City of Newburgh Council Work Session, 6:00 p.m. May 6, 2010

AGENDA:

City Council:

1. NCDA/City Council

a. Long Term Options

2. Presentation:

a. Fire Department based EMS services, Fire Department based code enforcement, MOU authorizing Fire Department’s due diligence regarding feasibility (see memo with draft resolution and mou): Chief Michael Vatter

b. Proposed amendments to City Code (see memo): Chief Michael Vatter

• Creation of a fire lane on Front Street from First Street to South Street and request for additional parking spaces on Water Street

• Update the City Fire Code to coincide with the regular updates of the National Electrical Code

c. Financial Updates:

• Sanitation Enterprise Fund proposal (see memo from Dwight): Dwight Hadley, CPA

• Moody’s Rating Report and financial updates: Dwight Hadley, CPA

• (Res. 103) Deficit Financing/Home Rule Request: Dwight Hadley, CPA

• Capital Projects Budgets: Craig Marti and Christine Mitchell

3. Planning and Development/Real Estate

a. Consolidated Iron:

• Site management plan: Craig Marti

• Waterfront alienation: Bernis Nelson

b. First Street Reconstruction – proposal from Stantec Services for completion of First Street Improvement Project (see memo from Craig): Craig Marti

c. Provan Site – recommendation of award of a bid for the building demolition (see memo from Ian and Craig): Ian MacDougall and Craig Marti

d. Ann Street Parking Lot – request for a license agreement

e. 135 Wisner Avenue – request for an extension of time to close

f. (Ord. 5) Creating a section of the Code entitled “Sidewalk Cafés”: Bernis Nelson, Courtney Kain and Chief Vatter

4. Discussion items:

a. Parking, Traffic and Transportation Advisory Committee

b. (Ord. 6) Downing Park fee schedule

c. (Res. 100) Scheduling a public hearing to receive comment on a proposed local law amending the procedure for the collection of water rents

d. (Res. 101) Scheduling a public hearing to receive comment on a proposed local law amending the tax roll valuation date from January to July and changing the hearing date for grievances from the third Tuesday in May to the fourth Tuesday in May (see also memo from Steve Ruelke)

e. (Res. 102) Quarterly warrant for the collection of sanitation fees

f. Liberty/Waterfront Shuttle

g. City Council standard work day and reporting

h. Summer Council Meeting schedule (see calendar)

5. Executive Session:

a. Pending litigation

b. Matters Pertaining to the employment of a particular person

Full audio recording of the meeting below, or download:

Newburgh Community Development Agency returns to action (after long hiatus):
When: Thursday, April 8, 2010 at 6:00 PM
Where: Council Chambers, City Hall, 3rd Floor, 83 Broadway
On the agenda: Three items.  1. NCDA Mortgage Loans; 2. NCDA Property (foot of former South Street – $3150 Quadricentennial Grant from Hudson River Foundation); 3. NCDA Long-Term Plans
What’s at stake: At a recent city council meeting, a resident complained that she could not get a document proving her loan granted by the NCDA years ago was satisfied (paid off)  from the City.  Without this document, the resident could not take out a needed loan.  This resident’s plight is due to the NCDA board not meeting for years and there being no one else authorized to take action.  (Although, curiously, a satisfaction document was signed by former Economic Development Director Lourdes Zapata as recently as March 2009; shortly thereafter, she and former Corporation Counsel Geoffrey Chanin sought the city council’s approval to authorize Zapata to act for the NCDA.  The council refused.  Additional NCDA loan satisfaction documents were signed by Zapata’s predecessor Robert McKenna, but then filed with the county years later.)  Recently, Corporation Counsel Bernis Nelson had proposed transferring all assets and liabilities of the NCDA to the City.  That action was not taken by the council (who currently are the NCDA board as well.) Losing the NCDA would also mean losing its ability to issue debt.
Question: Will the NCDA/City Council take any actions at the meeting?  The public notice states “the purpose of the meeting is to discuss” the agenda items (emphasis mine.)
More info: End may be nigh for NCDA

