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Wheatfield audit finds deficit is higher than projected

Auditor Tom Malecki describes the town's financial situation at the end of last year as the worst of any municipality he has examined.

Malecki, of the Cheektowaga auditing firm of Drescher & Malecki LLP, told Supervisor Robert B. Cliffe on Monday night that compared with any of the 15 or 16 municipalities in Niagara and Erie counties that have hired his services, "your fund balance deficit is the worst."

Malecki was responding to Cliffe's inquiry during a 40-minute public presentation to the Town Board about the fiscal picture left for the new town administration.

The town's financial condition has been the subject of controversy between the board and former Supervisor Timothy E. Demler, who have argued about the necessity of a highway tax that was imposed to plug a $640,000 deficit.

But Malecki's audit painted a worse picture for the town, showing a combined deficit of $721,498.

The amount consists of $422,412 in the highway fund, $78,377 in the general fund and $220,709 in the fire protection district.

"No one [of the municipalities the firm has audited] has a negative balance in the general and highway funds," Malecki told Cliffe.

His message was the same as the one he delivered last year in a report on the 2008 budget: Wheatfield has continued to spend more money than it is collecting.

His presentation showed that the town has had a budget deficit every year since 2005, when town officials should have set aside at least $550,000 in the general fund as a "rainy day fund" to handle unexpected emergencies.

In the report, the auditors said although governments can "experience unplanned operating deficits," recurring deficits such as what has been occurring in Wheatfield "are usually indicative of structurally imbalanced budgets and financial stress."

Malecki called some of the previous administration's financial maneuvers "improper" and "illegal."

He also said that the highway tax imposed this year "stopped the bleeding."

His comments supported the board's decision to add the levy of 82 cents per $1,000 of assessed property valuation because there was "no other way to balance the budget but through property tax." He added that the tax "won't go away."

Demler, who stood in the back of the auditorium throughout the presentation, defended his position by blaming several outside factors for the huge debt. He said a referendum in 2008 that increased retirement benefits for volunteer firefighters caused that deficit while spending $668,000 on the sewers for Wheatfield Heights added more debt.

Demler said he allowed "way too much spending by department heads" and "should have had better control," as well as "pursued other revenues." He added that "every program cut this year was fully funded last year."

Malecki told Demler, who now hosts a radio call-in show in Lockport, that he heard "a lot of words there, but let's look at the numbers." He said Demler allowed the budget to run consistently in the red.

"The bottom line is that for four to five years, expenses were up and revenues were down," he said. "That's what the board now has to address."

He told Demler that his use of capital project funds for operating costs was illegal under state law and never should have been allowed.

An audit of town finances conducted by the State Comptroller's Office is expected sometime next month.


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