Clarkstown Seniors Sacrificied!

“It stands to reason that where there's sacrifice, there's someone collecting the sacrificial offerings” - Ayn Rand

In a previous article S.O.S – Selling Out Seniors I stated that the Town Board of the Town of Clarkstown was being maneuvered by Supervisor Gromack towards a sale of the senior citizen housing complex known as 'Middlewood'.  I also described how Clarkstown has slipped into insolvency and the outlook for its cherished AAA bond rating had moved from 'stable' to 'negative'.

At the March Town Board meeting I directed some questions to Councilwoman Lasker in which I stated that the Town of Clarkstown has been running a structural deficit for a number of years and had been depleting its reserve fund to make up for that deficit. I stated that the town was in need of a multimillion dollar shot of cash or the ratings agencies would downgrade the Town's AAA bond rating and I asked Lasker if she felt obligated to sell the Middlewood complex given the residents there did not want to be sacrificied on the altar of the Town’s cherished AAA bond rating.

Councilwoman Lasker refused to respond directly to my question but the Town Attorney, Amy Mele, said she wanted “to make clear to everyone that the Town Board had not made any decision to sell Middlewood but had “simply hired a firm that has an expertise in these types of housing complexes to solicit some information and present the Town Board with some options.”

To this statement Councilwoman Lasker then offered: I would like to say to Mr. Hull that the Town is in great fiscal shape.  It has a Triple A bond rating and a lot of your questions have been answered over and over again.  You don't like the answers that you have been given and you keep asking the same questions.  I understand that!

The reason Supervisor Gromack, Councilwomen Lasker and Hausner wish to sell Middlewood is that the Town needs an urgent cash infusion into its reserve fund or it will lose its cherished AAA bond rating.  The reason numerous buyer are lining up to purchase Middlewood is that they can make a ton of money from the difference the renters are paying today and the going market rate for similar rentals in this area which difference the government would pay.

In my previous article I said Clarkstown is selling an asset and its future revenue stream in order to get itself out of its insolvency crisis.  Clarkstown is running a structural deficit and has been doing so for the past several years and it has been covering its excess spending by tapping into the Town's savings account which is now at a critically low level.

Supervisor Gromack’s response to these comments was swift and deceptive.  In an article appearing in the Rockland County Times  Gromack half admitted that he did wish to sell Middlewood but that Hull was "stirring the pot to get people upset. Everything he says is inaccurate. And I think it’s just a disturbance to try and spook people to think something nefarious is going to be done when in fact it is all very positive.”

Which bring us to the Clarkstown Town Board meeting of April 08, 2014 in which Supervisor Gromack, Town Attorney Mele, and Councilwoman Lasker were unable to spin the questions asked about Middlewood any further thus leaving Supervisor Gromack’s own ‘pot’ thoroughly ‘stirred’.

During the Board meeting and before the time came for the members of the Town Board to receive questions from the public, they noticed numerous senior residents of the Middlewood Complex sitting in the audience. Supervisor Gromack called a “five minute break” during which, according to those observing the incident, he, Town Attorney Mele, and Councilwoman Lasker headed into the audience to consult with the Middlewood attendees. The three attempted to assure them that nothing would come up about Middlewood and they could all go home to be briefed at a later time. Some seniors did leave but many remained to hear Bardonia resident, Pierce Redmond, the son of a Middlewood resident, address the Town Board as follows:

Redmond: My name is Pierce Redmond from Bardonia and for Ms. Lasker's benefit I am a 20 year resident and a 20 year property taxpayer of the Town of Clarkstown.  I am not "you people" as you referred to me earlier during the break.

Lasker:  I'm sorry I don't know what you are referring to.

Redmond:  OK.  Maybe you don't remember from a few minutes ago when you said "I am part of 'you people'" whatever that is? 

Anyway, I am here to speak about a topic that has come up recently regarding Middlewood. It was stated in the March meeting by Ms. Mele that the Town has not made any decision to sell Middlewood.  Less than 3 weeks later at the next Town Board workshop which was last week on April 1st, there was an agenda item that seemed to have been added late in the day was to "discuss contract negotiations for the potential sale of the Middlewood Senior complex”.  

That does not appear to be open government to me and many other people.  The senior housing topic comes up every year during election time and you are asked about it all of the time and you say there is not enough in the town and there isn't.   Some of this housing has allowed our seniors who have lived here for their whole lives to remain close to their children and grand-children.   The Town could do more to give the seniors more options.  The fact that you are at least considering selling the property does not make any sense.  If that property is maintained by the Town then at least those units will always be there for our seniors.   If it is sold anything can happen. 

The town brought up this issue.  Town board members went to the Middlewood Senior complex and spoke to them about it.  It has come up in the Town Board meeting and obviously it was a topic on the last workshop last week.  So you are the folks who brought it up.  So please don't accuse me of being wrong for wanting to comment on it publicly as you just did earlier.   I have two questions for the Town Board.   What is the current status of the potential sale of the property and if the property is sold how can the Town assure its residents that it would continue to operate in the same manner that it does today?