And next week…

Who: Pace University Land Use Law Center & Center for Community Progress
What: Strategy Sessions about City of Newburgh Vacant/Abandoned Buildings
When: Two Public Meetings: Wednesday, April 14 at 6:30 p.m. - Education Session & Overview of Best Practices
and Thursday, April 15 at 6:30 p.m. - Community Strategy Session
Where: City of Newburgh Activity Center, 401 Washington Street
For more info: call the City of Newburgh at (845) 569-9400
Funder: made possible by grant from the Ford Foundation
Official description:
As in many communities across the country, vacant and abandoned buildings in the City of Newburgh continue to drain the energy and vitality of neighborhoods. Eyesores as well as  magnets for crime, these buildings degrade  the overall quality of life for people in the  surrounding blocks, while dragging down surrounding property values and negatively impacting rehabilitation efforts.

What are the best ways to address this pervasive problem? To learn more about how other communities deal with blighted buildings, and to participate in a community strategy session, all are invited to attend presentations.

Wednesday’s presentation is “Vacant & Abandoned Properties: Effective Public Policy Approaches.”  It will inform local leaders, partners, stakeholders, and the public of the land bank model, land management strategies, system reforms, and financial models to make it all work.

Invitation-only workshops / focus groups will be held on Thursday during the day. These workshops will facilitate discussions on present practices, challenges, and opportunities related to tax-foreclosed and other vacant and underutilized properties.

Thursday evening’s public community strategy session will include recommendations for next steps, system reforms, identifying possible funding sources, board composition, staffing needs of proposed programs, and more.

City Press Officer Ann Kuzmik clarified that “developers, local merchants/realtors, department heads, institutional stakeholders, non-profits, community/neighborhood group leaders, and advisory board reps will be attending the (invitation only) day sessions.”

Video excerpts from the city council work session Thursday, March 4, 2010.

The work session began with a grave report on the city’s financial status, given by Dwight Hadley, CPA, and assisted by Christine Mitchell, CPA, the city’s new comptroller:

Next came a presentation by Dr. Jerome Blue on the status of the Liberty Street School project:

The third presentation was regarding the Community Resource Officers, or CROs. Representing the Newburgh Enlarged City School District were Ralph Pizzo and Mike Pacella. The school district has offered to pay the city for two new police officers in exchange for staffing Newburgh Free Academy and North Junior High School with a CRO each. Also assisting with the discussion were two former CROs, who spoke of the benefits of the positions, and FBI agent Maryann Goldman, who spoke about the seriousness of Newburgh’s gang problems (as reported in the cover story of the Times Herald-Record) and urged the council to fund the positions.

Full video of the entire CROs discussion here:

Finally, from later in the work session, discussion on the Home Improvement Loan Program.

[video deleted]

This program is administered by Demetrius Faulk. Courtney Kain, Acting Director of the Planning Department, explained the program with Demetrius. It was during discussion of this program that (at 6:15 on the video) Councilwoman Marge Bell notes that the records show her as the recipient of a $13,500 loan. Bell says she did receive some funding, but she says she did not receive $13,500.

The loan originator is listed as the Newburgh Community Development Agency (NCDA), which corporation counsel Bernis Nelson recommended dissolving earlier in the work session.

Attendees of the Newburgh City Council work session this past Thursday might have had a funny “Back to the Future” feeling when Neil Novesky was invited to the table.  The council was vetting Novesky and his wife Elizabeth to serve as CDBG consultants under Courtney Kain, Acting Planning Department Director.   Community Deveopment Block Grant (CDBG) funds are given to the city from the Department of Housing and Urban Development with the goal of improving conditions “principally for low- and moderate-income persons.”

Mr. Novesky was an employee of the City of Newburgh’s Development Department from 1983-1986.

As Novesky stated during his interview, it was a time of many “UDAGs” – Urban Development Action Grants, including what was to become the Key Bank Building at the foot of Broadway, and the selling off of Broadway School to several partners, including then consulting engineer Bill Hauser.

Later Novesky and his wife would work for the City of Middletown (as of this posting their website still lists Novesky as Community and Economic Development Director.) Novesky, along with Middletown Mayor Joe DeStefano and City Court Judge Rich Guertin, were the three defendants of the corruption trial that forced DeStefano out of office.  Novesky and Guertin were found not guilty on all counts in April 2005.  Novesky continued working during the trial and through the mayorship of Marlinda Duncanson, tendering his resignation December 4, 2010––just before DeStefano would return to office.

