Town officials are saying that over the past week, they’ve filled a $1.6 million budget hole and solved the budget crisis, though filling that gap will rely heavily on one-time revenue sources that may or may not materialize.
The potential additional revenue means the budget Supervisor Sean Walter will release Tuesday is likely to include a 1.39 percent decrease in spending; along with a 2.08 percent increase in the tax levy and a 2.09 percent increase in the tax rate.
The budget falls within the guidelines of the state’s two percent tax cap law because it qualifies for exemptions pertaining to increased assessed value, according to town finance administrator Bill Rothaar.
In August, town leaders forecast an operating deficit in the town’s general fund budget of about $4.5 million, which would have taken about a 12.5 percent tax increase or 60 layoffs to fill. Since then, Town Board members have agreed to a number of measures that could reduce the deficit to about $1.6 million, including retirement incentives, using money from cars stored at EPCAL after Superstorm Sandy, and other options.
Mr. Rothaar warned that the budget does contain several “one shot” revenue items, meaning the town will need to find other ways to fill deficits in ensuing years.
The town’s general fund is one of several funds the town operates, including the highway department budget, the town lighting district, and the town’s sewer districts.
Mr. Walter announced last week that he would plan on using expected land sales at EPCAL in his budget for 2015.
The new potential revenues include:
• About $700,000 in anticipated revenue from the lease of town property at the Enterprise Park at Calverton to two companies that want to build solar energy panels on town-owned land there. These leases would be within the 95-acre area the town has set aside in the southwest corner of EPCAL as an “energy park.” The $700,000 is the amount for just one year. The potential for solar fields at EPCAL comes through a request for proposals issued by LIPA and as such, will need to be selected by LIPA and PSEG, which will not make those selections until December. The town has not identified the companies.
• About $613,000 that’s left in a Suffolk County fund from the 1990s that is being used for open space purchases and landfill closing costs. Supervisor Sean Walter said the fund was originally intended for landfill closing costs.
“We’re not really positive that we’re entitled to it, but we think we are.”
He said the county attorney is looking into whether the town can access the funds, but he said the town’s attorneys are “pretty confident” it can.
• An additional $178,555 in sales tax revenue from the county for use in the police department, which is part of the general fund. Mr. Walter credited County Executive Steve Bellone and South Fork Legislator Jay Schneiderman (I-Montauk), which is the deputy presiding officer of the county Legislature, with getting the funds.
“The county executive has been sympathetic to our needs,” Mr. Walter said.
• An additional $50,000 in money from a settlement involving a lawsuit filed against the town in 2004 by the promoters of the planned Field Day Festival. That was a proposed two-day music festival at EPCAL that never happened because the county to issue a mass gathering permit. The concert, which would have featured acts such as the Beastie Boys, Beck and Radiohead, eventually moved to Giants Stadium in New Jersey.
According to town finance administrator Bill Rothaar, these additional revenues would leave the budget about $43,000 short. There are 13 fewer positions due to retirements, and the $43,000 difference would have to be made up by spending cuts or additional revenues.
The town also got word on Thursday that the payment in lieu of taxes from S Power Solar, a solar energy company planning to put 30,000 solar panels on 45 acres off Edwards Avenue in Calverton, can be “front loaded” so that the bulk of four years worth of PILOT payments could be received in 2015.
This amounts to about $1 million, with the town getting about $300,000 and the Riverhead School District and Riverhead Fire District getting the rest. This deal is not finalized yet and this revenue is not included in the proposed 2015 budget, according to Mr. Rothaar.
The Town Board is planning to hold a special meeting next Thursday to finalize the agreement with S Power, Mr. Walter said.
S Power Solar already has an agreement with LIPA, and as such, does not need to wait until December to see if they are selected by the energy company, Mr. Walter said.
After hearing about the cost savings measures, Councilman Jim Wooten said, “I can’t wait until next week.”
By law, the supervisor must release what’s known as the tentative budget by the end of the business day on Sept. 30. The board must then adopt a preliminary budget, which will be the subject of a public hearing. Finally, the full board must adopt a final budget by Nov. 20.
If the board fails to agree on any changes prior to Nov. 20, the supervisor’s budget goes into effect automatically.