After a contentious budget process in the midst of an election, the Southampton Town Board adopted the final 2010 budget on Friday, November 20. Despite revisions to the fiscal plan, the board is still increasing the tax rate by a full five percent. A homeowner, with a property assessed at $500,000, will pay an additional $33 in town taxes next year, or $1.38 per $1,000 of assessed valuation. In 2009, the tax rate was $1.32 for every $1,000 of property value. The overall spending for the town in 2010 remains at around $78.8 million.

Above: Supervisor-elect Anna Throne-Holst and current supervisor Linda Kabot mull over the 2010 budget plan for Southampton Town.

As a last order of major business for supervisor Linda Kabot, she presented a preliminary 2010 budget in late September. The plan was widely debated throughout town hall as it called for 48 lay offs and privatizing the animal shelter; though Kabot said she had found a way to clear the deficits in the highway and police fund.

The board received the most criticism over staffing cuts from union members and community constituents, and have since decided to maintain several positions. Overall, 37 positions were cut, but 11 of these jobs were already vacant, 10 positions were related to the animal shelter and five staff members will likely accept a retirement incentive.

The adopted 2010 budget notably reinstates the transportation and traffic safety director, a community service aide in the senior service department, the assistant director of the youth bureau, a youth counselor, and five sanitation helpers and one scale operator in the Waste Management Division. Others, however, didn’t fair as well in the final round of budget talks. The grant analyst was eliminated, as was the building projects coordinator due to a reshuffling of the department of public works. The supervisor-elect Anna Throne-Holst will realize around $90,000 in savings from eliminating two positions in the supervisor’s officer. One of these positions, that of citizen advocate, however, was simply transferred from the supervisor’s office to the council office in a measure sponsored by Kabot.

A resolution backed by councilwoman Throne-Holst, councilwoman Nancy Graboski and councilwoman Sally Pope might signal the exit of current town attorney Dan Adams in the coming year. The amendment proposed that deputy town attorney Kathleen Murray will “serve as the acting town attorney during a transition period” over the first six months of 2010.

The board was able to save several positions mainly through reducing the monies allotted for deficit reduction in the highway and e-911 fund, increasing estimates for revenues like building permit fees and raising the Cablevision franchise fee from four to five percent, among other measures.

In the 2010 budget, the town has set aside around $2.8 million to pay down past deficits. Comptroller Tamara Wright warned, “The $2.8 million does not address the capital fund IOU. This isn’t really enough money to make a big dent in your deficits … Your financial health includes your cash balance and there isn’t a great deal of room to be off in your revenue estimates.”

The capital fund deficit, estimated at around $6 million, wasn’t directly addressed in the operating budget for next year but the town board has several options in dealing with this sizable debt. Kabot lobbied to pierce the five percent tax rate cap solely to handle these deficits, not new spending; but her resolution was voted down by Throne-Holst, councilman Chris Nuzzi and Pope. The town also has the option of surplusing, or selling off, certain properties next year, another idea proposed by Kabot. Or, the town could pay the capital fund debt through deficit financing, though Kabot argued the state would then have greater oversight into the town’s finances and deficit financing could potentially weaken the town’s credit rating.

“We still don’t have the final numbers. I would leave this aside for the moment and deal with it when we have these numbers,” suggested Throne-Holst.

In other measures, the town tabled a resolution to take out a $275,000 bond for a video arraignment system, decided to fund a total of seven board members of the Zoning Board of Appeals and maintained a hiring freeze.