During the Noveskys interview Thursday night, Neil did the talking.  He said he would focus on large economic development projects, and try to set up revolving economic development loans with CDBG funds.  Toward the end he made mention of a nonprofit he and his wife work for.  He spoke softly, and I couldn’t quite catch if he stated the nonprofit’s name.  After their presentation, they made a swift exit, and I ran after them, catching them at the top of the stairs.

“You mentioned you work for a nonprofit.  What is the name of it?”

“CIDC.”

“Loewenstein?” I asked.

“Yes.  He pays on a per diem basis,” Novesky answered.

Have we met before?

It’s hard to tell when Mr. William Loewenstein began his consulting relationship with the City of Newburgh.  Back in 1982, the City passes Resolution No. 6 on January 25 by which the “National Development Council of Hudson, New York” is contracted to provide economic development assistance for $35,000 per year.  In later publications, Loewenstein is identified as a consultant with NDC.

Loewenstein was one of the signatories of the incorporation papers for the Broadway School partnership “Denn Cass”––a deal that profited some of the partners, if not the city’s local development corporation.

Loewenstein continued his consulting relationship over the years in Newburgh, more recently through his nonprofit CIDC – Community Initiatives Development Corporation.  He was also a consultant to the City of Middletown, and indeed, gave grand jury testimony in the aforementioned corruption trial.

The Newburgh IDA ended its relationship with CIDC when a new board was seated, after talks with CIDC representative Ed Schorno in 2008.

CIDC Courthouse Deal

CIDC is a controversial name in Newburgh in part because of the city courthouse deal with terms such as triple-net-lease proposed by Loewenstein.  At the time (2005) Loewenstein was a financial consultant to the city, he proposed that his nonprofit be the funding vehicle for the construction of the new courthouse.

Antony Takahashi, who then lived in Newburgh and worked as a financial analyst for IBM, did an evaluation of the terms of the contract.  The Times Herald-Record quotes Takahashi saying he would never recommend the deal to his bosses. “Not in good conscience.”

Full video of the CDBG discussion, including interview with the Noveskys:

There have been reports of problems with the video embedded below. To access the video directly, go here.

Part 1: Opening of meeting. No comments from the public given. Resolutions 186-2009 through 196-2009.

Part 2: Resolution 197-2009: A resolution to ratify a settlement in the matter of Savoy of Newburgh, Inc., Rudolph LaMarr, Salvatore Cucorullo, Quincy Magwood v. City of Newburgh, City of Newburgh Local Development Corporation, City of Newburgh Industrial Development Agency, Nicholas Valentine and Stephen Rockafellow; Resolutions 198-2009 through 205-2009.

Part 3: Resolutions 206-2009 through 208-2009.

Part 4: Public comments.

Part 5: Public comments continued.

Part 6: Comments from the council; Councilwoman Regina Angelo and Councilwoman Marge Bell.

Part 7: Comments from the council; Councilwoman Christine Bello, Councilwoman Mary Ann Dickinson, and Mayor Valentine.

Audio files may also be downloaded from the Internet Archive here.

(Res. 172-2009) Route 9W Reconstruction:

• BAN and RAN – Ken Bond, Esq., Squire Sanders and Dempsey

There was no hint that this agenda item actually included three resolutions, two involving bonds and the third involving the creation of an advisory board, and that Interim City Manager Richard Herbek had hoped to pass all three at the regular city council meeting to be held Monday, November 9th – sans public hearing.  The discussion on these resolutions stretched to over an hour.

Quotable Quotes

All you can do is apologize. – Corporation Counsel Michelle Kelson, on how Newburgh got into its financial mess.

I have seen absolutely no will to start living within our means… All I see is just more of the same, we credit card our way out. – Councilwoman Christine Bello, on passing more bonds to reduce the tax increase from 82% to 35%.

Have you discussed furloughs? – Councilman elect Curlie Dillard, who sat at the council table during the entire work session.

There is no way I can go to my constituents and say, “we need another 35%.” – Councilwoman Marge Bell.

