million each year for the next four years.
Despite the grimness of this financial outlook the Town Board is struggling to come up with ideas as to how it is either going to cut capital expenditures or cut operating expenses to bring the budget into balance. If one assumes that approximately each $1 Million of deficit translates to a 1% rise in property taxes, the town is looking at an additional 6% tax increase over and above the 2% tax cap (for a total of about 8%) for the next four years to bring its budget into balance in the absence of any cut in capital spending or any cut in operating expenses.
One suggestion made to the Town Board was to place an immediate hiring and wage freeze on all positions that were not bound by contractual obligations. There were some indications that the Town Board would take this issue up at its July 2014 Board meeting but it did not. Clearly there seems to be some lack of understanding among several of the Board members notably Gromack and Lasker as to just how critical the future financial outlook of the Town has become.
The Town has carried a structural deficit for years spending more than it receives by selling assets and depleting the Town’s Reserve Fund.
Continuing with a structural deficit, as Mr. Gromack is proposing to do, means that taxes will have to go up markedly in the coming years when the income-producing assets have been sold, the reserve fund has been depleted, and the Town must pay for its $100 million+ debt.
Supervisor Gromack has acknowledged that there is a problem but unlike County Executive Day he appears unwilling to take any leadership role in solving this potential crisis. Instead he keeps asking the other Board members what they would cut and who is going to “tell the citizens that their capital projects are not going to happen”.
Councilpersons Hoehmann, Borelli and Hausner appear to recognize that some action has to be taken urgently and collectively the three have pushed to curb the growth in future capital spending dropping over $6 million from the capital plan over the next four years during the July 2014 workshop. It appears that a least two (Hoehmann and Borelli) and sometimes a third Town Board member (Hausner) understand that the taxpayers have been milked enough to the extent that all of them will be out of office when they come up for re-election if capital and operating expenses are not cut in the coming years to pay for the Town’s debit and its continuing structural deficit.
That there is an ominous cloud on the horizon was presaged by Supervisor Gromack’s own presentation to Standard & Poor’s earlier this year during which he stated that the town’s financial plan included the sale of Middlewood so that the reserve fund could be tapped to cover spending and that taxes would be raised in 2015 by 5.7%. Now that the sale of Middlewood appears to be off the table at least for this year it appears that the supervisor has uncovered another income producing asset that he could sell, namely the cell-phone tower at Germonds.
To sell an income producing asset not to build a Reserve Fund but to cover operating expenses related to deficit spending is more fiscal insanity.
Meanwhile the Town continues to provide salaries to police officers of over $200,000 per year and to provide patronage jobs to the likes of the now-convicted ‘tax attorney’ ex-Bronx Chairman, Jay Savino, and the now departing $103,600 ‘confidential secretary’ County Legislator, Frank Sparaco.
A month ago several concerned taxpayers led by Ralph Sabatini looked at the proposed 2015 Clarkstown Budget and dissatisfied with what they saw worked to develop a “reasonable” set of possible savings/cuts that might be made. Having waded department by department through 150 plus pages of the Town of Clarkstown’s financial statements, they developed a spreadsheet to serve as a guideline for saving $2.8 million without cutting personnel and with only a minimal impact on services.
The savings that the group recommends begin with a cut in the rampant overtime charges associated with the operation of the Police Department. The Police Department is the largest cost center by far and it is recommended that the Town Board include a reduction in police overtime of $1.7 million . This represents a 50% reduction in total overtime cost. Currently police overtime, which is not a union contract item, runs about $3.5 million per year.
Let’s put this another way. Police overtime costs in the Town of Clarkstown amount to an incredible $10,000 a day. Furthermore, that overtime is contributing to future unimaginable pension liabilities. The majority of the overtime work is traffic related.
Let’s put this in plain English. Police costs constitute over 30% of Clarkstown’s operating budget and overtime must be cut. To date instead of cutting, the Town of Clarkstown is increasing the base salary of its police force by 13% over the five year life of their present contract.
How many ways do we have to say that Clarkstown police services cost too much?
Consider this – the second-highest, and Rockland County’s new top pension of $161,412, belongs to retired Clarkstown police Sgt. Harry Baumann. He now has the fourth-highest pension in New York State among retired cops. When asked for a comment by the press he “hung up”. A recalculation of ex-Clarkstown Police Chief Peter Noonan’s $193,000 pension, based on income that had not been counted, raised it to $202,926. The jump made Noonan the highest police pensioner in the state and one of only nine state retirees receiving more than $200,000.
