Glen Cove’s independent auditor delivered a “clean” opinion on the city’s 2024 financial statements this week, as officials touted a hard-won turnaround in the general fund, while critics cautioned that long-term obligations and borrowing still cast a long shadow.
The 117-page report, by PKF O’Connor Davies — presented in a 10-minute briefing at Tuesday’s pre-council meeting — shows that the city ended 2024 with a modest unassigned surplus in its main operating fund even as its government-wide net position remained deeply negative, largely due to retiree benefit liabilities.
“We are satisfied the results of the scope of our audit were sufficient to enable us to express our opinion on these financial statements, Lawrence Feldman, O’Connor Davies’ audit director, said. “And we’ve issued what we call a clean opinion. This is the best opinion that we can issue.”
Feldman walked officials through general fund results, noting that the total fund balance rose from $3.9 million to $4.7 million, and that the city’s unassigned balance swung from a $362,000 deficit in 2023 to an $87,556 surplus in 2024. “There was an increase in the unassigned balance of $449,000, and that is a very positive statement to be able to make,” Feldman said.
Mayor Pamela Panzenbeck highlighted the point in an exchange with Feldman. “So, just to clarify, the $87,556 unassigned fund balance in the general fund, which is our operating fund, is an actual and true surplus?” she asked.
“That is a surplus,” Feldman replied.
Panzenbeck emphasized that long-term liabilities — $207 million in total on the schedule, and $195.8 million due beyond one year — “has nothing to do with the $87,556 operating surplus.”
Feldman agreed: “That is correct.”
In emails to the Herald, City Controller Michael Piccirillo framed the result in budget terms. He pointed to audited schedules showing 2024 general fund actual revenue of about $54.5 million, expenditures of roughly $49.1 million and $4.8 million in transfers — “which translates to an operating surplus for 2024 of $636,499.” He added that 2022 and 2023 also saw operating surpluses, producing “collectively $3.6 million” in gains that helped move the unassigned balance to a positive $88,000 (rounded) by year-end 2024.
“Anyone who tries to tell you differently doesn’t understand municipal accounting, and is attempting to mislead you,” Panzenbeck said in a statement relayed by Piccirillo, adding that both the independent audit and Moody’s credit analysis validate the city’s budgeting practices.
Not everyone, however, was convinced that the headline should be “surplus.” Councilwoman Marsha Silverman, who is challenging Panzenbeck in the mayor’s race, welcomed the financial improvements, but questioned what the audit itself chose to emphasize. “If that’s the main finding, why didn’t they write it in the summary?” Silverman asked. “In the summary, it doesn’t even mention ‘surplus.’”
Silverman’s broader worry is sustainability: public safety and health insurance ran over budget, termination payouts can outstrip appropriations, and the city’s greatest pressures — retiree health care and other long-term obligations — remain substantial. “We might not have borrowed yet, but we will be borrowing for it,” she said of separation costs, noting that budgets in recent years have not always covered actual retirements.
Philip Pidot, a forensic accountant and a former Finance Committee chair, who ran for City Council in 2015 as a Republican, warned that residents can be misled if they confuse operating results with debt-funded inflows elsewhere on the books. “That’s sort of the sleight of hand. The amount of new debt you take on should not be considered revenue,” Pidot said, likening it to running up charges on a credit card and then counting the new credit line as income. “Currently we’re not making enough to cover spending,” he argued, pointing to an increase in long-term liabilities and a deterioration in net position as signs of structural strain.
Anthony Basile, a professor of accounting at Hofstra University, said it’s important for taxpayers to understand that both narratives — surplus and deficit — can be accurate at the same time.
“From an operating perspective, yes, there is a surplus,” Basile said. “The city’s general fund shows that it brought in more money than it spent in 2024, and it now has a small unassigned balance, which is significant for day-to-day operations and cash flow.”
But, he cautioned, that snapshot doesn’t tell the whole story. “When you look at the government-wide picture — which includes long-term obligations like pensions, retiree health benefits and other accrued liabilities — the city is still in a deficit position of roughly $52 million overall, with an unrestricted deficit closer to $148 million. Those two realities can coexist in municipal accounting, and they often do.”
The audit presentation shed light on what moved the 2024 numbers. Revenues came in about $824,000 above the final budget, aided by higher interest earnings, stronger rental income and sharply higher parking fines and court revenue. On the downside, “other tax items” were $1.2 million under budget, reflecting the absence of a Garvies Point payment in lieu of taxes.
Expenditures were roughly $1.1 million over the final budget, led by public safety (+$364,000, largely police) and employee benefits (+$633,000, mostly health insurance). A $1 million favorable variance in transfers out — driven by closing capital projects that reduced the need to move cash to debt service — helped produce the $788,693 increase in the general fund balance.
Piccirillo said that the city is pursuing grants, market-rate fees and leases and tighter expense management, and is drafting a formal fund balance policy to build reserves. Silverman and outside experts want transparency on borrowing versus cash usage, realistic budgeting for retirements and benefits, and a plan for long-term liabilities that doesn’t rely on one-time boosts like high interest income. For now, Glen Cove can fairly claim an operating surplus — modest but real — against a structural deficit that will require sustained discipline to tame.