If you had a control board [by the state taking over], I don’t think it’s a measurably better story for you folks. – Jeffrey Hyman, Stone and Youngberg (Newburgh’s bond underwriter.)

I sat with him [Ken Bond] on the control board [Mr. Valentine means Newburgh's financial advisory board] in the 90s. – Mayor Nick Valentine.

Listen to the full discussion (approx. 1 hour 10 minutes) here:

Download this file here.

Looking Forward

“This is going to be very very difficult without a public hearing,” Mayor Valentine acquiesced, and it was decided to have a public hearing at the council meeting on November 16th, and at that same meeting a vote would be taken.

On Monday, November 9th, expect to see during the regular city council meeting a resolution scheduling the public hearing.

Acting City Manager and City Comptroller Charles Emberger, Corporation Counsel Geoffrey Chanin, Acting Director of Planning and Development Courtney Kain, NIDA member Jerry Maldonado, NIDA Treasurer Michael Curry, and NIDA Acting Chair and Vice Chair Joshua Smith.

On Thursday, August 13, the Newburgh Industrial Development Agency (NIDA) gave a presentation at a special work session of the Newburgh City Council.  Acting Chair and Vice Chair Joshua Smith spoke for the NIDA, describing the many struggles and setbacks that have stymied the agency since the new board’s appointment in 2008.

A brief history of NIDA 2008-2009

Previously the city council and two additional appointees made up the NIDA.  Due to the passage of the  New York State Public Authority Accountability Act of 2005, the council could no longer legally make up a majority of the board.  Back at the May 2008 city council meeting Mayor Valentine states that new NIDA board members will be announced in June.

But no June announcement was forthcoming.  And on July 15, 2008, a quorum from the old  NIDA meets for one last time, and awards what appears to be a no-bid contract to Urban Design Associates with a ceiling of $50,000.  At this last meeting the then NIDA Administrative Director Robert McKenna also gives quite an optimistic update on the West Street Medical Tech Project, which is the project currently under scrutiny due to the potential partial or total loss of a $1.75 million grant from the Economic Development Administration, part of the Department of Commerce.

Finally, at the July 21, 2008 council meeting, the board is appointed.  But it is not until September 2, 2008, that the new board convenes.  At that meeting, Smith told the council last night, “we did something new for the IDA…  We turned the microphones on, so that the public could hear what was going on.”

NIDA board members continue to meet, often more than once a month, including September 15, 2008, September 29, 2008, October 20, 2008, throughout the fall and into the present. McKenna announces he will retire on December 18, 2008.  The day before he retires, he writes a check from the NIDA checking account, unbeknownst to the board, for $388,825.97.

Lourdes Perez takes over as administrator following McKenna’s retirement.  At the January 5, 2009 meeting, the board passes a unanimous call asking for a state audit of the NIDA.  At the January 16 meeting, the board recounts how they learned that NIDA is a “delinquent” agency that failed to file financial reports, that the treasurer had been unable to ascertain how much money was in the agency’s bank accounts, and that the accounting situation is “an embarrassment and an outrage.”  They pass resolutions to freeze account access and limit disbursement authority to the board.

The HUD audit and stealth government

The Department of Housing and Urban Development (HUD) issued audit 2009-NY-1008 on February 24, 2009 investigating how the City of Newburgh administered its Community Development Block Grant (CDBG) program.  HUD charges that “the City lacked documentation to show that $558,344 in CDBG funds used to pay for administrative costs was for reasonable and necessary expenditures.”

On January 28, 2008, the acting city manager John Platt responds to the draft of the HUD audit.  Copied on the letter are the City of Newburgh Council, Corporation Counsel Geoffrey Chanin, and Lourdes Zapata, Director of Planning and Development at the city.  Platt writes that

The majority of any unsupported expenditures for administrative costs have already been reimbursed.  The IDA reimbursed the CDBG program $388,825.97 on December 18, 2008 upon completion of an internal review of applicable/reimbursable costs…

As to the remaining balance, we are currently reviewing our internal records and will document that such funds were properly expended.  We will determine whether any journal entries or other records were recorded in error.

