Ellenville's village government will be forced to make some tough choices as the municipality's 2007-2008 operating budget, which runs from June to June, currently faces a deficit of about $240,000 from 2007's unpaid property taxes. The deficit has prompted the village board to enter into a tax anticipation note of $350,000 — a figure that encompasses all uncollected taxes dating back to 1997 — to cover this month's operating expenses that would have been paid, had the revenue been collected. The village is also looking at a $750,000 shortfall from anticipated property sales of village assets that have failed to sell as expected. The uncollected taxes account for funds the village's budget will operate on this coming year, while the $750,000 deficit represents revenue streams in years past that were expected but never materialized.

The dour financial outlook spurred the call for an emergency village meeting. According to Mayor Jeff Kaplan, the village's inability to recover unpaid taxes is partially because Ulster County is not obligated to enforce village tax-collection like it is for town and school taxes. In an effort to recover the lost revenue, the board is considering entering into an agreement with MTA Group, Inc., whose owners and operators, Steve and Robin DeCarlo, were on hand at Friday's emergency meeting to give a presentation detailing their collection methods.

The company would send out notices to delinquent owners of 120 parcels in the village — about 9% of the village's total parcels — warning them of property foreclosure within 30 days if they don't pay. The DeCarlos said this usually results in most owners making good on owed money, knowledge they say they have gained from collecting taxes for the Village of Liberty for four years. For those properties still owing taxes after 30 days, the MTA Group, whose payment is the penalty-fees from late taxes, will purchase the properties from the village by paying the owed tax moneys. However, after this week's village board meeting, Mayor Kaplan said that the village was going to attempt to recover unpaid taxes itself before deciding to hire MTA Group, Inc.

Village Treasurer Linda Polkoski doesn't think the collection agency is the right way to go, as the late tax fees represent another $75,000 the village will forfeit. Instead, she believes that trying to change the county's laws regarding the obligation to collect village taxes would be better in the long-run.

"There are only five counties in the state that do not enforce village taxes as well as the town and school," says Polkoski, who added that both Ulster and Sullivan are part of that group. "I believe that the onus should be on the state to change the law and make all counties and villages equal."

The additional $750,000 deficit stemming from the village's unsold properties, such as the corner parcel at Center and Market Streets and the Hunt Memorial building, will be mitigated by the sale of the former village hall property and the village's art collection which officials believe is valued at several hundreds of thousands of dollars, which the mayor called "excess property that we clearly do not need to run the village."

The Hunt Memorial building accounts for about $235,000 of the deficit, as it was contracted to sell at $110,000 in the 2004-2005 budget, and was then contracted again the following year at $125,000. The Center/Market corner parcel was expected to bring in $325,000 from its sale, and the village lost another $90,000 when they were forced to take over the rehabilitation of the Cedar Grove Apartments.

"Between the building next door and the art, basically this issue is a non-issue, because once those things are resolved, we're going to be more than even with our budgetary needs as far as getting out of the debt that the revenue deficit shows."

Currently, there are no pending offers for the former village hall. But Kaplan was adamant about the village's overall financial stability.

"This is not a cry of major concern of any kind, but it is our commitment as a board to reduce the village budget."

The rest of the deficit is attributed to flagging sales-tax and mortgage-tax collection.

In an effort to tighten the village's belt, Mayor Kaplan said at this week's board meeting that he was looking to reduce all village services, overtime, and training, and not to take on any new personnel. He also requested that all department heads take their budgets from the previous year, and to submit new budgets that are each 5% lower. The mayor himself has also taken a 10% decrease in pay, and left it up to each of the village trustees to follow a similar suit.

This seems to follow Polkoski's recipe for helping the village eliminate this problem, "There's only two ways you can reduce the deficit: collect more revenues or reduce spending. You have to collect more revenues than you spend."

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