State review challenges Glen Cove budget

Glen Cove's proposed 2012 budget doesn't address its deficit and includes revenue assumptions that may be overly optimistic, according to a review by state Comptroller Thomas DiNapoli's office.

The review called on the city council to devise a long-range financial plan to eliminate a general fund deficit of $5 million. It also criticized some of the city's borrowing practices.

"The city's efforts have not yet corrected the city's long-term structural budgetary problems," Deputy Comptroller Steven Hancox said in the report. "We believe that prompt action by city officials will help improve the city's financial condition."

The council has 90 days to submit a plan that addresses the concerns.

Mayor Ralph Suozzi said the city has been acting to address its fiscal issues but has been challenged by the recession, which reduced local revenue and state aid even as pension and health care costs went up.

"I'm still absorbing growth in expenses and shrinkage in revenue which are outside of my control," Suozzi said.

He said the city has a long-term program to address its general fund deficit, but it doesn't show up as a line item in the proposed budget. The city council is to vote on the budget Tuesday.

The mayor also took issue with the comptroller's concern that an estimated $400,000 in building permit fees the city expects in 2012 is overly optimistic. According to the report, the city has been taking in much less -- $166,000 in 2010 and $250,000 this fiscal year.

Moody's Investors Service in March downgraded the city's rating, to Baa3 from Baa1, citing its "distressed financial position."

The recession offset some positive steps taken by city government to restore structural budget balance while years of deficits that began under the previous administration left the city without reserves to cushion revenue declines, Moody's said in a report.

The city plans to borrow funds to pay successful property tax assessment appeals, but the comptroller's office noted that Glen Cove's budget plan appropriates just $100,000 for the settlements, which average $660,000 annually.

Suozzi's challenger in the November election, Republican Paul Meli, said the city should do more to cut spending.