Dan's Papers - April 3, 2009 - Southampton 'Error'

In the suddenly complex world of Suffolk County towns' budgets comes news that, so far, the Town of Southampton has a $4.9 million capital reserve hole, possibly resulting from overspending, mismanagement or bad accounting - but most likely all three. This comes on the heels of official state audits putting the Town of East Hampton's 2008 budget deficit at $9.5 million. Some Republican party officials, spokespeople and their friends in the media destroyed East Hampton Town Supervisor William McGintee's reputation as a public servant over this, but seem to be silent in their opinions of both Southampton Town Supervisor Linda Kabot's conduct as well as that of her predecessor, Patrick Heaney. Both Kabot and Heaney are Republicans.

Now phrases like "a problem" are used instead of words like fraud, incompetence or mismanagement. The truth is, the economic downturn is causing big problems for many small towns. Gordon Herr, chairman of The Southampton Town Democratic Committee, commented on the Southampton situation by saying, "I think that most people would agree that the responsibility for the fiscal crisis lies squarely with the current and previous administrations, which have consistently appointed under-qualified and often unqualified people to the Boards and have hired managers who have been clearly lacking in any kind of financial, management or budgeting skills or qualifications. The Town is painting the chain of events as 'human error.'"

Kabot was reportedly "shocked and dismayed" about the situation, stating, "I'm disappointed that we weren't told about this earlier when [former Comptroller Charlene Kagel] had advance knowledge." Kabot has indicated that the new situation will lead to more lay-offs and budget cuts beyond what she had originally planned. In fact, if the "hole" due to the accounting error is closer to the $6.2 million figure that has also been reported, cuts and lay-offs will be deeper.

Some people believe this is just the beginning of similar problems bound to arise all over the country, where growth and good times hid such mistakes in the past. Some knowledgeable insiders think the situation may evolve like that in East Hampton, where the Town Supervisor is being forced out by his own party as a result of the budget deficit situation. The same thing may happen in Southampton. Kerr, focusing only Southampton, said, "I believe that most residents of Southampton Town (Democrats, Republicans, Independents and unaffiliated voters) feel that change is necessary in town government."

Kabot has revealed to the media that she knows she's under the gun to produce. But will she have enough time to recover? Or worse, will this problem grow as auditors dig deeper?

There was a period when McGintee believed he had enough time to work his way out of his "hole," but now even he knows he probably doesn't. The obviously partisan Dem leader Herr sees it differently.

"The problem has been compounded by an absence of transparency in reporting, or even worse, completely ignoring the need for being fiscally responsible, not only to the Town Board, but more importantly to the residents of Southampton Town," he wrote in an email to this reporter. "This was made blatantly obvious last summer, when then-Deputy Supervisor and Town Manager Richard Blowes made this alarming and astounding statement: 'We're going to also start looking at monthly budgets to help us better monitor the town's financial health.' Quite amazing! Of course, the fact that it's taken the Town nine years and hundreds of thousands of dollars to try and implement a software program that addresses some of these budget issues is, in my mind, a further indication of what's wrong at Town Hall."

There is some truth that Kabot inherited most of this problem, but in fact, the Republican stronghold on the Supervisor's office in the Town of Southampton may be in jeopardy because of this situation. Herr stated boldly, "One-party-rule in Southampton Town has not worked and has driven the Town to the brink of disaster - we need to make major changes in Town government and I feel that the voters will respond accordingly in November."

What about the Democrats on the Town Board? Herr is, not surprisingly, more positive and forgiving in his comments.

"I believe that neither Anna Throne-Holst nor Sally Pope bear any responsibility for the current financial crisis," he said. "From her first day on the Board, Anna has been critical of the management style and absence of transparency and oversight. She has diligently tried to make progressive, positive changes. Sally Pope has been speaking out about the fiscal mess even before she was elected. In fact, she was the first person to call for a State audit and was the councilperson responsible for the resolution, which finally authorized the Town to bring in the State auditors. Anna and Sally have been persistent and consistent in their opposition to 'business as usual.'"