Island Park was in “significant fiscal stress” in 2020, a rating that officials from the state comptroller’s office said stems from the burden of a continuing recovery from Hurricane Sandy, which was only made worse by the coronavirus pandemic.
The village was one of three Nassau County municipalities facing significant fiscal stress, according to a report released by State Comptroller Thomas DiNapoli April 2. The comptroller had previously said the village was “susceptible to fiscal stress” in 2019.
“The Village of Island Park is still rebuilding, both figuratively and financially, from the devastating effect of Hurricane Sandy,” Mayor Michael McGinty said. “Village officials have been aggressive in grant opportunities and programs to provide assistance and, although successful, still wade through bureaucratic red tape. We have done our part to hold the line on taxes, remaining under the New York state tax cap, while still providing the programs and resources our neighbors expect.”
In addition to Island Park, the City of Long Beach and the Village of Valley Stream are also under significant fiscal stress, ac-cording to the state. They were among eight municipalities across New York whose fiscal years start between Feb. 28 and July 31 that were either under stress or susceptible to it. Di-Napoli’s office evaluated the fiscal health of 523 villages, most of which have fiscal years ending May 31.
“These local communities were already struggling with fiscal stress before the pandemic hit,” DiNapoli said in a news release. “Some of that pressure could be alleviated with federal stimulus funds and the restoration of state aid, but the full extent of the pandemic’s impact on local communities is unclear, and the fiscal landscape continues to change.”
The system, which has been in place since 2012, assesses levels of fiscal stress in local governments using financial indicators, including year-end fund balance, cash position, short-term cash-flow borrowing and patterns of operating deficits. It generates overall fiscal stress scores, which drive final classifications. The system also analyzes separate environmental indicators to help provide insight into the health of local economies and other challenges that might affect a local government’s or school district’s finances. The information includes population trends, poverty and unemployment.
DiNapoli’s office also has a self-assessment tool that enables local officials to calculate fiscal stress scores based on current and future financial assumptions. Officials can use the tool to assist in budget planning, which will continue to be critical amid the coronavirus pandemic, and the changes in revenue and expenditures brought on by it.
McGinty said Covid-19 has caused fiscal stress for residents, businesses and government officials in Island Park. He noted that the village saw a 70 percent decrease in parking revenue, a 59 percent fall in rental permits, a 72 percent drop in Building Department applications and a 65 percent plummet in local enforcement fees. He added that there was an increase in operating expenditures for the village’s Department of Public Works, beach and recreation, and the Island Park Fire Department, and officials had to privatize garbage collection temporarily because of a department-wide quarantine.
In a normal year, the village brings in about $300,000 in revenue from annual parking permits from Long Island Rail Road commuters, but with ridership bottoming out during the pandemic, it saw a sharp decrease because many commuters worked from home. When the Village Court ceased operations at the height of Covid-19, the village received nothing in revenue from code enforcement or parking tickets, when usually it nets about $15,000 to $20,000 annually, and without construction projects, building permit fees also dropped.
Despite the financial struggles, McGinty said, village officials have taken the necessary steps to eliminate non-discretionary spending and began working with auditors and financial advisers to take advantage of refinancing opportunities. He said he and the board would “continue to be aggressive” in pursuing grant opportunities, but added that the grants that they have applied for have a slow approval turnaround amid the pandemic.
McGinty said the village has taken advantage of refinancing opportunities in capital borrowing because interest rates are at historic lows.
“We will continue to make tough decisions without affecting the daily operations of the village,” he said. “Working together with the board of trustees, our revitalization continues for a renaissance with the best yet to come.”