Transparently Correcting Previous Over-expenditures and Closing 2005 Books

AUGUST 22, 2006, FARMINGVILLE, NY– As part of the Foley Team’s continuing effort to clean up the fiscal mismanagement of Brookhaven Town, the Town Board is tonight considering a resolution to modify and correct the 2005 Adopted Budget, a line-item budget that had little real meaning because of over-expenditures made in 2005.

The budget modification corrects the over expenditure of over 200 line items in the 2005 budget, totaling over $10 million in overspent lines. The budget modification resolution will transfer $10, 357, 652 into over-expended lines from line-items with available funds.

“The mismanagement of the 2005 Adopted Budget represents a fundamental breach of trust with the taxpayers of Brookhaven,” said Supervisor Foley.  “A budget is a contract between the people and their government, a public trust that details how taxpayer dollars will be spent.  Tonight we are taking a major step in restoring that public trust and patching the over-expended budgets we inherited.  We’re keeping our promise to save taxpayer dollars and bring accountability through responsible and transparent fiscal management.  With the adoption of this budget modification, we are moving from decades of budgetary gimmicks to a new era of fiscal transparency, open government, and honest budgeting.”

The 2005 Adopted Budget represented the first time the Town utilized a line-item budget, a generally accepted good government practice, which was mismanaged from the moment of its adoption:

• Of the 906 line-items in the 2005 Budget, 214 lines – representing nearly a quarter of the entire budget - were over-expended.  The top fifty over-expended lines alone represent $9.7 million.
• Among the over-spent lines were over $900,000 for general liability insurance, nearly $600,000 for employee health insurance benefits, nearly $200,000 in workers compensation fees, and other easily foreseen fixed costs.
• In addition to overspending individual lines, the prior administration overspent the entire Adopted Budget by approximately $3.5 million. This over-expenditure represents a continuation of past trends: Adopted Budgets over the last three years do not properly reflect expected expenditures and revenues.  Expenditures are routinely under-budgeted and while some revenues are over-inflated, the adopted budget for one of the Town’s largest revenue sources (mortgage tax) has been excessively under-estimated.

“We are taking a pro-active approach to managing the budget to reflect our belief that government should live within its budget and so that Brookhaven residents know exactly how their money is spent,” said Supervisor Foley.

Honest budgeting is about showing expenditures where they occur.  When it is clear that a certain budget line is over-expended each year, the next year’s adopted budget should be funded at the necessary level unless significant changes are made to change the way funds will be expended for those lines.

By retroactively correcting the mismanagement of the 2005 Budget, the Foley Administration will be able to close the books on fiscal year 2005, shifting the focus to resolving problems with the 2006 budget that the administration inherited, and crafting an open, honest, and responsible 2007 Operating and Capital Budget.

For Complete 2005 Budget Modification Resolution

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Office of the Supervisor
One Independence Hill • Farmingville • NY 11738 • Phone (631) 451-6955 • Fax (631) 451-6677
http://www.brookhaven.org/