An investigative report by the Journal News found that over the past 15 years police and firefighters in the Lower Hudson Valley retired on disability at a rate 24 percent higher than the state average of 15 percent. More than 40 percent of Clarkstown police retirees since 1998 have disability pensions. Two of the four town police officers who retired last year did so on disability.
The Journal News of October 17, 2012 reported that Clarkstown had the highest average salary of any local agency in NY State. Its police employees had an average pay of $179,689, and seven of its workers were among the top 20 highest-paid workers in local government in New York. If one adds on for pension and health care costs the usual number of 40%, then the average police officer employed by Clarkstown costs $251,565.
In that article there were four police officers alone taking home in combined salary (before benefits) of over $1 million. Their salaries were:
$270,824 – Anthony Ovchinnikoff, Clarkstown Police Captain No. 2 in the state,
$265,113 -Daniel Weisberg, Clarkstown Police Lieutenant No. 5 in the state,
$264,513 – Robert Mahon, Clarkstown Police Captain No. 6 in the state,
$254,208 – Michael Sullivan, Clarkstown Police Chief No. 12 in the state.
The salary totals included overtime and pay for unused sick and vacation time from April 1, 2011, through March 31, 2012 but did not include pension contributions, health insurance and other fringe benefits.
To suggest that police overtime can not be cut is an affront to Clarkstown taxpayers. That reduction in overtime alone would eliminate the need for dipping further into the rapidly depleting Town’s Reserve Fund which has already fallen below the required limit to maintain the Town’s vaunted AAA bond rating.
While it is true that the Town Board needs to deal with “mandated” costs, many were caused by Town giveaways in the past, including pension and healthcare funding; all can not be laid at the feet of the State. That aside, discretionary (controllable) costs still include an additional $1.5 million in overtime in other departments, and keep in mind that these costs count toward pensions and will then be labeled ‘mandated’ — an interesting, vicious cycle.
Patronage is an institution in Clarkstown.
The Town’s Clerk of the Works, Ed Lettre, the leader of the Rockland Conservative party, is being paid a salary in excess of $175,000 per year. Mary Loeffler, chair of the Rockland Conservative Party, retired as Clarkstown’s personnel director, earning $134,200. She worked part time for the town, for $50 an hour, for about six months after her retirement. Then there’s former deputy town attorney Marsha Coopersmith, who earned $126,590, plus benefits. She controlled the Independence Party until 2010 when a Sparaco-led effort wrested control of the local party from her and into his hands. Sparaco presently holds a $103,600 job as ‘confidential secretary’ to Highways Superintendent Wayne Ballard.
The authors recommend that the Town Board immediately eliminate the Clerk of the Works position.
The ‘Clerk of Works’ is really the equivalent of a senior project manager in any company and would be paid less than $100,000/yr in the Environmental Control Department, aka the Engineering Department. Lettre’s competence was a topic of derision following his failure to provide a rational cost analysis for the repair of the Senior Citizen Centers at a Planning Board meeting last year. Yet when he snapped his fingers and called a meeting to keep himself in charge of the Conservative party, the Town Board jumped to comply.
Although we understand that this position is civil service protected and that Mr. Lettre could bump someone else to retain his job, the Town can ill afford overpaying a projects works manager just because he is a long-term friend of the Supervisor and is Head of the Conservative Party. Should Mr. Lettre decide to ‘bump’ someone else out of their job we will leave it to the Court of Public Opinion to judge the morality of that action.
In an article on May 13, 2013 in New City Patch written by one of the present authors, it was pointed out that the Town has about 30 employees with 24/7 vehicles. We suggested then that The Town should reduce the number of 24/7 town cars, tighten up the mileage monitoring policy and require that the Clarkstown Seal be affixed to both side doors of the Town cars to ensure that employees are not using Town cars for personal use. No action was taken by the Town Board at that time. There are at least 10 employees that have no real reason for having a 24/7 Town car other than having a car as a true employment perk and most of them are part of the Special Bargaining Unit that resulted from the Great Clarkstown Giveaway. The net result illustrates the Town Board’s lack of resolve to address the excessive cost of the generous taxpayer funded fringe benefits granted by Clarkstown to those who are politically connected.
