August 05, 2005

TOWN OF GATES IN SERIOUS FINANCIAL TROUBLE

In March 2005, the New York State Comptroller's office sent state auditors to Gates to do a "Risk Assessment" review of the Town's finances to determine if there was indeed a problem. They found sufficient cause to do a full audit of the town for the past five years. The Comptroller's Office is not here to help the Supervisor figure out ways to save money, but it is here to uncover irregularities in the Town's financial statements and make recommendations. It appears Gates has been on their radar for awhile.

The Town of Gates' indebtedness has grown by nearly $4 million in 2003 and 2004 while the Town's finances continue to deteriorate. According to the Town's audited financial statements for 2004, page 3, "The Town's net assets decreased by $1,829,618 for the year ended December 31, 2004" and "The Town borrowed $1 million in a Revenue Anticipation Note in August 2004 with repayment due in August 2005. The 2005 Budget does not provide for repayment of the note and the Town will need to increase the note to cover budget deficits in 2005."

In fact, Gates borrowed $1,923,977 in April 2005. $1,000,000 of this amount will now have to be used to pay off last year's loan to cover budget deficits in 2003 and 2004. The remaining $923,977 is new borrowing to cover additional budget deficits in 2005. This borrowing will cost the Town nearly $60,000 in interest in 2006. Debt service (debt payments for required principal and interest payments) in the 2004 budget for the Town's General Fund was only $2,926. In 2005 it is $92,376 and in 2006 it will be about $40,000 higher. This debt service is for police vehicles which are replaced every 2 years, and for the debt that is covering up the budget deficits. Despite these financial shortfalls, the Town Supervisor still gets his new official car at a cost of $22,000 every 2 years! This and other instances of financial mismanagement have caused Moody's to reduce the Town's credit rating in 2003 to Baa1 [the lowest rating of any town in the county], citing weak internal controls in Town government, which means the town now pays even higher interest rates.

The slate of Gates Democratic candidates initially calls for the Gates Town Board to roll back all town elected officials' salaries to 1999 levels and eliminate the Supervisor's official car and cell phone which would save over $50,000. The Democratic slate will immediately implement the advice of the New York State Comptroller's office after they deliver their final audit. "Next, we will create a bipartisan Town Budget Review Committee of Gates residents to provide suggestions as how to reduce or eliminate the budget deficits. We will institute strong internal fiscal controls and implement town employees' suggestions for ways that town costs can be reduced." stated Sue Swanton, Democratic candidate for Town Supervisor.

There are some things worse than 'Tax and Spend' and one of them is 'Borrow, Tax and Spend' which is the legacy of the present town administration. The Town Board is mortgaging our children's future with their ever increasing debt. It is time for the voters to exercise their choice for the leadership of this Town. The choice is clear: expect more debt, more taxes and more spending from the current supervisor and board or elect a team that advocates belt-tightening at the top and a fresh approach to protecting the investment residents have in their town services.

Town of Gates Debt
Details of Town of Gates Debt (based on Eldridge, Fox & Porretti audits)