Brookhaven Town must slash capital budget

Brookhaven Town must slash its capital budget in the coming years or it will risk violating one of its own laws designed to prevent the town from taking on too much debt, town officials said.

Brookhaven last year adopted a law that requires the town board not to use more than 15 percent of the town's general fund to pay for debt.

But even if the town takes on no new debt in the next four years, it projects to spend nearly $25 million on financing its debt in 2015, town finance commissioner John O'Neill recently told the board. That figure will likely constitute more than 20 percent of the town's budget that year, O'Neill said.

Violating the debt policy would downgrade Brookhaven's credit rating, O'Neill said. The news has prompted town officials to call for cuts to Brookhaven's capital budget -- which includes building projects often paid through bonds.

"The capital budget will be dramatically reduced," Supervisor Mark Lesko said in an interview. "We are by law capped in terms of our spending for debt. We are looking very strictly at new projects."

The need to cut capital projects could result in the town deferring projects such as the replacement of the roof on Town Hall in Farmingville, Lesko said. The town is scheduled to spend $2 million on the project in 2012, town records state.

Park improvements, vehicle replacements, road projects and land use studies could also be pushed back, Lesko said. The town could also save money by paying down debt with funds left over from finished projects, he said.

Town officials will comb the capital budget for cuts this year, Lesko said.

But some town board members are skeptical. Councilman Daniel Panico said the debt cap might have been a "laudable goal," but questioned whether that was "realistic."

Said Deputy Supervisor Kathleen Walsh: "There's almost nowhere else for us to cut."

The debt cap was approved by voters by a nearly 3-to-1 margin in a November referendum that attracted more than 98,000 votes.

The debt cap, along with spending and property tax caps also approved by voters, were designed to rein in town finances.

In the past 17 months, the town has also cut its general fund by 26 percent, reduced annual borrowing by more than 57 percent and cut its full-time workforce by 107, Lesko said. But the town has also seen revenue dry up, including a $24.8 million reduction in mortgage taxes since 2006, he said.

Councilwoman Jane Bonner said the town must go on a "debt diet" to avoid hurting its bond rating. Otherwise it will cost more money for the town to borrow, O'Neill said.

"It will severely impact the finances of the Town of Brookhaven, and the taxpayers will have to foot the bill for it," he said.