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2020 Tentative Budget…I have some concerns Part 2

Let me start by answering what is a Debt Service Fund?

According to the NYS Comptroller:

“It is used to account for and report financial resources that are restricted or assigned to expenditures for the payment of principal and interest on long-term debt. Financial resources that are being accumulated for principal and interest maturing in future years also should be reported in this fund. Debt Service Funds are not required unless segregation of resources is legally mandated.”

The NYS Comptroller lists four (4) instances where this type fund is mandated. I won’t elaborate, but the town board should be asking if New Hartford is mandated to have this fund or is it merely a fund that Miscione desires.

I am confident in saying that it is not a fund that would be used “because the Town was recently changing to a new accounting software” and it was needed to “act as a “holding account” for monies received before the Town is able to make payments”. This is clearly a deception; the town board should clarify the reasoning behind creating a Debt Service Fund so that the board can be confident that the fund is needed and that proper accounting records are being kept.

Anyway, the next email I sent to Miscione was the evening of Wednesday, October 9:

        Here is my question regarding the Debt Service Fund:

        Where did the “extra” money in the Debt Service Fund appropriated to offset expenses in the 2020 budget come from?

        Take for example the Highway Part-town… $110,000 of money that was budgeted and collected from taxpayers in 2019 to pay BAN principal but was not used when the BAN was converted to a serial bond in March. I don’t like the fact that taxpayers were misled in the 2019 budget, but at this point, it is water over the dam so I can overlook not using the money for its intended purpose and earmarking the money to be used to pay down the 2020 serial bond debt instead of taxing residents. The Town Board authorized the transfer to the Debt Service Fund at the March 20, 2019 town board meeting.

        However, the 2020 Highway Part Town budget appropriations are being offset by $114, 883 from Debt Service DB5010. Where dd the extra $4,883 come from?

        Also, the General Part-town budget never had BAN principle appropriated in the 2019 budget yet the 2020 budget appropriates $1,550 to be used from the Debt Service Fund.

        Other funds show similar differences between the unused BAN principle budgeted in 2019 and the amount of money appropriated for 2020.

        So I researched the adopted board minutes and find that at the December 19, 2018 town board meeting, the Debt Service Fund was set up “because the Town was recently changing to a new accounting software” and a Debt Service Fund was set up by town board resolution No. 505 of 2018 to “act as a “holding account” for monies received before the Town is able to make payments” and the Town Attorney was to look into how to set up the account.

        Here is the problem, that is an improper use of a Debt Service Fund. I don’t know where the “extra” money came from that is now being used in the 2020 budget or how the town did the accounting because I didn’t find any town board resolutions which are a requirement of town law because we do not have a Town Comptroller. However, in the case of our town, there is no legal requirement to set up a Debt Service Fund to pay bonded debt and it appears that you don’t know enough about accounting to use that type of fund. The BAN principle could have just been left in each fund balance to be used in each budget until the money was expended.

        Perhaps you could help me understand by sending me a copy of the Debt Service Fund general ledger along with the associated individual fund accounting documentation that is required for the Debt Service Fund and a copy of the town board resolutions authorizing the Finance Office to make those transfers so I don’t have to submit a FOIL.

The next morning, Miscione responded in an email:

        Will do

I assumed that he meant he would provide the requested information to me. However, the more I thought about it, the more his response reminded me of the many times I used to tell my children to clean up their rooms…“Yeah, Mom,, we will” only to visit their room a short time later to find that nothing had been accomplished.

So, on Friday morning, October 11, 2019, I decided to send a FOIL request to the town clerk:

Gail, I would like to FOIL the following:

1. The General Ledger account for the Debt Service Fund from the date of its creation to today’s date of October 11, 2019.

2. A Debt Service Fund (V account) requires that subsidiary records must be maintained. I would like a copy of all subsidiary records of the Debt Service Fund to include the individual funds being transferred from and the amounts transferred and/or expended from each fund since the fund’s creation.

3. I would like a copy of all adopted town board resolutions that were adopted in 2018 or 2019 authorizing the town supervisor or finance office to transfer money from any town’s fund balance accounts or 2019 town budget lines to the Debt Service Fund.

4. I would also like a copy of any 2018 adopted town board resolution(s) whereby the town supervisor or finance office was authorized to “assign 2018 Highway Part-town Fund; Police Fund; and Sewer Fund balances for subsequent year appropriations” as outlined on Page 10 of the 2018 Financial Statements prepared by Drescher & Malecki LLP.

Please send all records to me electronically. If any of these records do not exist, I would like certification to that fact.

