Town records show that the Wilmorite corporation owes $73,113.50 to the Town of New Paltz taxpayers for costs incurred during the review of its application to construct the Park Point rental housing project on lands owned by the SUNY New Paltz Foundation.
While reviewing charges submitted to the town by independent consultants, I came across invoice #102882 dated March 20, 2014. It had been submitted by David Clouser & Associates to former Supervisor Susan Zimet, and included charges totalling $1,607.20, which appeared under the general heading of “Miscellaneous Town Engineering” for “Park Point Water & Sewer System Purchase Evaluation.” On it was a handwritten notation reading: “Escrow, Park Point.” Having served as a member and chair of the town Planning Board between 2006 and 2010, I knew that these charges should have been submitted to the Planning Board and paid out of escrow funds provided by Wilmorite. The escrow process is delineated in the Town Code and is designed to ensure that applicants pay the professional review costs incurred as part of their application. This section of the Town Code was adopted in 2008 at my urging when it became clear that thousands of dollars of consultant fees were being paid by the taxpayers rather than the applicants.
My next stop, therefore, was the Planning Board files to see if Clouser’s invoice had been transferred out of “Miscellaneous Town Engineering” and applied against the funds in the Wilmorite escrow account. It had not. Purchase order/voucher #14-00842, dated April 2, 2014 and signed by Zimet, shows that the invoice was paid on April 18, 2014 by Town of New Paltz check #17432. It was paid, therefore, by those of us in the community who paid town taxes in 2014.
But this was just the tip of the iceberg. In continuing my research, I came across a computer printout of the Planning Board’s escrow bookkeeping account established for the Park Point Housing project. The escrow bookkeeping system had been established to provide applicants and members of the town government and Planning Board with an accurate accounting of all deposits made and all consultant fees paid throughout the life of an application. As of this writing, Wilmorite’s escrow account is $73,113.50 in arrears. Apart from $287.50 paid to traffic engineers Creighton Manning Engineering, LLP, the entire deficit amount was paid to Clouser and attorney George Lithco. Why were these consultants permitted to continue working on an application when the balance in the applicant’s escrow account stood at zero, and where had all the money come from to pay them? The only place it could have come from is the Town of New Paltz General Fund, which gets its money from the taxpayers.
How this happened
New Paltz Town Law Chapter 140, Article IX addresses Planning and Zoning fees, and Section 140-60.1 is titled “Escrow account; professional review expenses.” Part A of this section states, “In connection with any application…the reviewing board may require an applicant to deposit an initial sum of money into an escrow account in advance of the review of the application.” Wilmorite’s account was opened on December 3, 2010 with a check for $4,500 received when the corporation filed its application for Park Point. The deposit was entered into the Planning Board’s bookkeeping system and credited to the Park Point account. For the next three-and-a-half years, the Planning Board secretary regularly billed Wilmorite for the reviewing work being carried out by the town’s consultants, Wilmorite paid the bills, and the account was kept current. In April 2014, however, Planning Board secretary Kelly O’Donnell noticed that Wilmorite had stopped paying. She contacted the corporation and was told by Linda Larson of the accounting department that payment was being held by Wilmorite’s legal counsel. O’Donnell immediately informed Planning Board chair Michael Calimano.
On May 22, 2014, O’Donnell e-mailed Calimano, Clouser and Lithco that “Wilmorite has not made a payment on their account since their March payment. They currently owe the town quite a large sum of money… Any ideas what we can do?” No one replied.
On July 18, 2014, O’Donnell sent an e-mail to Zimet, then Deputy Supervisor Jeff Logan and then Town Council members Jean Gallucci, Kevin Barry and Daniel Torres, with copies to Calimano and Lithco, informing them that Wilmorite had stopped replenishing its escrow account following the March 11, 2014 payment and that, “Since the consultants bill monthly, that would mean that the last payment they (Wilmorite) made was for early February bills.“ She reiterated the fact that Wilmorite’s legal counsel was “holding payment.”
Incredibly, despite being officially informed that Wilmorite had suspended making payments to its escrow account, Calimano kept the application review going, in direct violation of Town Law Section 140-60.1. In turn, Clouser and Lithco continued their review activities and continued to submit invoices to the town, which were promptly paid by vouchers signed by Zimet.
What is being done
I met with Supervisor Neil Bettez, who has only recently come to know of this situation, and he told me, “I’m mad about this, and taxpayers have a right to be mad.” He said he is looking into the details of how it could have occurred and at specific procedures to be put in place to prevent it from happening again. He told me he is taking steps to see if the town has a chance to recover the money from Wilmorite, although “a lawsuit could cost us more than we might collect.”
One crucial question is, how was approximately $73,000 paid out of the Town of New Paltz coffers in 2014 when the items making up this amount had never been accounted for in the annual budget? We have recently seen Town Comptroller Jean Gallucci require “budget modifications” for unanticipated expenditures of less than $100. Were equivalent periodic modifications made in 2014 when Gallucci and her fellow board members voted to approve the payment of vouchers comprising $73,000 in unbudgeted items?
I asked Bettez about this. He answered that, since the expenditures had been made in 2014, he would need some time to find out the answer but was taking immediate action to, as he put it, “… close the barn door and will tell the town comptroller that I’m not authorizing any more consultant payments if there are not sufficient funds available in escrow.” I contacted Calimano and Logan for their comment, but have received no response.
The most benign explanation of the problem our town faces with regard to Wilmorite’s debt is poor decision-making on the part of our government leaders or, worse, misfeasance or malfeasance in the use of the General Fund. New Paltz taxpayers deserve better than to have their taxes squandered in this way. We need answers, and we need to keep pushing until we get them. But the question is, does anybody really care?