Subsequently, to my questions on the financial health of the Town Councilwoman Lasker, for the second month in a row, found herself completely unable to respond although Supervisor Gromack did a good job trying to spin a long and intricate yarn as to how all of the town’s need to run deficit budgets and deplete its reserve funds was the fault of the County government and not the fault of his own administration.

Eventually having run dry of explanations the Supervisor casually asked Town Comptroller, Duer, if he wished to say anything.  Duer followed the Supervisor’s lead and attempted to ‘dance the light fandango’ whereupon things went downhill fast when he was ‘pinned to the mat’ by Borelli and Hoehmann.  Here is the transcript of some of the key exchanges:

Hull:  Good Evening Members of the Town Board.  Councilwoman Lasker, on April 03 in the Rockland County Times Supervisor Gromack said: “I think some people like to stir the pot and get people upset, like Mr. Hull and his articles. Everything he says is inaccurate."  The Rockland County Times went on to say and I quote: "One high-ranking town official told the Rockland County Times anonymously that Hull’s outlook was “almost all true.”"  Last month when I suggested that you intend to vote for the sale of Middlewood because the town is running a budget with a deficit; the Town's reserve fund is critically low; and without a cash infusion the Town will lose its AAA rating, you replied and I quote: "I would like to say to Mr. Hull that the Town is in great fiscal shape.  It has a Triple A bond rating and a lot of your questions have been answered over and over again.  You don't like the answers that you have been given and you keep asking the same questions.  I understand that!"

Councilwoman Lasker given your stated understanding of the questions and the answers that have been given to me "over and over again" might I ask if you could help me to provide some accurate facts about the state of the Town's finances?

1) Is my statement "inaccurate" that the Town is running a deficit budget this year and that in its budget for this year it has planned to take $0.5 million out of the reserve fund in 2014?

2) What is the level at which the Town is required to keep as a minimum in its reserve fund to maintain its AAA rating?

3) Is the Town's reserve fund presently below that minimum?

Suspecting, what proved to be indeed the case, that Deputy Supervisor Lasker’s comprehension of the state of the Town’s finances is so poor that she would not be able to make any response I directed some similar questions to the Town Comptroller saying:

Hull: Mr. Duer: as the Town Comptroller you are required to keep the members of the Town Board and the public aware of the financial health of the Town. 

1) Has the Town run a deficit budget for the past several years and has it taken funds out of its reserve fund every year for the past several years?  

2) Can the Town maintain its AAA bond rating if it does not place funds into the reserve fund this year? 

3) Does the Town need a cash infusion into the reserve fund this year to maintain its AAA bond rating?

4) Into which account would you place any funds from the sale of Middlewood?

Knowing of Mr. Duer’s propensity not to give any facts to the public unless demanded to do so by a member of the Town Board I backed up my questions to him by requiring assurances from Councilmen Borelli and Hoehmann to act on my behalf:

Hull: Mr. Borelli and Mr. Hoehmann:  The public in these town board meetings is not permitted to follow up when their questions are deliberately ignored which has been a repeated practice of this Town Board. Therefore I would ask that you provide an answer to any of my questions that are ignored by Councilwoman Lasker or Mr. Duer and I ask each of you also to respond to any answer given to me with which you disagree or on which you wish to elaborate. 

After some extensive remarks by Supervisor Gromack unresponsive to the particulars of the questions that had been asked the baton was casually tossed over to Duer who then remarked:

Duer:  So Mr. Hull number one I know what my duties and responsibilities are as comptroller of the Town.

With regard to the first question: has the town run some deficit budgets for the past several years? Well the answer to that is 'Yes'.  The town has in each one of those years budgeted the utilization of fund balance for the stabilization of taxes.  That's not any particular secret.

With regard to items 2, 3 and 4 I think the Supervisor has indicated that your answer has been completed or your question has been asked and answered and Standard and Poor's has reaffirmed our triple A bond rating.

Cutting further response from Mr. Duer off, Supervisor Gromack entered into a second long monolog about why the town had been dipping into the reserve balances which gave as the explanation “unexpected charges that the County had passed on to the Town”.

Thinking that he could then move on safely to “other questions” the Supervisor was stopped by Councilmen Borelli and Hoehmann who had each observed that Gromack, Duer and Lasker had all failed to properly respond to any of my questions.  Borelli interrupted:

Borelli: Alex, before we move on, I don't think we really answered question #2 with respect to Mr. Duer about the Triple A bond rating.  This is the question for those that don't have it -    what funds have to be in the reserve fund to preserve that (rating).

I know that to give an exact number might be difficult but you just finished having a review with the bond rating agency so I suspect at this point in time you are in the best position to answer that question, at least to give us a feel of where we have to be and I think that goes to question #3 as well. 

I did notice in the memo that I received today that our bond rating was affirmed which is a terrific thing.  It did say that we were also maintaining a “negative outlook” and the reason for the negative outlook in the letter was the fact that we are going into our reserves and taking money out and that is the deficit financing on the first question that you answered in the affirmative.  

