Sag Harbor Mayor Criticized for Lack of Capital Spending Plan

Posted on 09 April 2014

By Stephen J. Kotz

Former Sag Harbor Mayor Pierce Hance was ready with the questions when the village board held a public hearing on April 2 on Mayor Brian Gilbride’s proposed $8.5 million budget.

Mr. Hance, who is a financial analyst, said the mayor’s failure to have a capital plan in place would have dire consequences as the village is required down the road to undertake dock and bulkhead repairs, drainage projects and even replace fire trucks.

“We have a couple of million bucks,” said Mr. Hance, referring to the village’s fund balance and repair funds, “and I can come up with $4 million in projects. I want to know what is your capital plan?”

“I haven’t even touched on the fire trucks,” he added. “In a couple of years we are going to spend a million dollars on fire trucks.”

When Mayor Gilbride said he wanted to avoid borrowing money to cover village projects, Mr. Hance asked “How are we going to pay as you go without a rather material increase in the tax rate?”

Mr. Hance also took aim at the mayor’s operating budget, saying it did not accurately reflect where the money would come from to meet certain expenses, such as a new police contract, which is currently in arbitration.

“Then you have an estimate of the cost?” asked Mr. Hance. “I have an assumption,” replied the mayor. “So there is enough money buried in this budget to take care of this?” pressed Mr. Hance. “No, it means something I’d like to get done won’t get done and it would be reallocated,” said Mr. Gilbride. “So, one more time we borrow from Peter to pay Paul,” said Mr. Hance.

Although the board had a resolution on its agenda to close the budget hearing when it met Tuesday night, it took no action, and Mayor Gilbride said a work session would be scheduled to work out final details of the spending plan before the May 1 deadline.

On Wednesday, Mr. Gilbride defended his approach to budgeting.

“Pierce is a smart, knowledgeable guy, but he’s just throwing harpoons,” Mr. Gilbride said. “I’m a pay-as-you-go guy. I’m not a guy who borrows a lot of money. We’ve gotten a lot done in this village without a capital plan.”

Mr. Gilbride said he prefers to budget for work as needed and do only what the village can afford at any time. Despite having no plan to create a capital plan, which is essentially a priority list for major infrastructure-related projects, Mr. Gilbride said he was looking forward to installing an elevator in the Municipal Building, earmarking money to help waterfront homeowners replace aging septic systems and to undertake some drainage improvement projects, and developing parkland south of the Jordan Haerter Veterans Memorial Bridge.

The mayor said the village is still paying off some bonds that were issued when Mr. Hance was mayor. “It was cheap money back then too,” he said. “We have refinanced and saved about $170,000 in interest and I’m proud of that.”

But Mr. Hance found some support from Mr. Gilbride’s colleagues. “I think he raised a lot of questions,” said Trustee Ken O’Donnell on Wednesday.

“You don’t work your entire life to be able to buy a house. You take a mortgage,” he said. “There is good debt and there is bad debt. Bonding to repair Long Wharf I’d say is good debt. With interest rates at all-time lows, why aren’t we bonding it and using cheap money to help with the infrastructure of the village?”

Mr. O’Donnell said he had grave concerns about the mayor’s efforts to pay for an elevator in the Municipal Building and suggested rather than sinking $200,000 to $300,000 into that project, the village should find out if the third and fourth floors, which are not used now because they are not considered safe, can be renovated and rented out as office space to bring in additional revenue.

Although it is a small item, Mr. O’Donnell said he wanted to restore the $4,000 the village used to give to the Chamber of Commerce to staff its tourism kiosk at Long Wharf. “I’m looking forward to some give and take,” he said of the budget process.

Trustee Ed Deyermond also expressed misgivings about the elevator project. “If you try to run an elevator up there we have to be very careful to make sure the building is structurally sound,” he said Wednesday, adding there could be hidden costs.

“A capital budget is a key to municipal finance,” he said. “Without a capital budget you have to pay for things as you go and we’re typically talking about huge expenditures for things like road improvements, drainage and fire trucks.”

But Mr. Deyermond stopped short of saying he thought the village should have a capital plan and said he doubted the mayor would develop one, especially not this year with the deadline for adopting the budget less than a month away.

Mr. Hance was not as diplomatic. “This budget is a joke,” he said on Tuesday. “The finances of the village are a joke. On the operating side, I don’t have any confidence at all. On long term capital planning I have even less.”

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