Thank you.

A short time later, the town clerk acknowledged my FOIL request and said I can expect to receive the information by October 31, 2019.

I will post as soon as I receive the information, but perhaps the town board should ask some of these questions at Wednesday’s town board meeting.

As far as taxing residents to pay Bond Anticipation Note principle and then not using the tax dollars to pay down the debt PRIOR to converting the debt to a serial bond, that is another issue that the town board should be addressing.

Was the town board complicit in the plan to use the budgeted tax dollars for other than paying down Bond Anticipation Note principle when they unanimously adopted the 2019 budget in November 2018; a month before the Debt Service Fund was created? Does any member of the town board realize how much “EXTRA” town residents will pay to retire current debt because Miscione used creative accounting to try to “afford” the new town hall?

Everything I have noticed over the past three (3) years leads me to the conclusion that we may very well have insufficient funds to pay our debt in accordance to law without significant tax increases so creative accounting is becoming the norm to keep the “natives from getting restless”; I hope Miscione can prove me wrong.

The 2020 budget indicates that more bonding is in store for next year. These issues need to be resolved before we have another year like 2009 on our hands.

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2020 Tentative Budget…I have some concerns

Since I have limited time right now for fiddle faddle from the town supervisor…I will just put it out there for all to see; after all, sunshine is the best disinfectant!

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On October 8, 2019, I sent an email to the town supervisor:

Paul,

I just started to briefly review the 2020 budget. I believe you have some problems because you do not understand municipal fund accounting.

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Shortly after receiving my email, Paul wrote back:

           What are the concerns?


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The next day, October 9, 2019, I replied:

           For one thing, you have included $12,000 of drainage expense in General Wholetown for 2020. Drainage has to either be Gen. Parttown or Highway Parttown because both villages are separate MS4s and they are responsible for their own drainage work.

          While I am on the subject, I also listened to the last town board meeting where the lady in Whitetail wanted shrubs because trees were removed during the fix for the Spinella fiasco. You said that you could take the money from Parks contractual because they were both Gen. Wholetown. Actually, I believe the work for the project was to fix an overzealous Spinella job to fix a detention pond…a drainage issue. Therefore, the total cost of the work to fix the problem as well as the shrubs have to be paid out of either Gen. Part town or Part town Highway. Interestingly, not one person on the board, most of whom have many years of town board budget experience, corrected you because not one person on the board knows municipal accounting; it is even more questionable why Dreimiller didn’t know the difference. This is one of the reasons that Earle Reed’s tenure ended in disaster. Read the 2010 NYS Comptroller’s opinion.

          Which leads me to the reason why the Atty Gen. has opined that you cannot be Town Supervisor and in charge of the Parks Dept. You have total control over the Parks budget from start to finish so you are actually voting on your own budget! Do you think a Parks Director would have said nothing if you took money from their dept. to pay for a drainage expense?

          How many other expenses have been paid out of inappropriate accounts? I have seen a few as I peruse the monthly Supervisor reports which have not been put on line since July.

          Another issue that bothers me is the total lack of transparency with the Debt Service V fund monies. I do see “transfers from other funds” for the service fund in the monthly reports, but the reports do not specify what accounts/line items the money is coming from. Perhaps if the minutes were up to date, it might be easier to figure out where the money to fund the debt service fund (V fund) is coming from. Were there transfers during this year or last year? Are there transfer resolutions adopted by the board? Jim hasn’t brought home any copies of transfers made at the meetings. The only one I am aware of is the $110,000 for Highway Parttown done earlier this year…money that was supposed to pay down BAN principle.

          I also notice that although we thoroughly hashed the fact that the payment to the railroad was a Parks expense and not a Sewer Fund expenses; it appears that the same $2,600 is appropriated to pay the expense leaving you short because the bill last year was $3,850…or else…the Sewer Fund is still being used to pay this expense.

          As I said, I have only briefly looked at the budget; I have other questions that I will try to look at in the next few days.

          And don’t forget, Town Law 107 requires that fund balances to date and anticipated at year end, etc. are made part of the Preliminary Budget.

          Sorry to be a Debbie Downer, but “robbing Peter to pay Paul” really bugs the heck out of me.

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Later that day, Paul wrote back:

           I will review this and get back to you but the answer to the bushes for the retention pond I did not receive a receipt yet for it or a bill but when I did I was going to make a transfer and reallocate sales tax in the budget for it.

Really?

