East Hampton is still far from the bottom of capital budget questions

Recommend

Comment

Email this article

Print this article

Get news alerts

RSS Feeds

Share Digg Mixx Linked In Facebook Twitter Delicious

The newest chapter in East Hampton Town’s ongoing budget saga is unfolding in the office of former town budget officer Ted Hults, as forensic accountants hired last month by the town dig through several years’ worth of data on the town’s capital projects, searching for millions of dollars spent on building projects with no clear record of how those bills were ever paid.

Though the depth of the mess of the town’s capital accounts is not yet known, Town Board member Pat Mansir said this week that the money to buy the $890,000 former Accabonac Tennis Club property for use as an affordable housing complex was taken from the town’s Community Preservation Fund, despite the fact that the project was bonded for in 2007 as a capital project. She said that she is unsure whether the money was ever paid back to the CPF, which is a fund dedicated to land preservation that cannot be used for any other purpose. East Hampton’s use of CPF money has been under scrutiny since former Town Supervisor Bill McGintee came under fire last year after revealing that he had borrowed $8 million from the fund to cover shortfalls in the town’s operating budget.

Ms. Mansir also said that she is unsure how the town will now pay for several projects that she’s been working on at the town landfill, including a new roof for one building and repairs to cement floors that have metal reinforcing bars protruding from them. The town authorized a bond for $1.4 million for the improvements in August of 2008, but Ms. Mansir said that no one knows where much of the money is now.

The roof portion of the project, which cost $600,000, is finished, but Ms. Mansir said that the town has only paid about $339,000 in bills for that project.

“They can’t finish it,” she said of the project. “And I’m never gonna have it because I’m not gonna be here.” Ms. Mansir’s term ends at the end of December, and she did not seek reelection this year.

Ms. Mansir said that the town’s problems were made worse by its former accounting consultants, Albrecht, Viggiano, Zureck & Company, of Hauppauge, which encouraged the town to commingle its CPF and capital accounts.

Ms. Mansir said “2008 was the year of all the trouble. Some was bonded for, some was not bonded for. Some went into the general fund. That’s why we’ve run out of money.”

Though Town Comptroller Janet Verneuille did not respond to requests for comment for this story, Ms. Mansir’s accounts of the missing money were corroborated by others inside town government, who asked not to be identified.

“Everyone’s pretty hush-hush, but it should not be a secret,” said Ms. Mansir.

The accounting firm Nawrocki Smith of Melville was hired as the town’s outside auditor last year and has been working to untangle the capital accounts at a cost of $125,000. Nawrocki Smith was initially hired to complete the town’s 2007 outside audit after representatives of AVZ told the town that new accounting rules prohibited them from serving both as the town’s outside auditors and as their accounting consultants.

Since Nawrocki Smith began its forensic work, the town has frozen all capital project spending that had been proposed for 2009 that was not yet under contract. Only the historic Town Hall complex on the front lawn of the current Town Hall and the Green Hollow affordable housing project in Wainscott are proceeding. Members of the Town Board have said that they hope that the town will be able to borrow for the projects at a more favorable interest rate in six months if its bond rating improves after not taking on the additional debt this year.

“All the projects are on hold, but Accabonac is really on hold. We don’t know whether we ever paid the $890,000 back,” said Ms. Mansir. The town in August authorized a $100,000 bond to begin work on the 12-unit Accabonac affordable housing project, which is slated to cost up to $3.7 million.

The units in the complex will be condominiums in three manor house-type buildings and the town’s Community Housing Opportunity Fund plans to recoup the costs of construction through sale of the units, which range in price from $120,000 to $180,000, and from subsidies from other government agencies.

Town Housing Director Tom Ruhle said this week that his office has just completed a Planning Board application for the project, but has been instructed not to submit the paperwork until the auditors complete their work.

“My hope is that this is resolved quickly so we can go ahead with the project, because it’s a good project. We should be able to get some grant money to keep the cost down,” said Mr. Ruhle. “I would have liked to have had it done by the end of 2010. If the accountants say it comes back to life on January 1, we still have to have Planning Board approval, get it bid out, get firm prices, and start selling it. That’s not gonna happen in a year. I’d say it would be 18 months to two years from the day somebody says start up again.”