Blue Point fire district underspent budgets while boosting tax levy, state audit finds

Blue Point fire officials may have overtaxed residents for six years by inflating annual budgets and building unnecessarily large cash reserves, the state comptroller's office said in a report on the fire district's finances.

The district underspent budgets by a total of about $1 million from 2019 to 2024 while boosting the annual tax levy during those years by a total of 36%, from $1.1 million in 2019 to $1.5 million in 2024, state auditors said in the report released last month.

"Because the board [of fire commissioners] did not adopt budgets with reasonable estimates or have a fund balance and reserve fund policy, the board’s intentions regarding fund balance were not clear, reserves may have been overfunded and real property tax levies may have been higher than necessary," the report said.

The office of state Comptroller Thomas P. DiNapoli ordered the district to update its budget policy and improve its financial controls.

Walter E. Dunn III, chair of Blue Point's board of fire commissioners, did not return a message seeking comment.

In a letter included in the comptroller's report, Dunn disputed parts of the audit and defended the district's spending and taxing practices.

In part, Dunn wrote, board members intended to store up reserves for future equipment purchases to save money for taxpayers.

Dunn blamed some overspending on payments related to a voter-approved 2024 bond referendum. Two years earlier, he wrote, the district sold a piece of equipment for $160,200 and transferred the proceeds to a capital reserve fund for equipment purchases.

"Since the COVID-19 pandemic, the cost of apparatus ... has exponentially increased," Dunn wrote. "The district's intent is to fully fund future construction of apparatus and vehicle purchase costs to avoid burdening the taxpayers with additional financing costs."

The Blue Point Fire District serves about 4,700 residents in the South Shore hamlet in Brookhaven Town.

The comptroller's office has conducted a yearslong campaign to audit the books of towns, villages and counties and fire, school and library districts. The general purpose of those audits is to educate public officials about accounting and spending practices, officials have said.

The Blue Point audit echoes recent state audits that found some Long Island school districts accumulated higher-than-permissible unrestricted reserves. 

Rebecca Dangoor, a comptroller's office spokesperson, said there is no deadline for Blue Point to comply with the audit's recommendations, adding the report's guidelines are "advisory."

"The audit provides district residents and taxpayers with information to engage in informed discussions with the board about the actions they decide to take to address the identified deficiencies," she wrote last week in an email.

The comptroller's report said Blue Point budgets exceeded spending by 4% to 47% from 2019 to 2024; over that period, the district collected $1.04 million in revenues that it did not spend, including $374,641 in 2024 alone.

Overall, the district budgeted $5.2 million over those six years but spent only $4.2 million, the report said.

Annual surpluses, meanwhile, nearly tripled, from about $330,000 in 2019 to almost $900,000 in 2024, the report said.

By Carl MacGowan

carl.macgowan@newsday.comCarlMacGowan

Carl MacGowan is a Long Island native who covers Brookhaven Town after having previously covered Smithtown, Suffolk County courts and numerous spot news and feature stories over his 20-plus year career at Newsday.