Looking Through My Bills

"Some debts are fun when you are acquiring them, but none are fun when you set about retiring them" - Ogden Nash

 At the end of each month, like most other people I guess, I sit down for an hour with my checkbook, pay my bills, and take a quick look at my overall financial health.  Happily I can report that my income has covered this month's needs, I have a little left over for golf and movies this month and by the Spring I will have enough put away for a vacation which I have not taken in nearly two years.  I have a small 'rainy day' fund for any unforeseen emergencies and though the interest rate it earns is poor, it remains intact. 

Glancing at my property taxes on my home for the last 10 years I see that they have risen by a total of 64% partly because I no longer qualify for the enhanced STAR program and the new  has added a $10 increase on my monthly utility bill which will continue for the next twenty (20) years.

Having nothing better to do for the rest of the day I skimmed through the Wall Street Journal and wondered what will happen shortly after the November election to tackle the coming crisis that the United States faces which is referred to as the 'fiscal cliff’. Simply stated the United States has had its Triple A bond rating lowered because of fears that continued deficit spending combined with the already massive public debt is shortly about to disrupt every one of our lives.   

Since there is not much I can do at the National level about the Federal government rolling towards a fiscal cliff, I thought it would be interesting to take a look at the County's, and the Town of Clarkstown's, financial health. I recalled that at the April 17, 2012 Town Board meeting, Councilman Borelli noted that Clarkstown currently has $95 million worth of debt and said: “We have to be very careful where were going with our debt. We’ve got to watch everything.” Borelli has an instinct to ferret out  and so I asked a friend to look at the County and the Town's financial statements and see if the councilman is indeed correct.

Here is what he found which may explain why my property taxes keep going up. 

a)  Rockland County is nearly bankrupt. Its bond rating is one notch above junk.   As a taxpayer I have a share in an approximately . To pay for this debt County Executive Vanderhoef has a proposed agreement with the CSEA which is the county’s largest labor union with close to 2,200 employees.  : “For many months we have been negotiating with the CSEA,” said Vanderhoef. “I am pleased that we were finally able to reach an agreement that I believe benefits the County, the employees and the taxpayers of Rockland County."

 Here are the details of the latest “needed and meaningful savings” to rescue Rockland County from its .

• A 15% health insurance contribution rate for new employees (but we aren't hiring any).
• A salary and wage freeze through the life of the contract, with the exception of five year longevity increases or salary increases tied to job promotions. (I love 'exceptions', don’t you?)
• Deferred payment for a total of 10 days work during certain periods in 2012 and 2013, with compensation for those days taking place on December 1, 2014 (A brilliant strategy - just move everything out to 2014).
• Language preventing layoffs for budgetary reasons through the life of the contract (That's right, the County can't pay them so they will not lay them off).

The latest County gimmick is to charge back every expense the County can find to the Towns in what appears to be an attempt to have the Towns raise the taxes needed to pay for the County's profligacy. It seems to me that I'm one of the taxpayers on the hook whatever way this County gimmick goes. One stunt is to "return" County roads to the Towns and have them pay for the cost of maintenance and operation of streetlights, traffic signals, etc.

How is this as an example of one County Legislator's financial acumen?  Legislator Schoenberger requested an analysis of how much County roads "cost” taxpayers and how much would be "saved" if the roads were no longer County roads. 'Cost', if you haven't already figured this out, refers to what taxpayers pay - 'saved' refers to what Schoenberger avoids when someone else sends you, the taxpayer, a bill on the County's behalf. 

You would think this shouldn't be such a big deal.  After all even though the County's bond status is near junk level and the County has rolled off its fiscal cliff, Clarkstown's rating is still a ‘top-of-the-notch’ Triple A. 

What's the problem?  Well …..  

 b)  Clarkstown has been running at a loss since 2008 (the first date audited financial statements are available).  I have uploaded the 2008 – 2011 statements and a file (DeficitSpending.pdf) that consists of some marked-up pages taken from these Audited Financial Statements to help you in following what is there for everyone to see. 

What is troubling is that Clarkstown is adopting deficit budgets every year. Clarkstown's budget is not in balance! It is using a reserve fund to meet expenses.  In 2009, Clarkstown negotiated the sale of its Solid Waste Transfer Station and established a ‘Tax Stabilization Fund’ with the proceeds which it added to its existing reserve fund of $7 Million. 

