McGintee mess


With the remarkable success of the Community Preservation Fund in the five East End towns, there has been a temptation in some corners to view CPF money as a slush fund of sorts, with officials finding creative ways to spend those piles of cash just lying around, waiting for a land purchase. ?But nothing comes close to what East Hampton Town Supervisor Bill McGintee has done throughout his time in office. As the smoke began to clear last week, it became evident that he has used the CPF the way a homeowner uses a savings account, taking money out to pay bills when things are tight, then repaying it as soon as possible when the payroll check clears. ?Sort through all the related issues—a convenient interpretation of CPF rules to justify raiding the fund for general spending, a pending state audit, ledgers so incomprehensible that they might as well be written in hieroglyphs, fiscal reports with “missing” pages, and now a grand jury sifting the mess—and it’s clear that Town Hall is a financial quagmire, and that’s largely due to the supervisor. ?Mr. McGintee’s explanations for his actions have so far been merely self-serving, and, charitably, his judgment appears to be in question. Put simply, the supervisor appears to have faced ongoing fiscal challenges and, rather than significantly raising taxes or cutting spending, he opted to rely on wads of CPF money for cash flow until the funds came in to put the books back in order. ?One problem: The CPF is a dedicated fund, and ethical practice dictates that those funds are untouchable. “Borrowing” from the fund and paying it back later is tempting, and Mr. McGintee even offers an appealing argument that it saves the costs of borrowing. But CPF revenue is not general tax revenue, and it should never be used that way. Town law seems clear on the subject: “In no event shall monies deposited in the fund be transferred to any other account.” The supervisor is playing semantics with that, suggesting that “transfers” are not the same as borrowing temporarily, but that seems specious. The sentence could not be clearer.?At the same time, Mr. McGintee created his own twisted financial system, designed to establish a pipeline from the CPF to the general fund. Dating back to 2005, the supervisor appears to have misread the provision that 10 percent of CPF revenues can be used for management and stewardship, and instead simply had the CPF pay 10 percent of the cost of doing business in various areas of town government—including his office, the budget office, and all of the town’s insurance bills. He even had the fund pay for 100 percent of Councilman Job Potter’s salary in 2005, suggesting that Mr. Potter did nothing but work on CPF for the entire year.?It’s clear that, to Mr. McGintee, the CPF provided a ready supply of cash at a time when the town needed it most. Why did it need it? As the financial picture grew gloomier, the town enacted only modest tax increases, while spending soared, and dozens of new positions were added to the payroll. Mr. McGintee blames the town’s fiscal crisis on his predecessor, Jay Schneiderman, and former budget officer Len Bernard. But Mr. McGintee’s own evidence shows that while Mr. Schneiderman might have been guilty of trying to paint a brighter fiscal picture in his last year while Mr. Bernard was running for supervisor, the real crisis came during Mr. McGintee’s administration, when politically difficult decisions were dodged. ?The other members of the Town Board should not be let off the hook. They point fingers at the supervisor and accuse him of keeping the town’s finances to himself, bullying them if they pried. But the entire board is responsible for the town’s finances, and if Mr. McGintee can be blamed for keeping everything under cover, the rest of the board should explain why none of them thought it appropriate to peek underneath.?Nor should Ted Hults be excused. The town budget officer, who appears to have been a willing participant in Mr. McGintee’s financial shell game, needs to remember whom he truly works for—hint: it’s not the supervisor, nor even the Town Board. He should not be scapegoated, but neither should he escape judgment.?The town will look to state auditors for advice, but there are a few steps that should be taken immediately. The CPF should be declared off limits. Town officials need to stop thinking about Election Day and start thinking about the town’s long-term financial health. And the town needs to stop running things as though Town Hall were a lemonade stand, with all proceeds shoved into a cigar box, and nickels and dimes pulled out to buy sugar and lemons. Town Hall is not a lemonade stand, and there’s a lot more than small change at stake.

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