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In light of Southampton Town’s troubled finances and decreased revenues, supervisor Linda Kabot asked the town board to consider “lock boxing” money for the Community Preservation Fund (CPF). Kabot says the plan would allow the town to continue paying off the CPF’s annual debt without relying on the general fund to cover any shortfalls from decreases in transfer taxes, which is the CPF’s main revenue source.
“You would do this in your own home. If you had a mortgage and you lost your job, you would want a savings account to pay for your obligation,” explained Kabot. “We have a mortgage on the CPF program that is over $100 million.”
Over the past 10 years the town spent around $400 million on land purchases, continued Kabot, but only received $300 million in transfer tax revenue. The remainder of this expense was procured through bonding. This year the town will pay around $9 million towards the principal and interest on these bonds, though next year these payments will increase to roughly $10 million. Kabot said the town should be “judicious” when deciding whether to purchase a piece of property in the future as the town will most likely have to bond for future purchases.
“If we are getting $1 million a month in revenue that is $12 million for the year, minus $10 million which is spoken for for debt services, leaving us with $2 million if we are giving certain school districts and other eligible districts PILOTs [Payment In Lieu of Taxes],” explained Kabot. “If you’re going to be paying for land and you aren’t doing it on a pay as you go basis, you may be borrowing and that will increase your debt services.”
Based on recommendations made by former town comptroller Steve Brautigam, Kabot’s plan, which is in the form of a resolution, calls for the creation of a $1.2 million preliminary cushion fund. This money is already in CPF coffers and was transferred there at the end of 2008, when it was ascertained that the CPF fund paid too much into the town’s debt clearing fund.
CPF manager Mary Wilson said the second part of the resolution would “designate a portion of future monthly revenues” which would go into this rainy day or debt reserve fund. For the next six months of 2009, Brautigam proposed that $250,000 in CPF revenue be segregated for this fund. In 2010, the town would increase the allotted savings to $350,000 per month.
“The goal is to get up to a point where there is at least $11 million in this reserve fund or at least one year’s debt services,” said Wilson.
Current town comptroller Tamara Wright said the town’s projections of receiving around $1 million a month in revenue wasn’t conservative. She added that last month, the town received only slightly over $1 million, but in the prior months, received under $1 million.
“If we were planning conservatively, by my estimation, you would be almost $3 million short of being able to reserve adequately,” said Wright. “If the revenue streams stay where they are, paying for properties out of cash is going to be very difficult for the next 18 to 24 months.”
“The dilemma is that this is an unprecedented opportunity to stockpile open spaces at prices that aren’t going to stay at this level in our lifetime,” observed councilwoman Anna Throne-Holst. “We need to look at the bigger picture. It is estimated that for every $1 of land that is developed rather than preserved $1.30 is needed to provide services for the infrastructure that goes with that.”
Kabot said she hoped the board would come to a consensus vote at the next town board meeting on Tuesday, June 9.

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For months the Southampton Town Board has discussed pursuing legal action against Cablevision, each time tabling the resolution. On Tuesday afternoon, however, the board unanimously agreed to hold off on litigation and instead file a formal complaint with the New York State Public Service Commission (PSC) regarding their franchise agreement with the local cable provider.

“I think this accomplishes what we wanted . . . I am disappointed that Cablevision wasn’t more amenable [in offering] a second box without any restrictions. It may not be a lot of people but we want to take care of them,” said councilwoman Anna Throne-Holst during the town board meeting. In the fall of 2008, Cablevision offered free “converter boxes” to analog-only households, but the promotion ended in December. Southampton Town Attorney Dan Adams wondered why the company wouldn’t leave the offer open indefinitely, since only a fraction of their customer base is eligible for the free boxes. The boxes will be critical for allowing individuals who now rely on over the air service to receive public access channels once the system goes all digital.

“I realize that we have a generous offer, exclusive to the East End, for free boxes to analog subscribers. But that doesn’t go far enough in my view,” stated town supervisor Linda Kabot. She added that Plum TV and News Channel 12 are still available on analog format, but not the public, educational and government (PEG) channels.

“We don’t comment on how we determine which channels are migrated,” said Patrick MacElroy, the Director of Media Relations for Cablevision, on why some 45 channels are still provided on an analog service. He noted though that his company was looking to become an all-digital provider in the future, following in the footsteps of their competitors.

Previously, Joan Gilroy, the director of governmental affairs for the company, said her employer was willing to re-instate the free “converter box” offer for another 90-day period. As the board proceeds in filing a formal complaint, it appears unlikely that this offer will remain on the table.

MacElroy wouldn’t comment on this promotional offer directly but said: “For several months late last year, analog customers who wanted to continue to receive these channels were offered a free digital set top box for life. We had proposed an extension of this free box offer but were unable to come to an agreement with the Town.”

Southampton Town’s lengthy negotiations with Cablevision fit into a larger issue up for national debate.

“Does the cable company have the right to digitize access channels?” Gilroy declared at a previous meeting.

Currently, the Federal Communications Commission is weighing in on this question, said Adams. He added that the FCC closed a comment period in early April and received around 800 formal comments from municipalities across the country on the issue. Adams said he had yet to see the PSC make a verdict. As the PSC is a state organization, Adams said they would most likely defer to the FCC’s ruling. Although, he noted it is still unclear if the FCC in turn will defer this issue to the state.

Councilwoman Holst added that it would be unwise for the board to move forward with a lawsuit if the FCC ultimately votes in favor of allowing cable providers to switch public access channels from an analog format to a digital format.

“This has been dragged out for many months,” noted Councilwoman Sally Pope.

“Enough is enough. It’s time to file a formal complaint,” added Kabot. She went on to say that filing the report would “cost nothing except the postage,” which the board commented had gone up to 44 cents on Monday.

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