That fund of $22 Million is being depleted at an alarming rate - $4.4 Million were removed from it last year (see page 22 of the 2011 statement where the $4.4 million fund reduction is marked).  The fund balance at the end of 2011 was $20,819,549.   If one calculates in the increased salaries and borrowing costs in the future then without a marked increase in revenue - the only way to increase revenue is to increase our taxes - the fund will be depleted by 2017.  Moreover, if the Town takes a hit in the Palisades Mall tax cert trial the fund will be gone in approximately 2 years. 

Want to bet that the current Board will say: "It wasn’t our fault, the County is to blame and the Palisades Mall wouldn't pay its taxes? 

Well then, one might say, why doesn't the Town eliminate some of it most expensive budget items so that it can maintain its 'rainy day' fund intact and stop deficit spending? 

That’s not a viable remedy because I see that .........

c) Over 30% of Clarkstown's budget goes to pay for just one item - one of  police forces in the United States. The Chief of Police makes more heading a 160 person department than the Police Commissioner of New York City makes overseeing a 40,000 person department. 

The Police Benevolent Association negotiated two contracts recently with the Town on the basis that the Town can afford high salaries because:

• Clarkstown has a triple A bond rating (AAA which means that the Town can easily borrow money and go into debt), and
• Clarkstown has the 'wherewithal' to pay for the increases from the Town's Reserve Fund.

It seems that the PBA and the County must have the same financial advisor.  I wish I knew who it was so he could give me some advice as to how to escape from this lunacy.  Supervisor Gromack says we have great 'savings' with respect to police 'costs' when compared with Ramapo but when I look South to New York City the Supervisor’s phantom ‘savings’ quickly evaporate.  

The latest gimmick by the Town is to put a one percent surcharge on  as a fee to collect the school taxes. This appears to me to be an attempt to have part of the Town's profligacy paid for with this fee. Supervisor Gromack may claim in next year's election that he didn't raise your Town taxes but it seems to me that I'm one of the taxpayers on the hook for this amount whatever way the Town packages it. 

The Town Board was prepared with a whimper to give the highest paid police force in the United States over the duration of its present contract and now it is prepared with a bang to place a 1% ($1.4 million from Clarkstown School District residents and business owners) surcharge on the educational system of Clarkstown's children.  “I just learned about it today,” said Clarkstown School Assistant Superintendent for Business, Facilities & Fiscal Management John LaNave.  East Ramapo Superintendent Joel Klein said “You would think they would notify people.”  Mr. Gromack was not available for comment. 

But to continue .......

d) The unfunded OPEB (Other than Pension post Employment Benefits) retirement and health insurance benefits of Clarkstown as of 2011 stand at $157 Million and are rising. That number was $133 Million in 2009 - up by $24 Million in three years. The unfunded vacation and sick time buyback is over $4 Million.  

If that hasn't got your attention then why don't we move on and look at the some other debts that the Town has .........

e) Clarkstown's bonded debt is $95 Million as Councilman Borelli pointed out and there was another $23 Million authorized but not sold through 12/31/11 (see the last page of the file 'DeficitSpending.pdf' where there is a list of projects awaiting addition to the Town's bonded debt).  Add these two figures together and one is looking at a figure of over $118 Million in bond debt. Clarkstown continues to tout its - its license to go into more debt. As a taxpayer I will be asked to pay a share of these bills. The County's credit card is maxed out and no more charges can be put on it - the Town's card is in the process of being maxed out. 

The good thing is that we have the Palisades Center Mall which was promised to provide unlimited 'manna from heaven' to Clarkstown's taxpayers.

But ... oh, dear ….. what’s this? ......

f) The Palisades Center filed a challenge to its Town of Clarkstown and Clarkstown School District property tax assessments for the years 2009, 2010 and 2011 in Rockland County Supreme Court.  in property taxes annually, of which $15,165,000 goes to Clarkstown schools, $1,332,500 to the county, $5,635,000 to the town and $1,345,000 for special fire, ambulance and sewer districts. As with all tax certioraris, if the property owner is successful, my taxes will go up. 

