Last Wednesday's Village of Mineola Board of Trustees meeting was contentious at times. The discussion mainly involved the village's financial position. It was revealed at a board meeting last month that the village closed the 2002-2003 fiscal year with a deficit in its General Fund of over $500,000. However, even with the negative fund balance in the General Fund, the village still maintained over $800,000 in its Capital Projects fund. The board, therefore, voted to transfer monies from Capital Projects into the General Fund and designate those monies to pay for debt service.

The work session at last Wednesday's board meeting immediately began with a discussion of the village finances. Trustee Fairgrieve said she was not going to approve bills and payroll, which is usually the first order of business at a board meeting since it enables the village to pay its employees and its bills, unless she was assured of receiving a monthly treasurer's report. Trustee Fairgrieve requested the report, she said, so that the village can be assured that the village will not close out any future fiscal years with deficits.

Mayor Jack M. Martins assured the board that the 2003-2004 budget, his first in office, is closely monitored and is fine. "Our budget right now is solid and I know it is," he said.

Regarding Trustee Fairgrieve not voting to approve bills and payroll, Mayor Martins said asking the village to come to a halt because of a problem of mismanagement in the 2002-2003 budget was unfortunate.

Trustee Fairgrieve later proposed the formation of a fact-finding committee to ascertain why the village closed out the 2002-2003 fiscal year with a deficit in its General Fund.

Mayor Martins also expressed his opinion that it is each elected official's obligation to be informed. He invited all of the trustees including Trustee Fairgrieve to ask questions and ask for information. The mayor then invited Trustee Fairgrieve to undertake a fact-finding mission of her own by visiting the accounting department, asking questions and requesting information.

Mayor Martins maintains that his administration is an open book to the members of the board and the public as he assured the board that no trustee would be denied information.

After discussions on the village finances, the village voted to transfer $536,634 of the $806,981 in Capital Project funds into the General Fund to plug the deficit and dedicate the money specifically to pay down the village's debt. The $806,981 was leftover money the village had borrowed for capital projects that the village is currently paying interest on.

Mayor Martins revealed that when the prior administration would borrow money for capital projects, it would borrow more than was needed. The belief of the mayor and Deputy Mayor Larry Werther is that the former mayor would use the extra money to supplement the General Fund, creating an illusion that the General Fund was operating at a surplus when, in fact, it would have been operating at a deficit had the money not been borrowed and then transferred into the General Fund.

Trustee Lou Santosus, who served as deputy mayor under former Mayor John P. Colbert, said in response that nobody on the former board over-bonded for any reason. Trustee Santosus said that when doing projects such as the library, it's difficult to determine what the costs will be. He pointed out that during the project to renovate the library, there were drainage problems, roof problems, structural problems and asbestos that were unexpected. "These things you can't foresee," he said.

Trustee Santosus said that nobody intentionally over-borrowed money to supplement the General Fund to give taxpayers the illusion that tax increases were being kept to a minimum.

Mayor Martins asked trustees Fairgrieve and Santosus whether the village had over-borrowed what was needed for projects and used it to pay down the village's debt over the years?

Trustees and Fairgrieve answered that the board had not. "There was no intention to pay debt service [with money that was borrowed]," Fairgrieve said.

In response, Mayor Martins said, "If there was no intention to pay debt service, it doesn't mean it didn't happen. You can tell me you didn't know about it. You can tell me you didn't intend to do it, but it happened. It is a fact that [borrowing more money than was needed for capital projects] was done on purpose so that [the board] could pay down debt over time."

In Mayor Martins' budget presentation earlier this year, it was pointed out that in the 2000-2001 budget, there was an interfund transfer from capital projects to the General Fund of $242,568 and in the 2001-2002 budget, there was an interfund transfer of $537,401 from capital projects into the General Fund.

Trustee Fairgrieve said the board did not over-borrow intentionally. The trustee said that when the board is approving funding for a project, you don't borrow what the architect for the project says. "There are other costs. If you do, you're going to get into trouble," she said.

Trustee Santosus took issue with what he feels is a negative and incorrect portrayal of the former administration. "You're painting a picture that the board members are corrupt. They are not corrupt," he said.

Mayor Martins said the hundreds of thousands of dollars that were borrowed over what the capital projects cost should never have been done and pointed out that, in some cases, money over-borrowed for certain projects such as the fire house was used in other areas. The mayor pointed out $500,000 of the $4.6 million that was borrowed for the firehouse was used to pay for renovation work at the community center.

In response, Trustee Santosus said, "These things were not done to deceive."

Trustee Santosus later said to Mayor Martins, "You are painting a bleak picture. You're painting a picture that the people on this board aren't doing the best they can for this community. Every person on this board is doing the best thing they can for this community. Let's do one thing. Let's say the people on the board are good people and they work for the taxpayers of this village and they have the taxpayers' interests at heart. You're giving the wrong impression to the folks in the village."

Was money over-borrowed to supplement the General Fund, keep tax increases at a minimum for a positive political image and pay for other projects or was it borrowed as contingency in case projects cost more than originally anticipated? The motive as to why the prior administration over-borrowed for projects is one that will be debated. However, the village did have over $800,000 in money borrowed for capital fund projects that was not used.

Trustee Fairgrieve asked why the transfer to the General Fund from the funds for Capital Projects was not done in April or May as it normally was. "The former mayor was able to know where it had to go and did it in April and May. Then we wouldn't have a deficit budget," she said.

Mayor Martins said he did not know there was a deficit in the 2002-2003 budget until an independent audit was completed last month. "I'm not happy with the fact that we had to wait until December to find out, but it doesn't change the fact that there was a deficit," he said.

In years past, money was transferred from capital projects into the General Fund. Last Wednesday, the board did make a transfer with a board resolution to bail out the General Fund.

Mayor Martins said there are now mechanisms in place where if budget lines go into the "red," he will be made aware. One of the reasons Mayor Martins believes the 2003-2004 budget will be fine is because he said in formulating the budget, a conservative approach to revenues was taken. "That's how a budget is supposed to work," he said.

Trustee Santosus said he was concerned that the 2003-2004 budget would "tank."

However, on some line items the village may spend more than was anticipated, but that can be made up by receiving more revenue in some areas than was anticipated, the mayor believes. "We're meeting our numbers this year. We weren't meeting our numbers last year," Mayor Martins said.

There will be two hearings at village hall on January 14. One will involve an application to legalize and maintain two storage containers at 460 Jericho Turnpike.

Another hearing will involve penalties for violations in the housing code.

The hearing for a Panera Bread eatery on Jericho Turnpike near Rockbottom has been postponed until next month because notices sent to surrounding homes had the wrong address for the proposal.

(Editor's Note: There will be more coverage of the January 7 board meeting in next week's issue of the Mineola American.)