Follow the money? Not in Riverhead—but why not?

Riverhead Town’s budget process is broken.

The truth is, the process has been going downhill for a while. For a period of time during the Walter administration, the Town Board even shirked its statutory duty to adopt a budget, allowing the supervisor’s tentative budget to become the final budget “by default.”

But at least previous boards held public budget discussions — albeit sometimes very perfunctory ones. No more.

We didn’t hear a peep of conversation among board members about the 2023 budget until the four council members, in the 11th hour, pulled out six budget amendments that they had clearly already discussed among themselves and agreed upon.

That led the supervisor to accuse them of blindsiding her. We can see her point. And by adopting those amendments after the public hearing on the budget has the effect of blindsiding the public as well.

This isn’t how it’s supposed to be. In fact the budget process is spelled out by state law. The law says the supervisor’s tentative budget, together with any adopted amendments, becomes the preliminary budget. And that’s the budget on which a public hearing is held. Makes sense. If the board agrees in advance on amendments it plans to adopt after a public hearing, that’s something of a bait-and-switch.

The supervisor complained that the council members process lacked transparency, and we agree. However, we don’t agree that her own process was transparent because, as she said, she held private meetings with board members along the way. Transparency requires a process that’s open to public scrutiny — not one done via emails or text messages or individual meetings with board members.

The Town Board needs a reminder that the budget is a blueprint for how the board plans to spend the public’s money.

A transparent process would include, at the very least, public review by the supervisor, in an open meeting, of the budget’s components and how the numbers proposed in the tentative budget were arrived at.

A transparent process would include public discussion of department heads’ requests and where and why they were not fulfilled.

A transparent process would include a public discussion of where the town’s fund balances stand, and how they’ve gone up or down in the past year.

A transparent process would include public discussion of board members’ questions, concerns and suggestions for amendments.

In a transparent process, any budget amendments would be proposed and voted on prior to the date of the public hearing on the budget, so the public would have an opportunity to actually review the budget — including the adopted amendments — prior to commenting.

And the final budget, complete with the summary page, disclosing final numbers — including appropriations, percentage increases, tax levy and the tax rate per $1,000 of assessed valuation — would be publicly available on the town’s website before the budget vote. Instead, Riverhead residents had to ask to see this information the night of the vote, only to be told it would be made available after the vote.

In Riverhead, the supervisor didn’t even give a public presentation of her tentative budget, which required a 3.31% tax levy increase, piercing the state-mandated 2% tax cap. She filed her budget with the town clerk accompanied by a budget message that asserted, incredibly, “the expansion of the police and public safety departments represent over 122% of this tax increase.” We wonder: How can any expenditure represent more than 100% of a tax increase?

Even the very form of the budget in Riverhead is screwy. The document presented to the board and the public does not show the prior year’s actual revenues/expenditures in each budget line. It does not show actual amounts in the current year to date (typically, the end of the first half of the fiscal year.) To see that information, an inquisitive citizen — and any member of the Town Board, for that matter — must look at a second document, a “budget supplement.”

This is a relatively new thing. The advent of the need for a “budget supplement” occurred during the Jens-Smith administration, and the supplement was provided only after complaints about the lack of adequate information in the budget document. We were told by the financial administrator at the time that new software doesn’t produce a budget that displays all that information on one sheet of standard paper (which incidentally is printed in portrait mode, vertical orientation — unlike the budget supplement, which is in landscape mode, horizontal orientation.) Whatever program is used to create the “budget supplement” evidently has the capability to use the horizontal “landscape” orientation, which is curious. It strikes us that this dual-document system makes an already murky process even murkier.

One other thing that we find very troubling about the budget process in Riverhead is how the Town Board just accepts having to craft a budget every year without benefit of audited financial statements for the prior year. Every year, the audited financial statement and auditors’ report is filed long after the budget is adopted. So, when the board voted to approve the 2023 budget, it did not yet have the audited financial statement for 2021. Budgeting for next year without knowing the audited results of last year makes budgeting difficult, to say the least. It also begs the question: Why does it always take so long?

In the end, we’re left with a murky process that doesn’t disclose pertinent facts about the budget — which as adopted raises the townwide tax rate more than 4% and raises the townwide tax levy more than 4.5%.

The board doesn’t think the public deserves to know how we arrived at that bottom line — or why Riverhead is one of just three towns in Suffolk County that pierced the 2% tax cap this year.

There was no disclosure that the budget has money to fund 6% across-the-board tax increases for all town employees —until Council Member Ken Rothwell mentioned it when he voted “no” on the budget last week.

There was no disclosure of why or how the town’s total fund balance went from $14.7 million at the end of 2021 to a sum that now, according to the town financial administrator, “barely” covers the 15% required by the board’s adopted fund balance policy. That translates into a total fund balance of $9.1 million on a total operating budget of $60.3 million in 2022. Taking the financial administrator at his word about the fund balance “barely” covering the 15% minimum means the total fund balance was reduced by more than $5.6 million in 2022.*

Where did that much money go? Was it transferred to other budget lines? Was it otherwise allocated to expenditures expected to be covered by an upcoming bond issuance? Is it going to be applied to forthcoming employee wage increases, once the union contracts are signed?

The board apparently doesn’t think the public has a right to know the specifics of any of this. We beg to differ. We believe the lack of transparency by the supervisor and the rest of the Town Board violates the spirit, if not the letter, of the Open Meetings Law.

The public has a right to follow the money where public monies are concerned. The Town Board must open up the process, have public budget discussions, and fix Riverhead’s broken budget process.

It can be done.

Look no further than the Town of Southold to see an example of what a transparent budget process looks like. The Town Board had four separate public work sessions just to discuss their departments’ budget requests. Responsible budgeting is the Town Board’s primary duty. Unfortunately, in Riverhead, we have no assurance, that duty is being met.

*The financial administrator during the Nov. 15 Town Board meeting said our numbers were wrong. He said the fund balance policy requires the unassigned fund balance, not the total fund balance, to equal at least 15% of the operating budget. But the fund balance policy does in fact require the total fund balance to be at least 15% of the operating budget. Even the unassigned fund balance equals 21% of the 2023