Village reacts to state’s fiscal warning

Village of Valley Stream officials are in the process of crafting a budget that will reverse spending trends, they said, that resulted in the village being designated as “susceptible” to fiscal stress by state Comptroller Thomas DiNapoli earlier this month.

“It’s something that we’ve discussed the past three or four budget processes,” said Treasurer Michael Fox, adding that the designation did not come as a surprise. This is the first year that Valley Stream made the comptroller’s fiscal stress list, which categorizes municipalities and school districts as having “susceptible,” “moderate” or “significant” levels of stress.

The village was added to the list as villages around the state were removed from it, including several on Long Island, but Mayor Ed Fare said that is partly due to the fact that the village has opted to use its reserve fund to cover costs like snow removal, road repairs and unfunded state mandates rather than bond for them. “It’s like using the cash in our pocket instead of our credit card,” Fare said.

It’s time to change that pattern, though, Fox said, and that’s something the board of trustees has planned for. He attributed 75 percent of the village’s use of reserves to expenses related to the harsh winters of the past few years.

Trustee Vincent Grasso said he had opposed using reserves in recent years, but had changed his mind in hindsight. “I’ve always hated using cash reserves,” he said. “That was a debate we had and I lost, and it’s probably better that I lost.”

Grasso cited the compounding of tax increases and the stress they would have placed on residents when the economic downturn was more pronounced. At a board work session on March 7, Grasso asked John Mastromarino, a financial consultant for the village, if being on the stress list and the village’s plans to use bonding could lead to a downgraded bond rating, which would increase the cost of borrowing money.