ELLENVILLE – A quiet bomb exploded in Ellenville's Government Center at Monday night's municipal board meeting as it was discovered that the village's 2008-2009 budget had numbers flubbed back in April, leading to a sudden shortfall of a little over a hundred thousand dollars in interest payments on the budget's Bond Anticipation Note (BAN) and Statutory Installment Bond (SIB) expenditures.

The result was the village board authorizing the expenditure of its entire $75,000 contingency budget, leaving village government, in the words of Mayor Jeff Kaplan, "walking on eggshells" until the end of the fiscal year.

The budget line marked A9730.7 for the BAN interest payments read $11,856, when it should have read $110,856, while the line marked A9720.7 for the SIB interest payments read $1,555 when it should have read $14,555, resulting in a shortfall of $112,000.

"There's no way to sugar coat it," said Mayor Kaplan in a follow-up interview on Tuesday, the day after the meeting. "The information that was provided to the board by the village treasurer and the village manager had some erroneous numbers in it. The budget was established and based on expenses that did not really meet the interest expenses that we're going to have to pay. And as a result of that, it's eaten up our contingency."

The problem arose in the transposition of numbers from the tentative budget document to the documents used during the budget's public hearing back in April, said Village Manager Elliott Auerbach, who, during an interview on Tuesday, took responsibility for the error.

"I have to assume full blame for this, for not picking it up," said Auerbach. "I feel horrible. I have to say that I should've picked up on it."

According to Auerbach, this fiscal year's contingency budget was created from the money that was to have gone to paying the interest in the first place. As to where the remaining $37,000 will come from, Mayor Kaplan hopes that the falling prices of commodities and further spending cuts on the part of the village will help keep the budget in check until the new fiscal year on June 1, 2009.

"As a result of the national recession, the commodity prices have now significantly gone down," said Kaplan. "We based the cost of heating oil and gasoline at much higher prices than they are today. We're hopeful that will more than offset any difference. So really, what it comes down to is that we are going to have to tighten up discretionary spending at the village level, which isn't a bad thing."

"It is disappointing because we were hoping that as a result of tightening the belts and under-spending our budget, we would be able to really bite into the deficit, and now it looks like that deficit will probably stay where it is."

Despite the sudden shock of the crisis, both Kaplan and Auerbach agree that the problem is not without its solutions, and that the village should be able to weather this new squall.

"What's going to happen is we're going to continue to do what we have said that we were going to do, which is to look at how we can take out all of our debt," said Auerbach. "This is a crisis, but not of the magnitude that we've been bearing for the last year and a half to two years."

Auerbach also points out the role uncollected tax-dollars play in the village's budgetary woes.

"I'd like to fall back on the fact that, if we can collect our taxes, which is right now a little south of half a million [dollars], that would be a great thing."

Another sometimes-discussed solution to the problem could be the use of a portion of the estimated four million dollars the village has in savings from the sale of the mountain property, the use of which would have to go to public referendum and be voted on by village residents.

"Is it time to take a look at that?" asked Auerbach. "Do we step back and look at that municipally? I think that's a decision that the board has to make, but I believe that they're inclined to take it to the next step and to look into that."

When asked what, if any, disciplinary actions will be taken for the mistake, Kaplan said that the current priority is to managing the crisis at hand.

"I'd have to say that first we're trying to deal with the issue; then we'll deal with what the ramifications of it. We will have to talk about that as a board."

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