To the editor:
There has been a lot of debate about the fiscal position of the Village of Pelham Manor as we head to the election, and I’m writing to draw attention to the difference between fiscal soundness and fiscal responsibility. Our village is fiscally sound, but recent missed opportunities have raised into question whether current leadership has shown the fiscal responsibility that it so frequently proclaims.
If we think about fiscal soundness, as in whether the village has money saved, we would all agree that the village is flush with cash, has no debt and can handle expenses in the normal course. The village takes our high taxes and saves them for a rainy day. I am not writing this letter to debate whether we should be doing that (although I look forward to some fresh thinking among the trustees on all issues, including this). However, being fiscally sound is just one part of fiscal responsibility.
The part of fiscal responsibility that I am concerned with is whether the village has the expertise and is forward-looking enough to be the steward of our funds. Using year end fiscal year 2022 and 2023 reported numbers, the village’s average cash balance for 2023 was $8.45 million. That’s a lot of cash. The village’s financials show that during that time, we made just $55,571 in interest on that huge cash balance. That’s an interest rate of 0.657%, during a year when basic cash management should have brought in at least a 3% return (without taking any material risk). This could have been done by utilizing the options available under the Village of Pelham Manor’s own investment policy, all of which are permitted by the New York State comptroller for municipal accounts. Correct management should have added more than $250,000 in interest to this cash balance. I do not know what happened that made the village miss out on the opportunity to take advantage of the current markets (lack of transparency on what’s happening with our cash is an issue for another letter), but it resulted in lost money in a year when the village could have used more. I am sure everyone has ideas of where we could have put an extra $250,000—unfortunately this inaction denied the village that option.
To me (and the state comptroller) fiscal responsibility includes maximizing value for the village when it’s available, especially when it’s available at little to no risk. It includes having big picture thinking to understand that if you’re going to take a unique financial position for a municipality and sit on a large cash balance with no debt, then you need to remember that such a unique position requires unique management. Despite their claims of fiscal responsibility, it would appear that a financial opportunity was missed by current leadership. As a result, we lost out on at least $250,000 that could have gone towards improving our community.
I am voting for Kate Pringle and Mark Cardwell in Tuesday’s election to bring some fresh thinking and oversight to these processes, with the hopes that we can maximize the village’s positions across the board.
Gregory Sherman
998 Prospect Ave.
Maurice Owen-Michaane • Mar 18, 2024 at 8:53 pm
I would like to take this opportunity to correct the record. The Village of Pelham Manor most certainly has its money in interest bearing accounts. These accounts are collateralized by a third party (protection beyond FDIC limits), as they contain taxpayer monies, and accordingly they do not yield the same rate of return as other types of investments. Many municipalities who participated in the NY CLASS program lost a lot of their taxpayers dollars, which has informed our decision making.
Adam Ilkowitz • Mar 19, 2024 at 12:18 pm
Please provide evidence for the statement: “Many municipalities who participated in the NY CLASS program lost a lot of their taxpayers dollars, which has informed our decision making.”
Andy Scott • Mar 19, 2024 at 1:11 pm
Maurice, I have looked into this in some detail – at best, you are thoroughly confused, but more likely you are intentionally misstating facts to undercut the letter writers point. I would be very curious to see a source to back up your statement that “Many municipalities who participated in the NY CLASS program lost a lot of their taxpayers dollars…” because conveniently, the NYCLASS fund publishes their historical performance (would include URL but not allowed here). As shown, the fund has positive returns for all periods since inception. And the website actually includes a handy calculator that shows the town would have earned $442,498 on its $8.45M of cash had it been invested in the fund over the past year! To make sure I wasn’t misinterpreting the historical performance, I spoke with a representative of the fund who stated that he was not aware of any municipalities that have incurred a loss of principal in the fund (if you have evidence to the contrary, you should call them to make them aware!).
Setting aside the performance of this specific fund and your misleading comments, its clear the current leadership could have done a far better job of managing the Village’s financials. Instead of deflecting criticisms, leadership should be looking at options to improve going forward.
Peter Bazeli • Mar 18, 2024 at 10:18 am
Thank you so much for highlighting this important topic. To many, it was a revelation that we were sitting on $8 million funded with unnecessary Village taxes, but it’s shameful that these funds were not even invested in line with best practices. Regardless of the outcome of the election, I am hopeful that the Village will introduce greater fiscal responsibility and transparency.