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Purpose

The purpose of our budget review was to determine whether the significant revenue and expenditure projections in the Town’s tentative budget for the 2022 fiscal year are reasonable.

Background

The Town of East Hampton, located in Suffolk County, is authorized to issue debt not to exceed $30 million to liquidate the accumulated deficit in the Town’s general fund as of December 31, 2007, December 31, 2008 and December 31, 2009. New York State Local Finance Law requires municipalities 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

• Based on the results of our review, we found that the significant revenue and expenditure projections in the tentative budget are reasonable.
• The Town appropriated a total of $249,556 for contingencies in the 2022 tentative budgets for the five funds examined (General Whole Town, General Part Town, Highway, Solid Waste/Recycling and Airport) as a cushion against unforeseen events. However, Town Law authorizes the Town to appropriate up to 10 percent of the total budget, or as much as $7,219,371 for the 2022 tentative budget.
• The Town’s 2022 tentative budget includes a proposed tax levy of $62,265,120.

Key Recommendations

• While the Town has not used contingency funds in the last two fiscal years, we recommend that the Town carefully consider how much it sets aside as a cushion against unforeseen events (e.g., the continued impact of COVID-19).
• The Town Board should be mindful of the legal requirement to maintain the tax levy increase to no more than the tax levy limit as permitted by law, unless it properly overrides the tax levy limit.