ELLENVILLE – For village residents looking to have a direct impact on their municipality, you'll have your chance pretty soon. At this week's meeting of the board of trustees, representatives from village government discussed the process to draw money down from the $4.5 million fund gained from the 1997 sale of the Sam's Point Dwarf Pine Ridge Preserve to the Open Space Institute — informally referred to as the "Mountain Money" — in order to pay off the $1.1 million deficit the village as accrued over the last two years.

On the table that night was a local law which, if passed, would then mandate a public referendum to vote on whether or not to authorize the village to withdraw the money necessary to start the fiscal year out with a zero balance, rather than carry the deficit over to the next year. Doing so, said Village Treasurer Linda Polkoski, had contributed to the growth of the deficit, a factor coupled with the village's increased expenses and shrinking revenues.

Ordinarily, a law such as this requires a public hearing before being passed, but Village Attorney Phil Cataldi said that the mayor could issue a "message of public necessity." The public hearing would still be mandatory before the referendum were to take place, but Cataldi and Acting Village Manager Mary Sheeley said that passing the law as soon as possible would enable the village to hold the referendum that much sooner, providing adequate time to prepare an alternative plan for paying down the deficit in time for the new fiscal year, which begins on June 1.

How Did We Get Here? Many residents may remember that, around this time last year, the village called an emergency meeting to declare that they'd run out of cash. The problem, they cited, was a deficit which had grown over the last couple of years, and which they'd carried with them from budget to budget. At the time, the explanation proffered by then-Village Manager Elliott Auerbach (who, in November of 2008, was elected to the position of County Comptroller) was that the village had included the sales of several properties the municipality owned as revenues. The sales of these properties, such as the former village hall as well as the Hunt Memorial Building, had not gone through, with the former still awaiting a buyer, and the latter having the possibility of sale removed altogether because of its status as a historic landmark. These unsold properties, along with rising costs and expenses to run the village, created a deficit which grew each year to the $1.1 million figure before the board now.

"You could save up to a week or two weeks by acting tonight," said Cataldi. He said that the village could hold the vote 60 days after the law's approval. By the end of the discussion, however, Mayor Kaplan said that he didn't feel comfortable making such a move, and he and the board scheduled a public hearing for the following Monday, March 2.

"It's impossible to present a budget that is going to pay for your ongoing expenses when you start every year behind to the extent that we're behind. And you can't even build into your budget paying the deficit; you can only pay your deficit off of savings, surplus from your existing budget, which makes it literally impossible to catch up with the deficit," said Kaplan of the situation.

"We have got to go out and explain the deficit to the public, and explain why going to the well, so to speak, is going to resolve the problem and not just be a way to eliminate this deficit and not have another one next year. So I think it's very important for us to be able to say that if we started at an even keel, then we would be able to balance the budget. I don't know the answer to that question at this point, and I'm hoping the answer is we can do it. We're meeting with the heads of the different departments, and so far I'm not hearing anyone coming in with a zero budget to begin with."

When asked for comment, the present members of the village board agreed that the deficit needed to be eliminated, offering their views on how to move ahead, and what needed to be said to the taxpayers to gain approval for the fund withdrawal.

"We should just strictly go with the same budget that we had last year, nothing less, nothing more," said Trustee Francisco Oliveras. Mayor Kaplan pointed out that such a solution might be impractical if the previous year's budget had underestimated expenses.

Judging from the village's lack of available cash-flow this month, this appears to have been the case, a sentiment confirmed by Kaplan's call for reduced village government.

"We've got to be realistic about this. Two years ago we had a significant tax increase. Last year we had a tax increase…If you continue down the road we're going, the answer is we've got to somehow shrink the village, because the expenses of running it the way it is now is more than we're going to be able to maintain on a regular basis," said Mayor Kaplan.

Trustee Efrain Lopez stressed the need to be clear to taxpayers about the advantages of drawing down from the Mountain Money rather than borrowing the $1.1 million to cover the cost of the deficit. Manager Sheeley said that borrowing the money necessary to balance the budget would cost more to taxpayers years down the road, as the interest to pay the loan back would come out of their pockets. Time, too, played a role in her support of drawing down the money.

"The Mountain Money is Plan A, and that's probably the easier of the two, take the money, pay it off. But we do have Plan B. We can't at this point go out and borrow the money; we need permission to borrow the money. That's Plan B. But the state, they told us it's not going to be a priority with the legislature until they pass their own budget…but even if they give us permission, it's a long process to do that. We need to have a backup plan," said Sheeley.

When asked if, as a way to entice voters to approve the measure, the village board would consider taking out more to not only stabilize but lower taxes for the next fiscal year, Mayor Kaplan said that such an action would only offer a temporary reduction. Taxes, he said, would only go that much higher in the following year, in addition to whatever increases would be necessary to fund rising costs.

The public hearing to discuss the referendum will be in the first floor courtroom of the Village Government Center, Monday, March 2, 7 p.m.

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