Glen Cove's $69.9 million 2014 budget adopted last week stays under the tax cap but got mixed reviews from the state comptroller's office.
While New York State Comptroller Thomas DiNapoli praised the city and Mayor Ralph Suozzi for the progress Glen Cove has made improving its fiscal health, DiNapoli's office sharply criticized the budget before its adoption for borrowing to pay for tax certiorari settlements and relying on "unrealistic revenue estimates and one-shot revenues."
"The city continues to finance operating expenditures with debt when it should be funding such expenditures with operating revenues," the comptroller's office said in a letter. The city plans to borrow to pay for tax certiorari settlements, expected to be about $600,000, when in recent years it has paid them with a mix of debt and operating funds.
The letter said if revenue -- which include the potential sale of city-owned property for $250,000 -- don't come in as budgeted, the city's deficit could increase.
Suozzi said the comptroller's office was conservative on revenue, and also said borrowing was necessary to stay under the tax cap.
Under the budget, taxes on residential properties will increase by 1.67 percent and taxes on commercial property will increase by 3.24 percent. The overall increase on the property tax levy will be 1.44 percent, which is under the 1.66 percent dictated by the state tax cap. Overall spending would rise by 3.7 percent compared to this year's $67.4 million budget.
Glen Cove must submit its budget to the comptroller for review because in 2007 it borrowed $12.8 million to pay off accumulated deficits, a move that required additional oversight.
"The thought at that time was the city would be able to eliminate the deficits it had run and then structurally balance the budget and kind of give the city a fresh start," said Moody's Investors Service analyst Robert Weber. "Unfortunately aggressive budgeting for revenues continued after the deficit reduction bonds were issued and the city has gone back to running deficits."
Weber did note that over the past two years the aggressive budgeting trend was improving and stabilizing.
The comptroller's office this year began using a fiscal stress monitoring system to look at local finances across the state. City officials using the comptroller's criteria showed that Glen Cove has moved from "significant fiscal stress" in 2005 to "moderate fiscal stress" today.
"It's a very good budget," said Suozzi after the council's 4-2 vote last Tuesday adopting his eighth budget.
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