So you tell the board that you are going to pay for it from Parks contractual because it is a General Wholetown expense, but you were really going to make a transfer to General Part-town and use sales tax to offset the expense after you receive the bill? Hmmm, interesting…

Our back and forth emails continued and finally ended with a FOIL request being sent to the town clerk yesterday, October 11, 2019. My request was for all fairly current financial information yet the town clerk says I can expect to have the information by October 31, 2019. Amazing!

So the next town board meeting is October 16, this Wednesday. It is anticipated that the town board will discuss the 2020 Tentative Budget and possibly make changes and adopt the budget as the Preliminary Budget.

People who really know me, know that I am a “no bullshit kind of gal” so in the interest of time, I will just post the rest of our conversation and my FOIL request on the blog tomorrow. Maybe someone out there can wake up a few of the councilmen and alert them to read my blog tomorrow so that they can ask my questions at Wednesday’s town board meeting because, frankly, I am tired of dealing with the bullshit!

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Town Board Meeting Oct. 2, 2019 and 2020 Tentative Budget

Agenda for meeting2020 Tentative Budget

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LEGAL NOTICE – NOTICE OF PUBLIC HEARING

NOTICE IS HEREBY GIVEN that the Willowvale Fire. Co., Inc. located n Chadwicks, NY, will meet on Oct. 24, 2019 at 7:00 p.m. at the FIREHOUSE, for the purpose of holding a public hearing pursuant to the requirements of Section 147(f) of the Internal Rev…

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NOTICE OF PUBLIC HEARING – Cree, Inc.

NOTICE IS HEREBY GIVEN that a public hearing pursuant to Article 18-A of the New York State General Municipal Law, will be held by the Oneida County Industrial Development Agency (the “Agency”) on the 15th day of October 2019 at 10:00 AM, local time, at Marcy Municipal Building, 8801 Paul Becker Road, Town of Marcy, Oneida County, New York in connection with the following matters:

Economic Development Growth Enterprises Corporation, on behalf of itself and its principals (collectively, “EDGE”), and Cree, Inc., on behalf of itself and its principals (collectively, the “Company”), or an entity to be formed on behalf of any of the foregoing has applied to the Agency to enter into a transaction in which the Agency will assist in the (i) acquisition of a 55.25± acre parcel of land situate at Edic Road in the Town of Marcy, Oneida County, New York (the “Land”), (ii) construction on the Land of four buildings with 450,000± square feet of floor area consisting of (a) a three-story administrative building measuring 75,000± square feet; (b) a three-story, 300,000± square foot ballroom style wafer fabrication building with total cleanroom space measuring 100,000 – 135,000 square feet; (c) a HPM Warehouse, (d) a single-story Central Utilities Building measuring 70,000± square feet, and (e) all utilities and infrastructure to support the same (collectively, the “Improvements”); and (iii) acquisition and installation of furniture, fixtures and equipment in the Improvements (the “Equipment”), all for the purpose of providing a state of the art wafer fabrication plant to support the substantial growth of the Company in its target markets (the Land, the Improvements and the Equipment is referred to collectively as the “Facility” and the construction, renovation and equipping of the Improvements is referred to as the “Project”). The Facility will be initially operated by the Company.

The Agency contemplates it will provide financial assistance (i) to EDGE in the form of exemptions from mortgage recording taxes and (ii) to the Company in the form of exemptions from sales and use taxes on materials and/or equipment used or incorporated in the Facility, and payment of real property taxes for a period of 49 years consistent with the Agreement Approving PILOT Terms and Allocating PILOT Payments dated as of October 1, 2013 by and among the Agency, the County of Oneida, Whitesboro Central School District, the Town of Marcy, Maynard Fire District, Dunham Public Library and Economic Development Growth Enterprises Corporation, conditioned upon the Company maintaining certain employment levels at the Facility, which financial assistance represents a deviation from the Agency’s Uniform Tax Exemption Policy, to be more particularly described in a Final Authorizing Resolution to be adopted by the Agency.

A representative of the Agency will at the above-stated time and place hear and accept written comments from all persons with views in favor of or opposed to either the proposed financial assistance to the Company or the location or nature of the Facility. A copy of the Application for Financial Assistance filed by the Company with the Agency, including an analysis of the costs and benefits of the proposed Project, is available for public inspection at the offices of the Agency, 584 Phoenix Drive, Rome, New York.

ONEIDA COUNTY INDUSTRIAL DEVELOPMENT AGENCY

Dated: October 1, 2019             By:/s/ Shawna M. Papale, Executive Director

http://www.cmvh.org/documents/2209.pdf

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New Hartford Town Board Meeting – Sept. 18, 2019

Agenda for meeting (minus town supervisor items)

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