At a Southampton Town Board work session on Friday, board members gathered to talk about the discrepancies in the capital accounts. At last week’s work session, council members discovered that there was an approximate $19 million difference between the $16 million actual cash on hand and the $35 million the department heads thought they had in their accounts. Town supervisor Linda Kabot said that this difference in figures could be due to bonds being authorized, but never issued. Now, the board will be looking to go back through all the outstanding capital projects to determine which ones will be priority.
At Friday’s meeting, the town’s management service administrator, Richard Blowes, Tamara Wright, a finance consultant and comptroller Steve Brautigam met with the board members to discuss their plan of action.
Councilwoman Nancy Graboski first spoke at the meeting, giving insight as to what she believes will be the best way to move forward. Graboski and councilwoman Sally Pope were in several meetings this week with the town’s audit committee on the topic.
Graboski said that this issue is particularly disconcerting now because of the current state of the economy.
“This is top priority as far as I’m concerned,” she said on Friday.
Graboski stated that the audit committee intends to gain a full understanding of why these issues have arisen and then put forth their plan of action. She explained that a piece of software called, Team Budget could be utilized to prevent these types of situations in the future.
When Blowes tried to offer the board a history of what has occurred with capital accounts over the past few years, board members Chris Nuzzi and Anna Throne-Holst questioned why they weren’t getting all the account information at Friday’s meeting.
“I appreciate the accounting of what’s happened,” Nuzzi said. “I thought today would be over the capital budget and what happened this year.”
Blowes explained that he was told by Graboski that a good idea would be to go over the chronological history of what has been happening with the accounts over the past few years, so that he may bring the town board up to speed.
“My concern is there is not sufficient time to provide in that level of detail,” Blowes responded.
Throne-Holst agreed with Nuzzi, saying she thought the meeting was going to be held to discuss the realistic situation of the accounts.
“This has not been made clear, and certainly not to me,” the councilwoman said and added she has been requesting a copy of the capital budget for a while.
“What we have is some numbers,” councilwoman Graboski said, “there isn’t anyone willing to stand behind those numbers…then and only then will we be able to state with certainties that we can go forward with the systems and complete the computer software we need in the first quarter to get these numbers and this research back up.”
“Time is up now, I don’t think the board and the public can except to wait until April,” Throne-Holst maintained. Â
Kabot explained that at first, the priority was on the $7.5 million deficit thatÂ was accumulated over the years 2004 through 2007 for police, highway, and waste management expenses, in the $82.5 million operating budget.
“We needed to fix it and go line by line and expense by expense,” she said before adding that now, the capital plan will be priority.
“Let the process and the priorities be laid out, hypocritical doesn’t work here,” the supervisor said.
“We are trying to take the bull by the horns at this point,” Graboski added.
Kabot said that the town hired a financial consultant to go over the information, and a Microsoft consultant to go over the software and address these problems.
“We now have all the cash accounts reconciled through November,” explained Wright. What she was advocating for at the meeting was the implementation of Team Budget, a budgeting software tool. She said that the software consultant said it was never fully implemented but now her plan is to bring the software consultants back in.
“As soon as an account goes negative, and you know you need to bond, it [the computer program] will trigger it is time to borrow,” Wright said.
“This is so you don’t prematurely borrow when you are not ready,” Kabot explained.
“They are coming in February and will install it,” Wright added. “So starting in the first quarter, department heads can work on their budgets.”
Comptroller Brautigam explained the reason for the so-called “missing funds” is because the “computer program is saying there is much more because the town board approved the projects.” Brautigam further explained that sometimes the projects are approved but the money wasn’t borrowed straight away, which is common because it saves money on interest and bond council costs.
For example he explained that he recently got a quote for a $20 millionÂ bond and the interest rate was 3.85 percent. But for a bond of $2.5 million the rate was two percent.Â
Kabot said that there may be critical projects such as building or road repairs, but added, “We are not floating another bond until we have a good handle on our bonded indebtedness.”
Nuzzi asked for an immediate list of projects so that the board may consider those that may be of priority, like projects in the highway department or public works.
“What may be a greater issue is why are we authorizing projects that are not being done right away,” he asked.
“You’ve hit the nail on the head,” said Kabot. The supervisor said there are some projects that could have been given dual names in an account.
“We will scrutinize all of it,” said Nuzzi of all capital projects.
The board will meet on February 13, for a work session on public works, to see if there are any projects that need to be handled immediately.