The NIDA board had no idea that this had happened and had not authorized the transfer.  On March 31, Vice-Chairman Joshua Smith writes to Zapata, City Comptroller Charles Emberger, and Acting City Manager Dwight Douglas, stating

This transfer of IDA funds was accomplished without the knowledge, consent or approval of the IDA Board.  On behalf of the IDA Board I thus demand that Ms. Zapata promptly, and no later than Friday, April 10, 2009, restore to the IDA account the full amount of $388,825.97 that had been withdrawn without the Board’s knowledge, consent or approval.

When the city fails to return the funds by the specified date, NIDA files suit against the city manager, city comptroller, and city planning director on May 6 to demand that they do so.

NCDA questions bring strange segue

In April of 2009, I was researching the Newburgh Community Development Agency (NCDA), and discovered that a personal injury suit had recently been filed against the NCDA by Elaine and Hector Lopez.  Ultimately I would write about this suit in the post “Who is negotiating with Ms. Lopez?” on May 7.  In preparing to write about the NCDA, following the conclusion of the April 27 council meeting I ask Mayor Nick Valentine when he thinks the agency last had met.  According to state law, the NCDA is made up of the city council.  Mayor Valentine states that he thinks it was about two years ago, to handle a property deal.  He then segues into talking about the NIDA.

“We screwed the IDA,” he says, “we didn’t give them their $418,000 for the Broadway School… They could sue… But they’re not going to sue, because we appointed [them],” and, he explains, they’d just get rid of them, appointing a new board.

Mayor Valentine’s memory is slightly off on the Broadway School amount.  At the September 4, 2008 work session, then City Manger JeanAnn McGrane gives the council a presentation on options to reduce the cost of the courthouse bond, including “nonrepayment of IDA loan $511,701.”  On her powerpoint slide and in the video, Ms. McGrane clearly states that IDA approval would be needed to forgive the loan.  That approval is never sought.

Mayor Valentine confirms with Corporation Counsel Geoffrey Chanin at a May 21, 2009 work session (at the end of this video, and also below) that the Newburgh Industrial Development Agency Board serves at the pleasure of the city council, and that “there are no time limits.”  The NIDA suit predates this inquiry by two weeks.  The NIDA board serves at the council’s pleasure… or not.

What about the NCDA?

Following the publication of the post “Who is negotiating with Ms. Lopez?” on May 7, the city council discusses the NCDA and, to some extent, the NIDA and the Newburgh Local Development Corporation (NLDC) at two work sessions, on the above mentioned May 21 and also June 18 meetings.  At these sessions, the council majority of Bell, Bello, and Dickinson express reluctance to take on the governing of an additional body on top of their council duties. On June 18 Councilwoman Bello asks whether the NIDA could take over the NCDA, since the Authority Accountability Act requires training and strict reporting of financial information, requirements that the NIDA board fully understands to which it is “working diligently” toward compliance.  Interim City Manager Dwight Douglas dismisses this idea, and Mayor Nick Valentine says, “I don’t care what it’s from, we’re in a lawsuit,” and bursts into laughter, to the dismay of Councilwoman Marge Bell.

June 18 part 1:
[video deleted]

June 18 part 2:
[video deleted]

In this excerpt, Councilwoman Christine Bello states her preference not to be a part of the NCDA. Interim City Manager Dwight Douglas tries to explain how the city council is already conducting NCDA business, unbeknownst to them, and suggests that he and corporation counsel Geoffrey Chanin will look into what the implications are of this and report back to the council. “I feel chastened,” Douglas says, that he hasn’t done that research already for the council.

May 21 part 1:
[video deleted]

May 21 part 2:
[video deleted]

Why wasn’t the risk explained to the city council?

Watching these meetings, I could not understand why Corporation Counsel Geoffrey Chanin did not emphasize the necessity of responding to the personal injury lawsuit filed by Elaine and Hector Lopez.  If the council did not take action and, at a minimum, hold one meeting as the NCDA to authorize the hiring of legal counsel to represent the agency in this case, they would be at risk of a default judgment.  At one point during these discussions, Councilwoman Bello expresses her extreme reluctance to take on the NCDA, but says if she really must, she will.  But Douglas and Chanin humor the council’s request for more time and more information, and say they will get back to them.

