Greenport residents may see tax hike after all

04/20/2011 10:59 AM |

Greenport taxpayers, who have been led to believe there will be no tax hike in the fiscal year beginning May 1, could see a 2.5 percent increase in the rate if Mayor David Nyce gets his way. The mayor disclosed in a phone interview Tuesday that he intended to ask the Village Board to agree to the increase to help pay down $3 million to $4 million of Mitchell Park debt.

Prior to the mayor’s disclosure, the budget proposal hashed out by the mayor and Village Board had called for holding the tax rate at $18.13 per $100 of assessed valuation.

The Village Board is expected to approve the proposed $2.89 million budget, $2,000 less than the current year’s budget, at its April 25 meeting. The mayor’s late call for a tax hike wouldn’t affect planned spending for 2011-12 but would start to provide a cushion to support future debt payments, he said.

The sale last year of a portion of Clark’s Beach to Suffolk County for $1.7 million will allow Greenport to keep up with debt payments through the 2011-12 fiscal year, Mr. Nyce said Tuesday. But that money will have been spent after next year, he added, and without a tax hike there will be a $190,000 budget shortfall in fiscal 2012-13. Compounding the problem, he said, debt payments will escalate from about $621,000 to $700,000 annually the following year and for the next five years through 2019.

It had long been speculated that the Mitchell Park debt would ultimately require a major tax hike or refinancing by 2014, but Mr. Nyce said unless interest rates were to plummet, it wouldn’t pay to refinance the remaining park debt.

“I would rather pay stuff now than kick the can down the road,” the mayor said. At the same time, he acknowledged that the financial picture could change by 2014 and it might then make sense to refinance the remaining park debt, incurred when the village created the park in the 1990s.

In the year ahead, the mayor said he expects the village to receive $62,000 in New York State grant money for the public bathrooms that were built in Mitchell Park. He also expects budget surpluses of about $53,000 to $55,000 to apply toward the $190,000 shortfall. Other revenues could come from back rental due from Southold Town for the scavenger waste plant site on Moore’s Lane, he said.

That controversial project, launched by the village and town back in the mid-1990s, was abandoned soon after its construction with accusations flying about who was at fault for its failure to work correctly. Closed for years, it took several village and town administrations to finally bring about a deal for the town to demolish the plant and return the land to the village in pristine condition. Still to be worked out is how much per year, and for how many years, Southold Town should pay the village in back rental fees.

Another possible revenue source would be rental of the remaining Clark’s Beach site, the mayor said. The plan had been to sell the remaining 8.9 acres, but with the real estate market down, it doesn’t seem likely to fetch a decent price, Mr. Nyce said.

At a budget hearing Monday night, the only comment came from former trustee Bill Swiskey, who asked why there was no provision in the budget for revenues from transient boat operators who use the railroad dock.

The mayor said he preferred to be conservative and not count on those revenues until he knows they are a sure thing.

At the previous budget hearing last Thursday night, only Mr. Swiskey and resident John Saladino posed questions to the Village Board. Among them was why surpluses from the water and fire departments couldn’t be used to reduce the general fund budget.

An apparent surplus of $50,000 in the fire department’s equipment budget line isn’t real, according to Trustee George Hubbard.

He explained that the installation of new accounting software resulted in delayed data entries so the numbers weren’t up to date; more than initially reported has been spent from that account. The revised reports weren’t available in time for Thursday night’s meeting.

In addition, money can’t be taken from the fire department and applied to the general fund to reduce taxes, Mr. Nyce said, because 70 percent of the cost of operating the department is paid by Southold Town to provide firefighting services in western Greenport, outside village boundaries. However, surplus money from a line within the fire department’s budget can be applied to the apparatus fund so there’s money for a new truck, ambulance or car when one is needed, Mr. Hubbard said.

Similarly, the village can’t take money from the water fund and apply it to the general fund. It can and does take payments in lieu of taxes from the village’s three enterprise funds — water, sewer and electric. But the amounts that go to the general fund aren’t “arbitrarily” set, the mayor said. They’re based on what the taxes would be on those properties, he explained. In recent years, the board has reduced those amounts, but because of the economic downturn, it has proposed raising them to help cover the next fiscal year’s spending without increasing taxes for residents, Mr. Nyce said.

The mayor said he would look into complaints by both men about fees they said weren’t being paid by some users of the railroad dock.

While no names were mentioned, the reference was to Trustee Mary Bess Phillips and her husband, Capt. Mark Phillips, who operate boats from the dock. For years, Mr. Phillips has provided in-kind repair and maintenance services in lieu of doc payments, including placement and maintenance of speed buoys for the village. That practice has been in place since 2004 under both the present administration and that of former mayor Dave Kapell.

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