Preet Bharara has done his job and indicted Supervisor St. Lawrence and Aaron Troodler for criminal bond fraud. And the SEC has done its job and indicted St. Lawrence, Aaron Troodler, Michael Klein and Nat Oberman for civil bond fraud. Unfortunately, these federal agencies have no authority over the conduct of ordinary affairs in Ramapo and cannot take responsibility for the cash emergency that is approaching.
Ramapo has essentially been operating as a Ponzi scheme for years. Millions of dollars of nonexistent account receivables are currently carried on our books, and it appears that St. Lawrence has illegally skimmed $12 million from the ambulance tax line in order to hide the red ink.
Every year Ramapo borrows money on a “temporary” basis using the false claim that its revenue is going up. It then converts this note into a new bond. We have to ask:
- Has this temporary loan been received? If it has not been received, is Ramapo going to be able to do this in fiscal 2016?
- Is Ramapo going to be able to issue a new bond? The SEC has asked the court to exclude the principal members of the St. Lawrence administration from any involvement in such a bond process. Will the court follow through with this request? Who will take responsibility for the issuing of a new bond? Given the current indictments and the revelation by the SEC that Ramapo has an accumulated deficit of $16 million that is not on our books, will Ramapo be able to issue this bond?
- Will Ramapo reinstate Melissa Reimer as the head of finance? (Readers may recall that she was suspended 3 years ago by St. Lawrence because she refused to cooperate with his financial manipulations. She currently has a multi-million dollar lawsuit against Ramapo, St. Lawrence and four other members of St. Lawrence’s administration.)
- Last summer, Ramapo had trouble paying its utility bills. The situation is going to be much worse very soon. When will the cash-flow crisis arrive?
If St. Lawrence and his town board had any integrity, it would be discussing our dire financial situation in public. Unfortunately, our town board has no integrity and will continue to do everything in its power to hide our current financial situation. Hard to believe, but Supervisor St. Lawrence and his boys still seem incapable of acting in an honest and transparent manner.
Are there accountants in our community willing to step forward and do a far more professional examination of the current situation than I can?
We should also ask what the office of the NYS Comptroller is going to do. While this office has no power to indict, and it cannot order our town board to do anything, it would be nice if it took a look at our situation and made appropriate recommendations.
Robert I. Rhodes, Chairman, Preserve Ramapo
It has been obvious to some of us that the Town has been broke for years.
The recent sell off of town-bought lands (as surplus) was necessitated by the need to kick the can down the road as budgets were continuously misleading or falsified. So too was the continuing allocation of administrative costs (i.e. central staff salaries) to various so-called special purpose funds. Some thought that this was to hide the absurdly high salaries which led the Town to have the highest absolute non-police salaries in the state (police salaries were, I think, number two in the state). But the real reason was to continue to raise total town taxes (general fund taxes plus special district taxes) to fund town operations in the face of the deficit. On one or two occasions these adjustments were actually fair to certain taxpayers but the bulk of the allocations were so absurd as to be outright dishonest. Lastly, the fact that the town was broke was made obvious to us all by the Town’s and the Ramapo Local Development Corporation’s need to sell off condominiums in the Elm Street “Affordable Housing” project some two or three at a time to wealthy investors – instead of to needy families. These sales also were made urgently, at below market rates, for one simple reason – the Town needed the funds to pay off its bonds and had no surplus available to wait until the housing could be sold (or, if necessary, rented) to families actually eligible for affordable housing.
Then the Town started to over-assess such new taxpayers as the Millennium pipeline. This gave the Town higher than fair tax revenue in the short term, until lawsuits could be settled reducing the actual amount paid and hiding this fact by moving these properties off of the tax rolls by making agreements for taxes on these properties to be paid as payments in lieu of taxes. All of these factors led many of us to realize that the Town was indeed broke for years and that our elected officials were actively engaged in hiding this fact from the public.
To me the greatest revelation from the Federal indictment was the fact that the Town had illegally taken funds from the Ambulance District with no intention of ever paying them back, let alone booking them and treating them as a loan as required by law. For a number of years, some of us have been tracking these outflows, cumulatively amounting to tens of millions of dollars. Ambulance District tax rates rose even as insurance payments flowed in to pay for the costs of paramedic services–the original reason for the creation of the Ambulance District. Most informed observers believed that these were immoral acts designed to reduce the Town general fund tax increases for political purposes. After all, who can object to seeing rising costs for emergency services paid for by tax increases from a political standpoint–the exact opposite reaction taxpayers would have to large increases in town general fund tax rates. Advocates were told by Town officials that Ambulance District taxes were raised by exactly the same property taxpayers and at the same rates as taxpayers paid into the town general fund and hence, we believed that the raiding of the Ambulance Districts’ surpluses was legal, even if immoral. We called for truth in budgeting and demanded that Ambulance District taxes go down and the taxes be rightly levied as part of the general fund.
Well, along comes Preet Bharara and his team of analysts to reveal that indeed the taxpayers for the District and the Town as a whole were not identical and that the Town was required to formally borrow these Ambulance District funds and pay them back every year with interest.
So indeed, the Town is broke and land sales such as for the proposed hotel and housing project in New Hempstead will still be needed to pay the Town’s bills. Much of the Town’s higher taxes are here to stay for many years as they are built into budgets to pay for the stadium, which is still losing money. Some of the bonds are back loaded so future taxpayers will still see some increases to the taxes needed to pay for these bonds. Woe to us all when the stadium and other capital projects age and begin to need expensive repairs.
In the end, thanks to the federal indictments, we can hope that town taxpayers will indeed rise up and elect new independent leaders who will start us on the path to fiscal recovery. The Town of Ramapo is filled with hard working residents who contribute to the Town’s dynamic economy. Our residents deserve honest budgeting, fair taxation and responsible, cost-efficient government that recognizes that the current astronomically high property taxes that we residents bear are unsustainable and contribute to a real decline in absolute property values. The changeover in Town government cannot come too soon.
Bruce Levine is a former Rockland County Legislator and Spring Valley Village Attorney