Turning now to the Town Attorney’s office, a look at the website shows a the list of its activities that are very light when put against the list of personnel – the work is listed as ‘advising’, ‘reviewing’, ‘preparing’ etc. Further, there is another patronage hire here in the person of Keith Cornell. Cornell is the son of County Legislator Harriet Cornell and is also a Town attorney (albeit part time) in South Nyack and has his own practice.
One significant item listed in the duties of the list of 8 attorneys is “defending the Town against lawsuits“. However, when the citizens authoring this article filed a simple ‘Notice of Claim’ to force an audit of the Town Attorney’s office over the hiring of the disgraced and now ex-Bronx GOP chairman, Jay Savino, the Town rushed to Westchester to find someone who would “take the gloves off“ against “those taxpayers“.
Further, given that there is no one in the Town Attorney’s office capable of taking the gloves off against taxpayers, it should not be surprising that there was no one capable of taking the gloves off against the Palisades Mall management either. In the tax cert case filed by the mall against the Town, it did not use the $87,000 patronage appointee Jay Savino, who was later arrested by the FBI, but outsourced the work to the New York City Law firm of Kaye Scholer L.L.P that ran up a bill of over $1 million dollars to lose $20 million to the mall for which the taxpayers must eventually bleed.
Taxpayers may be grateful, however, that before Savino was arrested for stuffing his pockets full of other people’s cash, he “sat in on the Palisades Mall case but did not charge anything extra” according to Supervisor Gromack. Presumably he was sitting on his hands in the court room apparently incapable of taking his gloves off either?
In addition there are dozens of questionable, but smaller cost cutting opportunities such as $40 thousand being spent to provide employees with cell phones and $40 thousand for “Food” which does not refer to meals outside of the office — that is a separate category.
Town Supervisor, Alex Gromack, has presented a preliminary 2015 Budget with a 1.1% increase in taxes and while this is under the State mandated cap of 1.56%, it requires an infusion of $0.5 million from the Reserve Fund to get there. Mr. Gromack still cites the “jewel” in the crown of his fiscal management as the AAA Bond rating given to the Town, but it is highly likely that the further depletion of the reserve will cause this to be dropped as soon as the end of this year.
Without real and significant cost reductions and the ultimate replenishment of our Town reserve, the Town will find itself in dire fiscal straits within the next two years, likely requiring double digit (10% or more) tax increases going forward. Coincidently, the best guess as to when Mr. Gromack will retire and leave office is also two years, leaving this financial disaster to his successor to solve.
Supervisor Gromack’s proposed 2015 budget is the best and most alarming example we’ve seen of “kicking the can down the road” ignoring the fact that he and the Town Board are, at the same time, kicking Clarkstown taxpayers to the side of the same road. In order to fix this budget we need to reduce spending by a minimum of $1.5 million and stop the sale of assets until the proceeds offer a real benefit to the town and its residents. In our opinion meeting one-time budget needs by selling assets does not meet that criteria. Further, wage freezes and reductions in staff, particularly those that are politically related, are added steps that need to be taken now.
Taxpayers must make their voices heard at the at the Town Workshop meeting on Tuesday, October 21, 2014 at 7:30 p.m. and demand that the 2015 budget be balanced without further depleting the reserve fund, selling Town assets, or raising the “sky-high” property taxes even further.
To tout as an accomplishment that property taxes will only go up less than 2% when everyone knows the deficit and debt bills will have to be paid eventually with taxes that are destined to balloon after Supervisor Gromack retires is both shameful, disgraceful, and is morally bankrupt leadership.
The continuance of ‘kicking the metaphorical can down the road’ will lead to a further flight of taxpayers from Rockland to other less taxing locales if Supervisor Gromack, Deputy Supervisor Lasker and the other three Board members do not take immediate steps to change the downward spiral in the fiscal health of the Town.
Metaphorically speaking, the Town of Clarkstown is robbing Peter today hoping that Paul can pay tomorrow.
[This article was authored by Michael Hull and Ralph Sabatini. Mr. Sabatini has more than 40 years’ experience as a business and financial professional, serving as Chief Financial Officer for three different companies. He is a Certified Public Accountant and has consulted on financial matters with small, medium and large companies, both public and private. Mr. Sabatini has lived in New City for more than 35 years and ran for Clarkstown Supervisor in 2011. He currently serves on the board of Rivertown Films, a community oriented ‘not for profit’ association and also serves as President of the Board of New City Library.]
[Picture Credit: CartoonMovement.com]