You probably have heard that there are two types of people in the world - the 'haves' and the 'have-nots'.  But did you know that in Clarkstown there is a third type - those who 'have' but should be 'not-haves'?  Why is it when I am just making ends meet ..........

g) Frank Sparaco, a County Legislator and leader of the minority Republican Party, whose went to prison for while Chair of the Independence party, is given a (25 hours per week) in the Clarkstown Highway Department supposedly to handle telephone calls in inclement weather but perhaps really to insure that the Superintendent of Highways, Wayne Ballard, gets the Independence Party line next year.

To give Councilman Borelli his due, his was the only voice who spoke against this scam while the rest of us, including me, followed ' who said that: “The public demands answers during emergencies,” adding that the employee would provide information by phone, text and email and "would attend various meetings". Mr. Gromack was not available for comment. 

and ….

h) The Head of the Bronx Republican Party, , is per year 'retainer' fee to handle the Town's tax certs even though the Town employs numerous Deputy Town Attorneys paid for with our taxes. Strangely, in the Palisades Mall case the Town hired another law firm to handle the litigation saying that "Mr. Savino just sat in on the proceedings but did not charge anything extra". That’s good!  We ‘saved’ something there except it 'cost' a pile when the Clarkstown Town Board two more tax cert settlements under Savino's watch in the amount of $19,800.

and ….. 

i) Clarkstown’s Town Board is paying $180,000 per year to the Head of the Conservative Party, Ed Lettre, while holding 'House of Horrors' meetings with him so he can remain the Conservative Party's leader. 

Lettre, whose title in his Town position is 'Clarkstown Public Works Administrator', can’t seem to provide project financials that are not in danger of ballooning by 50% once he is given taxpayers’ money.  For example, in a somewhat rambling and disjointed analysis  the Town Board with a list of needed improvements at the town’s three community centers costing $621,000 not including contingency and other fees to be added to the bonded debt (see the last page of the document 'DeficitSpending.pdf'). Smelling a rat hidden in the words ‘contingency’ and ‘other’, Councilman Hoehmann expressed concern about what would happen once the fees were in and said, ”This could be a $900,000 price tag for these community centers.  I think we need to look at an overall plan that makes sense.” Councilman Borelli also asked for a firm cost. “I’m asking for the bottom line cost, the inclusive cost for all these repairs,” he said.

I don’t know about you but ...

I say it is time to bring all of this to a STOP. I didn't vote to have the Town spend my tax dollars in this way. 

Yet on and on it goes; the latest additions to the taxpayers' burden was an added at the August Town Board meeting to the bonded debt.

The 'September Clarkstown Gimmick' to add a 1% collection fee for the Town to send you a bill for your school taxes reminds me of the architect in Gulliver's Travels who was designing a way to build houses from the roof down.  Things sometimes appear . As the Journal News points out the increase will show up as a 'cost' on the school bill but the money will be 'savings' for the Town that will allow the Town Board to lower the tax rate when it plans next year's budget this fall.

Supervisor Gromack's fiscal analysis in his own words goes something like this:

"The $1.5 million raised from the school tax fee would eventually not be a burden on taxpayers because the town would end up lowering town taxes for the coming year. In other words, while the school taxes would increase, homeowners’ share of town taxes would decrease. A $1.5 million increase in revenue would allow the town to lower its tax rate by 2 percent. This is money that is coming from town residents and going back to town residents in tax relief.” 

This is the way Supervisor Gromack keeps the Town's books; an increase in taxation is actually an increase in tax relief.

Since I intend to sell my home before the Town’s Reserve Fund is bled dry, the rest of you will have to pay for my share in all of this! I may be one of the 'haves' today but I do not intend to become one of the 'have-nots' tomorrow when those who should be 'not-haves' have multiple hands in my pockets playing shell games with my money. 

That is selfish of me you might say? Maybe so, but at least I will be leaving you with an understanding of the fundamental differences between deficit and debt, costs and savings. 

Rockland County has fallen off one fiscal cliff and the United States is rolling relentlessly towards another. In Clarkstown Councilman Borelli hints that our Town tax 'costs' will be going up yet the Town Board holds to the view that with its superior fiscal management skills, and with the help of a surcharge on your children's education, our tax 'savings' will be incredible.

Unhappily the Town of Clarkstown sees no fiscal cliff in sight!

Michael N. Hull is a member of the Clarkstown Taxpayers Group the goals of which are to reduce local taxes and local government expenses and make local government and local public officials more responsible and accountable to the citizenry. 

Picture courtesy of personal-finance.thefuntimesguide.com