Oyster Bay budget aims to boost reserves

The Oyster Bay Town budget to be released today will not increase taxes, but will still boost depleted cash reserves, the town comptroller said.

A reduction in cash reserves from $20.3 million at the end of fiscal year 2005 to $375,000 at the end of last year spurred Standard & Poor's Ratings Services to lower the town's bond rating in June.

Comptroller Robert McEvoy said the budget contains several elements to rebuild the cash reserves.

"We're going to be increasing user fees and cutting back on overtime," he said. And the town hopes to recoup tax refunds it paid to Verizon after a recent court decision and apply that money to the reserves.

McEvoy said the town plans to add $10 million to cash reserves next year and eventually get the account to $20 million.

He said the town expects to cut overtime payments next year by $2 million from this year's budgeted $5 million. Fees for commuter parking and recreational activities at town parks will be raised. Details about the increases will be available with the budget's release Friday.

There will be no increase in the general town tax rate or the rates for any of the special districts over which the town has direct control, and no reductions in services, McEvoy added. Supervisor John Venditto, who is running for re-election this year, had promised to not raise taxes or cut services, and to increase cash reserves when the bond rating was reduced.

Standard & Poor's credit analyst Kate Hackett, whose report led to the downgrade from the top rating of AAA to AA for general obligation bonds, said yesterday that "we can't really comment on something we haven't seen, but any effort to increase the cash reserves would be considered a positive."

The state Court of Appeals in May declined to hear an appeal by Nassau County in a lawsuit by Verizon against North Hempstead over whether the town or county was responsible for paying garbage tax refunds to Verizon. In 2005, Oyster Bay was ordered by the same court to pay Verizon $3.4 million in a similar lawsuit. After the victory by North Hempstead in its case, Oyster Bay approved a resolution to sue the county to try to recoup that money so it can be added to the cash reserves next year.