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Babylon Village didn’t disclose $190G in unbudgeted raises, records show

The Babylon Village board of trustees, from left:

The Babylon Village board of trustees, from left: trustees Deborah G. Basile and Kevin S. Muldowney, Mayor Ralph A. Scordino, and trustees Anthony J. Davida and Mary E. Adams, at a meeting Tuesday, April 25, 2017. Photo Credit: Danielle Finkelstein

Babylon Village officials issued more than $190,000 in raises to 23 full-time nonunion employees last summer without budgeting for the increases or disclosing them to the public, records show.

Those raises were among nearly $440,000 in pay increases the village gave to full-time workers in June 2016, two months after its board passed a budget forecasting only a $78,900 increase, the records obtained through the state’s Freedom of Information law show.

The raises were one cause of a more than $715,000 jump in annual employee benefit expenses — all of which could mean higher tax bills, Babylon Village Mayor Ralph Scordino said in an April interview.

“We’ll probably have to raise taxes,” he said, although not in the coming fiscal year.

Scordino said the raises were given in part to make village salaries more competitive. He cited tradition as the reason for not publicly voting to approve the nonunion increases.

“This is the way we’ve always done it,” said Scordino, who has been mayor for 14 years.

The village customarily increases the salaries of nonunion employees when their union counterparts get raises, he said. The board typically does not vote on nonunion raises given outside of the annual budgeting process, he said.

However, after Newsday contacted village officials about the undisclosed nonunion raises, the board voted unanimously Tuesday to retroactively approve them publicly.

The new resolution states that it “clarifies” that board votes on raises for union employees in May 2016 “were intended to also apply to nonunionized village staff.”

Retired village treasurer Joan Crockett said taxpayers were left in the dark about public spending that they will be on the hook for going forward.

“It’s just not transparent government,” said Crockett, the treasurer from 1996 to 2006, who ran unsuccessfully for a seat on the village board in March. “You have to make it public that you’re doing this.”

Newsday’s review of records found:

  • The village board approved about half of the raises — for unionized employees — by adopting a new collective bargaining agreement at a public meeting in May 2016. The nonunion raises were not voted on and disclosed until Tuesday, 10 months after they kicked in.
  • Half of the pay increases, union and nonunion, went to employees making less than $40,000 per year.
  • Ten full-time department heads received raises, eight of which were previously undisclosed to the public, including a $9,320 increase for Public Works Superintendent Charles “Skip” Gardner, whose total pay in 2016, including salary, overtime and other payments, topped $179,000.

The $15,000 salary of the mayor and the $7,500 paid to each trustee did not increase.

The village plans to fund the salary and benefit cost increases by drawing on a roughly $2.8 million surplus it accumulated by June 2016 after increasing taxes every year from 2011 to 2014.

Tim Hoefer, executive director of the Empire Center for Public Policy, a fiscally conservative think tank based in Albany, questioned how the village will afford the raises after its fund balance is drawn down.

“I have a hard time understanding, without digging into their finances, how that’s going to be sustainable in the long term,” he said.

The raises were intended to help the village attract and retain low-wage employees and to bring salaries in line with those in nearby villages, Scordino said.

They were also awarded to comply with federal regulations requiring that the salaries of employees who receive health care through the village are above a certain threshold, which was about $14 per hour in 2016, Village Treasurer Valerie Fronzo said.

Robert J. Freeman, the executive director of the state’s Committee on Open Government, said that a municipality must disclose new, unbudgeted expenses such as pay raises in public board meetings.

“A vote to appropriate public money by law must occur in public,” he said.

New York State Village Law requires new or increased appropriations during a fiscal year to be passed “by resolution” of a village’s board of trustees.

Babylon Village law also states that “the compensation of Village officers and employees is set by resolution of the Board of Trustees.”

Bill DeWitt, an attorney who represents the village in labor matters, called it “an oversight” that the board resolution approving the union raises in May did not mention the $191,560 in nonunion raises.

Officials from the nearby villages of Lindenhurst, Farmingdale and Brightwaters said their boards rarely grant raises to nonunion employees outside of the budgeting process. When they do, however, they adopt resolutions in public meetings to approve them, the officials said.

“It’s taxpayers’ money; they’re entitled to know” how it’s spent, said Farmingdale Village Administrator Brian Harty.

The union and nonunion pay increases are included in Babylon’s 2017-18 budget, which shows a more than 20 percent growth in full-time salaries and a roughly $3.6 million total payroll.

The $11.52 million budget, adopted on April 11, also includes 26.7 percent more for workers’ compensation coverage, retirement costs, medical insurance and other employee benefits — an increase of more than $715,000 over last year. The raises awarded last summer and changing insurance rates triggered the growing benefit costs, Fronzo said.

To pay for the higher salaries and benefits in the coming fiscal year, which begins June 1, the village will increase the amount it draws from its fund balance by 345.59 percent — from $237,000 to $1,056,058.

That fund balance is what will be left of the roughly $2.8 million budget surplus that the village started with in the 2016-17 fiscal year. The surplus was accumulated after the village increased taxes for four consecutive fiscal years beginning in 2011, including a 9.71 percent jump in 2013-14, budget documents show.

The village’s surplus will probably shrink by the start of the 2017-18 fiscal year in June, Fronzo said.

Fronzo said the village accumulated the surplus to help it pay for the costly cleanup that followed superstorm Sandy in 2012 while waiting for federal and state reimbursements, and because revenues exceeded projected amounts.

“We were cautious,” she said.

The village has not increased taxes since the 2014-15 fiscal year.

Brian Butry, a spokesman for New York State Comptroller Thomas DiNapoli, said the state has no standard on how large of a surplus municipalities in New York may hold.

“Our guidelines recommend a reasonable amount of fund balance be held in order to deal with potential revenue shortfalls or unanticipated expenses during a budget year,” he said. “But we also have the expectation that local officials are going to put those funds to good use over the course of time.”

State officials declined to comment specifically on the raises or surplus in Babylon Village.

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