Make no mistake, the Town of Ramapo is teetering on the edge of a fiscal cliff. In 2013, the New York Comptroller ranked all 932 New York towns for economic health. Ramapo ranked dead last, the absolute worst in the state.
And not by a small margin. The average fiscal stress level for New York towns is 10%. Ramapo's stress level is 70.8%, more than seven times the state average. The Town is awash in red ink, and the taxpayer is on the hook.
How did this happen?
Over the past decade, the town's incompetent leadership, for its own reasons, recklessly destroyed Ramapo's economic well-being.
What does it mean for the future?
At the very least, you can expect taxes to skyrocket. Steep tax increases have already been put in place. No doubt more are planned. And still it won't be enough.
Consider the Detroit bankruptcy. If corrective measures are not taken, Ramapo could face a similar tragedy.
As a bankruptcy lawyer, I have spent decades helping consumers and businesses extricate themselves from disastrous financial situations, some of which were caused by irresponsible and reckless choices.
But you don't need to be a lawyer to see Ramapo going down the fiscal tubes.
There are many reasons why Ramapo is in such bad shape. Let's consider one part of the puzzle, the $63 million stadium. The stadium debacle is just a detail in a much broader phony financing scheme that threatens to bankrupt the town.
After a referendum in which the voters decisively rejected taking on debt for a stadium which could not possibly be profitable, Mr. St. Lawrence went ahead anyway and spent $27 million taxpayer dollars to develop town-owned land. To side-step pesky laws that apply to Town projects, he then transferred the land, which was worth about $8.4 million, from the Town to the Ramapo Local Development Corp., a private corporation which he also controlled. Red flag, anyone?
The transfer of land from the Town to the RLDC was a type of insider dealing, an improper mingling of assets, a shell game and an obvious conflict of interest that does not pass the "smell test". In a bankruptcy, such a transfer would be considered fraudulent and would be set aside. By what legal authority did the Supervisor transfer a Town asset to a private corporation?
He then had the taxpayers guarantee $25 million in bonds on land now owned by the private corporation. At the same time, he had the RLDC pledge to reimburse the Town for debt payments, using phony assumptions based on non-existent profits from a Spring Valley housing project for which the RLDC owes $30 million in construction costs.
And while the town originally planned to spend less than $30 million on the stadium, the Comptroller’s Office audit estimated the price tag at more than twice that amount. So, the Ramapo taxpayers are now on the hook for $63 million that they voted against, and the money is not there to pay the bill.
Well, that's not exactly right. The money is there, right in your pocket. Please hand it over to Mr. St. Lawrence.
If all this circular phony financing and asset mingling makes you a little dizzy, you are not alone. The State Comptroller found that the Town Board itself, elected officials, failed to monitor the housing project or even inquire into costs associated with the stadium. You could not ask for more lazy, incompetent and useless town government.
This is not responsible leadership; it is an abuse of the public trust and your money.
There is no indication that Mr. St. Lawrence has any intention of changing the town's direction. On the radio the other day, he assured us that everything is hunky-dory. Ramapo is in great financial shape he tells us. The ballpark is making money. The bonds are being paid off. Oh, really? He has provided not a shred of evidence of any of this. I was surprised he did not also offer to sell us a slightly used bridge. Or at least float bonds to build a new one.
Stop and ask yourself who are the beneficiaries of all the taxpayer-funded largesse bestowed by the Supervisor. You may be footing the bill, but somebody is making a lot of money along the way to Ramapo's fiscal devastation.
What was Mr. St. Lawrence's motive for driving the town deeply into debt? Perhaps the FBI will provide some answers when it concludes its investigation. Meanwhile, there is an election in November.
On November 5, the voters will have another chance to replace the present Supervisor and his do-nothing board with competent experienced professionals who can start to repair the fiscal disaster caused by a decade of reckless sweetheart dealing at taxpayer expense.
The November 2013 election is the most important one in modern Ramapo history. No recent election has presented such clear issues and choices to the voters.