So if you could give me and the other Board members and I think the public is entitled to know how close are we because there are some issues on the table.   We have a workshop scheduled in two weeks to discuss our capital expenditures. We are at a pretty serious point in the Town right now.  There are a number of capital projects that do need to get done and we have a budget and are talking about a 5 year capital plan in addition to a 5 year budget. We need to do that so we can sit here and be accountable to you for a certain dollar amount every year that we are going to borrow.  It is not an endless credit card that we can keep spending. 

I think we are all committed to doing that.  The difficulty we are going to have is picking which projects to do each year.  Right now there is $14 million in round numbers that we have projects on the board and ready to go.  But the Superintendent of Highways came to the last workshop and he presented a great need around the town.  I think we all know there are roads that need to be repaired at a cost of almost $5 million. Where is that money coming from?  That is what we have to grapple with. Because I don't think some of those $14 million projects can happen. I don't think we can just add another $5 million.   

So I am really concerned we are going to go into our reserve fund more for something as that might come up as part of the discussion. I would like to know if we go in for $1 or $4 million what will that mean to the bond rating agency?  I would really appreciate and answer on that question.

Duer:  I don't know if I can answer that quickly. I can give you an answer. I mean when you are giving a presentation to Standard and Poor's there are certain assumptions you go under. They make evaluations – the have various criteria for evaluating the town and its credit rating.  In addition to its fund balance, it talks about its management, it talks about economics ... there are a number of factors that go into it.

The State Comptroller’s office has a recommendation that they would like to see the towns have their reserves in the 20 % range.  The Town of Clarkstown has a fund balance policy now where it is 20%.  So based on our presentation to Standard and Poor's and our projections to them they affirmed our triple A with negative outlook because there would be more draw-downs of our fund balances and that’s why the negative outlook is there.  That is why we don't have a 'stable outlook' because we have drawn down over the past couple of years various fund balance accounts to stabilize the taxes.  These fund balance draw-downs were part and parcel of what was presented, approved and adopted.  

Again since Duer was not responding to the more specific insistence by Borelli that the Comptroller respond to the questions he had been asked, Councilman Hoehman specifically redirected his attention to the present level of the fund balance:

Hoehmann:  Are we at the 20%?

Duer:  No, we are below the 20%.  But even though we are below the 20% based on our presentation and our projections for the Town with the infusion of Middlewood funds they (the ratings agency) is in a position now to reaffirm the triple A negative rating.   They didn't give us a 'positive' but I guess if at some point down the road we do have that infusion (of cash from the sale of Middlewood) maybe the 'negative' outlook would change to 'positive'.   But right now I would say that the Standard and Poor’s is concerned that the town should they continue to make more draw-downs there would be an adjustment of this rating.

And then it was back to Supervisor Gromack's 'spin' in which he remarked that getting a cash infusion into the reserve fund was a “very positive thing both for the seniors of Middlewood and for the rest of the residents of Clarkstown” while again opining on the state of the County's finances over which neither he nor the Town Board of Clarkstown have any control.

The residents of Middlewood may now rest assured of three things:

1) Councilwoman Lasker is apparently so ill-informed of the fiscal state of the town, in which she serves as Deputy Town Supervisor at an additional salary of approximately $11,000 more than her colleagues, that at two successive Town Board meetings she could offer only a few arrogantly dismissive remarks or just plain silence to simple financial questions.

2) Middlewood residents have now been informed on the public record by the Town Comptroller, Ed Duer, that he made a presentation to the Standard and Poor’s bond rating agency informing it that funds would be placed into the Town's reserve balance promptly to maintain its AAA rating and that these funds would come from the immediate ‘fire’ sale of the Middlewood Senior Citizen Housing complex.

3) The Seniors of Middlewood are in the process of being sold out by Supervisor Gromack and Deputy Supervisor Lasker to save the town's financial rating while they both continue with their past practice of deficit spending, giving annual pay increases of 2.5% per year to police officers earning over $200,000 per year while providing patronage jobs such as that given to a County Legislator to supposedly work for 5 hours a day at a salary of $76,500 per year.

4) Any 'Public Hearing' to receive "input" from the Town's citizens and the residents of Middlewood appears now will be nothing more than a sham event that Supervisor Gromack will take the Board and the public through in the hopes of obtaining the votes of his Democratic colleagues, Lasker and Hausner, to override the probable opposition of Republicans Borelli and Hoehmann.

In the next article we shall explain why all taxpayers should object to Supervisor Gromack’s attempt to cover his financial butt for the next couple of years by selling a profitable Town asset for approximately $10 million. When assessed by a new buyer at present day equivalent rents this asset would return an annual income to the Town equivalent to a $20 million dollar investment which is therefore the true value of the property today. That is why buyers are lining up in droves to purchase this property in a 'fire' sale.

Should this sale be permitted to go forward Supervisor Gromack will be able to hide deficits for three or four more years until he is escapes the consequences of his actions by going into retirement and leaving the Town’s debt laden, property tax-exhausted, and asset-depleted citizens to pick up his financial mess.

Clarkstown taxpayers are now facing a second Great Clarkstown Giveaway.

“When bad people combine, the good must associate; else they will fall one by one, an unpitied sacrifice in a contemptible struggle” - Edmund Burke