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Babylon to vote on establishing $7M solid waste reserve fund, plus one for capital projects

Babylon Town officials will not have to bond

Babylon Town officials will not have to bond or use fund surpluses to pay for capital projects once they establish separate reserve funds for such work. Credit: Barry Sloan

The Town of Babylon for the first time is establishing separate reserve funds to set aside money for capital and solid waste projects.

The town board is expected to vote next week on placing $7 million into the solid waste fund. The town is also setting up a capital projects reserve fund but has not determined how much money it will contain.

“The whole idea behind [reserve funds] is if the town has an available fund balance that it can set aside and it has a need to set it aside, then we’re allowed to do so,” said comptroller Victoria Marotta. She said several other towns on Long Island have reserve funds, including Brookhaven and Huntington.

In the coming years, the town has multiple capital projects, including road improvements and park upgrades, as well as costly solid waste projects at the town ashfills that hold the ash from waste burned at the Covanta plant in West Babylon.

By placing money for these projects into a reserve fund, the town will not have to bond for the work, Marotta said. The town has previously either bonded or, through the budgeting process, used fund surpluses to pay for such work.

“It’s a really wise move,” said town Supervisor Rich Schaffer. “We haven’t done it before but we’ve been talking about it and we feel we’re in a very good place to do it because of our AAA bond rating.”

Once money is taken out of town funds and put into a specific reserve fund, it must be used for that purpose and cannot be put back, Marotta said.

The ashfill work is considered especially costly. It includes building walls for one ash cell, capping another cell and building a new cell. The work, to take place over the next 10 to 15 years, is estimated to cost between $30 million and $40 million, according to town spokesman Kevin Bonner.

Babylon has been criticized by the state comptroller’s office in the past for building up too high of a surplus in its garbage fund and was advised to lessen the amount by, among other suggestions, creating reserve funds. In a 2009 audit, the state wrote that the town had built up the surplus over several years by underestimating revenue from garbage fees and overestimating expenditures.

The town at the time used the surplus toward ashfill work and the creation of a leachate sewer line from the ashfill, officials said. In the past 10 years, the town has slowed the fund's surplus accumulation in part by lowering the garbage tax rate, Bonner said. 

Schaffer said the town decided to create the reserve funds now “to show the long-term commitment to these projects and show the public here’s where your money’s going and here’s why this is a good thing, because we’re saving money because these projects would have been more expensive if we didn’t do what we’re doing.”

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