Experts warn Kent of tax hike in 2005

By MICHAEL RISINIT
THE JOURNAL NEWS
(Original publication: June 24, 2003)

Town property owners could face at least a 20 percent tax increase in 2005 after Kent's budget surplus is finally depleted, critics say.

That contention stems from a recently released report and presentation by the town's accounting firm, which faulted seven of Kent's bookkeeping methods, including its practice of applying portions of the surplus to the next year's budget. The report also reiterated similar, recent findings by the same firm and two reports by the state comptroller in the late 1990s.

The latest report comes as three-term Supervisor Annmarie Baisley, the town's chief financial officer, is running for re-election for the first time without the support of the Kent Republican Committee, and as town officials confront a possible $2 million overrun in building a new town hall, library and police station.

"Nothing's been fixed," said Town Councilman Joseph D'Ambrosio, the board's lone Democrat, who, with other party members, is predicting the 20 percent tax increase. "There's going to be no wiggle room at the end of 2004. No matter what budget we make, it's going to be hairy."

The one-time budget surplus of about $8.2 million has dropped to about $2 million, most of which is expected to be used for the town center and formulating next year's budget. The accounting firm said the Town Board needs to outline future plans for its surplus.

"Since it would not be fiscally responsible to merely apply amounts determined to be in excess of that level to the subsequent year's budget, we also suggest that a multiyear financial plan be prepared to assess the most judicious use of available funds," wrote Bennett, Kielson, Storch, DeSantis and Co. of White Plains.

While there is not a set level for how much extra money a town should retain, financial analysts frown on raising amounts greater than necessary to provide anticipated services.

Baisley, a former town accountant for Kent and a former auditor for Putnam County, said she wasn't concerned about the town's financial condition. The recent increase in home refinancing because of low mortgage interest rates, she said, will translate into at least an additional $300,000 in the town's coffers from the county's mortgage tax dividend. Any tax increase, Baisley said, will be driven by proposed salary increases for town employees that exceed the usual 3 percent and any increase in state-mandated retirement benefits.

"I don't feel that will happen," Baisley said of the forecasted tax increase in 2005.

The report also faulted the town for insufficient accounting software, unbalanced account ledgers, not tracking its capital projects' finances, not keeping a general ledger for each of its bank accounts and not maintaining a complete list of the town's assets. The document covered 2002. Earlier reports from the firm focused on the previous two years.

Recently installed accounting software, said Richard Quaglietta, Kent's Democratic Party chairman, has been the only bright spot.

"Otherwise, it's awful," said Quaglietta, who attended the accounting firm's presentation. "It's an out and out atrocity of mismanagement here."

Baisley disagreed with his assertion. The report, she said, was "very positive." Town Board members, she said, have been receiving monthly financial statements in an effort to better monitor the town's funds. Undocumented assets are being cataloged, she added, and the firm's other recommendations are being implemented.

Town Board members Lou Tartaro, who received the GOP's backing to run for supervisor, Kathy Doherty and Patricia Madigan didn't return telephone calls yesterday.

As for the new Town Hall, police station and library being built on land off Route 52, Baisley said the project wasn't overbudget. Voters in 2001 approved borrowing $5 million for the $6.9 million project. The rest was expected to come from grants and the sale of existing buildings.

"We don't have bids in yet," Baisley said. "We're just anticipating the high end."



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