The workaround

Conveniently, four days after the June 18 work session, on June 22, things get much easier for Corporation Counsel Geoffery Chanin.  The attorney for the Lopezes, Peter C. McMahon, files a “supplemental summons” listing the City of Newburgh as a co-defendant along with the NCDA.  In this document, McMahon writes almost duplicate statements implicating the city along with the NCDA:

4. Upon information and belief, and at all times hereinafter mentioned, the Defendant, NEWBURGH COMMUNITY DEVELOPMENT AGENCY, owned the lot and/or parking lot at Section 12, Block 6, Lot 5, Newburgh, County of Orange, State of New York.

5. Upon information and belief, and at all times hereinafter mentioned, the Defendant, CITY OF NEWBURGH, owned the lot and/or parking lot at Section 12, Block 6, Lot 5, Newburgh, County of Orange, State of New York.

6. Upon information and belief, and at all times hereinafter mentioned, the Defendant, NEWBURGH COMMUNITY DEVELOPMENT AGENCY, maintained the lot and/or parking lot located at Section 12, Block 6, Lot 5, Newburgh, County of Orange, State of New York.

7. Upon informition and belief, and at all times hereinafter mentioned, the Defendant, CITY OF NEWBURGH, maintained the lot and/or parking lot located at Section 12, Block 6, Lot 5, Newburgh, County of Orange, State of New York.

8. Upon information and belief, and at all times hereinafter mentioned, the Defendant, NEWBURGH COMMUNITY DEVELOPMENT AGENCY, controlled the lot and/or parking lot located at Section 12, Block 6, Lot 5, Newburgh, County of Orange, State of New York.

9. Upon information and belief, and at all times hereinafter mentioned, the Defendant, CITY OF NEWBURGH, controlled the lot and/or parking lot located at Section 12, Block 6, Lot 5, Newburgh, County of Orange, State of New York.

On July 29, attorney Michael E. Catania from the firm Tarshis, Catania, Liberth, Mahon & Milligram files a request for judicial intervention on this suit, signing as “Attorneys for Defendant CITY OF NEWBURGH.”

And, at the August 10 city council meeting, under the “communications” portion of the meeting, the council votes and approves unanimously referring this suit (among many others) to the corporation counsel for action.  Did any of them even realize this was the same NCDA suit that necessitated the earlier work session discussions?

Even Mr. Chanin’s memory seems a little fuzzy.

“I noticed that the Lopez suit, Elaine and Hector, was referred… they were originally suing NCDA?” I ask him.

“Ok, it’s not registering, but keep talking.”

“Ok, I just noticed that it was referred…”

“All claims are referred to the corporation counsel to the power to act because technically, under the charter…” he goes on.

“If the Community Development Agency is listed as a party, do they still have to reply?”

No answer.

“You had explained to me earlier, that if somebody sues the CDA, they have to hold a meeting and appoint somebody to respond.”

“In the absence of the CDA… You can’t just not show up… when you get a notice of claim, if it’s against any city agency, whether it’s the NCDA or the IDA or some other [entity]… if they have not formally met to act, it’s incumbent on me to defend the city… at least until they decide to meet, and make another decision.”

No NCDA, but that doesn’t stop them from collecting debt

The same day things get easier for Mr. Chanin, the city comptroller Charles Emberger decides things would not get any easier for NIDA.  On June 22, Mr. Emberger writes a letter of demand to the NIDA.  They need to pay $169,518 to the Newburgh Community Development Agency – that’s right, the same agency that has no board members, no administrative director, and, according to the July 2009 Annual Report on Public Authorities in New York State issued by the Authority Budget Office, has not submitted either budget reports or annual reports in PARIS, the required state filing method.

