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Fiscal Stress

Mayor blasts state comptroller’s scoring of village

Huntington Bay Village’s mayor is contesting a fiscal rating by the state comptroller’s office. Photo by Victoria Espinoza

Huntington Bay Village’s mayor strongly disagrees with a recent release by the New York State Comptroller’s office ranking the municipality as susceptible to fiscal stress.

The comptroller’s office sent out a statement about the scores last week but Herb Morrow said  the score is misleading and Huntington Bay is in sound fiscal shape.

“The report is worthless because what they do is take a snapshot of one point in the year,” Morrow said in a phone interview. “They don’t take the financial planning into consideration.”

Morrow said the comptroller’s office ranked Huntington Bay as “susceptible” to fiscal stress in February because its reserve fund decreased.

“We did some major reconstruction of the police department to save taxpayers an enormous amount of money in the long term,” Morrow said. The reorganization included incentives and retirement costs that reduced reserve funds but, Morrow said, over time would reduce village payroll for police by $400,000.

“We are in great shape, and the residents are not listening to the comptroller’s story.”

Despite what Morrow said, the state comptroller’s office confirms Huntington Bay is susceptible to fiscal stress.

According to a statement from Comptroller Thomas P. DiNapoli’s office, “susceptible to fiscal stress” is the least severe of three categories that all municipalities found to be under fiscal stress were filed into. The other two category designations are “moderate fiscal stress” and “significant fiscal stress.”

In order to be designated as “susceptible to fiscal stress,” a municipality has to reach at least 45 percent of the total points of the fiscal stress score. The scores are made using annual financial reports that are submitted by local governments to the state comptroller’s office. Fiscal stress is usually defined as a local government’s inability to generate enough revenues within its current fiscal period to meet its costs. The comptroller’s system evaluates local governments based on both financial and environmental indicators.

The indicators of a local government’s financial state are its year-end balance, operating deficits, cash position, use of short-term debt and fixed costs. Environmental indicators include population, age, poverty, employment base and more. Fund balances, like Huntington Bay’s reserve fund balance, are used to identify the amount of money available to cushion revenue shortfalls or expenditure overruns.

According to DiNapoli’s office, a negative or low-level fund balance can affect the local government’s ability to provide services at current levels. It also claims that fund balance is a strong measure of the financial condition of a local government.

In a letter Morrow posted to the Huntington Bay website when the scores were originally released in February, he criticized the message that the comptroller’s office was sending to residents.

“It makes the jobs of local leaders harder. It is a waste of New York State taxpayer dollars,” Morrow said in the letter. “With no conversation or discussion with our village, we were given a negative designation that is very misleading to our residents. By releasing reports that create inane headlines, they confuse residents.”