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NYS Comptroller

THOMAS P. DiNAPOLI

Audits of Local Governments and School Districts

City of Glen Cove – Budget Review (B7-12-17)


Released: October 18, 2012 -- [read complete report - pdf]

Purpose of Audit

The purpose of our budget review was to determine whether the significant revenue and expenditure projections in the City’s tentative budget for the 2013 fiscal year are reasonable.

Background

The City of Glen Cove, located in Nassau County, issued debt totaling $12.8 million to liquidate various fund deficits for the fiscal year ending December 31, 2006. Local Finance Law requires all local governments that have been authorized to issue obligations to fund operating deficits to submit their tentative budgets for the next fiscal year to the State Comptroller for review while the deficit obligations are outstanding.

Key Findings

  • The 2013 proposed budget contains significant financial risks that the City Council should consider when adopting the 2013 budget. The City has been authorized by the State Legislature and intends to finance several major operating expenditures, totaling as much as $6.8 million, with proceeds of long-term debt. As we have warned City officials in the past, such actions are not prudent. Debt service expenditures are a significant portion of the City’s operating expenditures.
  • Between 2012 and 2013, the City will be borrowing a total of $9.7 million to pay for current operating expenditures related to termination payments.
  • The City may have to borrow as much as $560,000 to pay certiorari settlements in 2013.
  • The City may experience a revenue shortfall in 2012 of $90,000 due to a decline in building permit fees.
  • The golf and recreation fund reported an unassigned fund balance deficit of $660,878 as of December 31, 2011.

Key Recommendations

  • Consider actions to slow or curtail the dependency on debt to finance recurring operating costs.
  • Consider funding an Employee Benefit Accrued Liability Reserve Fund in accordance with General Municipal Law Section 6-p to pay for future employee termination payments.
  • Treat tax certiorari costs as routine expenditures and pay them from annual appropriations.
  • Consider adjusting the budgeted amount for building permit fees.
  • Develop and implement a financial plan that provides for a self-sufficient golf course operation and the gradual elimination of the fund deficit.

Local Government and School Accountability Contact Information:

Phone: (518) 474-4037; Email: localgov@osc.state.ny.us
Address: Office of the State Comptroller, Division of Local Government and School Accountability
110 State Street, 12th Floor; Albany, NY 12236