Emberger sends his letter to the NIDA:

To back up his claim, Mr. Emberger includes the first two pages of the June 15 letter from HUD’s New York office, from Vincent Hom, the Director of Community Planning and Development.  Mr. Hom writes at the top of page 2 that (emphasis mine)

The Office of Inspector General stated in the report that documentation provided by the City during the January 2009 exit conference to demonstrate that the $388,825.97 was reimbursed to the CDBG Program was found to be acceptable.  After review of the documentation, we agree in that assessment.  In order to resolve this recommendation, the City must submit evidence that overall receivables from the IDA to the CDBG Program including the $388,826 have been reduced in the City’s records and supply documentation for the remaining balance of $169,518 which clearly indicates that these costs were for eligible CDBG administrative expenses; or repay ineligible or inadequately documented costs from non-federal funds. The City shall arrange to submit additional documentation or have materials available for examination within 45 days of the date of this letter.

Despite the city’s claim in their January 28 letter to HUD, included in the February 24, 2009 Audit, that

As to the remaining balance, we are currently reviewing our internal records and will document that such funds were properly expended.  We will determine whether any journal entries or other records were recorded in error.

…for whatever reason, that documentation must not have been forthcoming, since Mr. Emberger sends the bill to the NIDA.

What are the consequences?

I ask the New York State Authority Budget Office, to whom agencies such as the NCDA and the NIDA–as well as the Newburgh Local Development Corporation–must file financial reports, if there are any consequences to the NCDA failing to file or meet as a board.  Matt Anderson replied, stating:

The ABO does not have statutory authority to compel reporting or to require the board to meet on a regular basis.

I also ask if an agency is not being administered by its board or an officially appointed administrative director, could the city manager and/or the city comptroller act on the agency’s behalf?  Mr. Anderson replied (emphasis mine):

We do not believe that a city employee can act in place of the board without the specific authorization of the board. It is our understanding that the Office of the State Comptroller has issued opinions that appear to conclude that only the agency can appoint personnel and this power cannot be delegated to officers or employees of the agency.  I suggest speaking with the Office of the State Comptroller for further information on this issue.

The Office of the State Comptroller did not provide an answer to repeated requests for comment on this issue.

What about HUD?

I ask HUD’s New York office if it matters to them that the NCDA is not filing financial reports and without an active board.  Newburgh annually receives HUD money in the form of CDBG funds, and those funds have been administered, as far as I can tell, by the NCDA (whether the council is cognizant of that or not.)

Adam Glantz answers that there is no requirement that the CDBG funds be administered by the NCDA; “the eligible applicant is the City of Newburgh,” and were the NCDA to somehow be dissolved, the city could apply directly.

Does HUD have any problems granting CDBG moneys to an agency that has no officially appointed director and is not acting in accordance with the authority requirements of New York State?

Mr. Glantz says no.  “HUD regulations allow that the chief executive to designate a public agency to administer and monitor its programs,” he writes, “HUD regulations only require only that an agency have “continuing capacity” to carry out the program activities in a timely manner.”

NIDA auditors stymied

NIDA board members were kept in the dark about the $388K check for the HUD audit.  And the Newburgh planning and development office apparently wasn’t any more forthcoming with the NIDA auditors.  At the July 13, 2009 meeting, the 2007 audit is accepted. The auditors describe in their difficulties gaining access to records and city personnel at arranged appointments, writing that “when we showed up, no one was there…”

Paging the NLDC

The day after Robert McKenna retires, on December 19, 2008, a letter is written to him from the State of New York Authority Budget Office.  Writes the ABO,

As you [McKenna] know, recently we mutually determined that your local development corporation met the definition of a local public authority under the Public Authorities Accountability Act (Act).  This letter is intended to continue the communication between our offices and to prepare your LDC to meet the requirements of the Act…

We look forward to working with you in the spirit of open, transparent and accountable government embodied in this legislation.

Yet this letter only came to the knowledge of the city council through the efforts of a citizen.  That these various agencies must comply with the Public Authorities Act was something that seemed of greater importance, awareness and urgency to Councilwoman Bello at the June and July work sessions than to either City Manager Dwight Douglas or Corporation Counsel Geoffrey Chanin.  Despite promises, no public follow-up happens regarding these issues.  With the assignment of the Lopez suit to corporation counsel, the immediate heat is off.

At the conclusion of the NIDA’s presentation on August 13 (first video on this page), the subject of the NLDC comes up, and when it does, Mayor Valentine brusquely draws the meeting to a close.  The members of the NLDC are present, although they might not all know it.

Why the confusion?

In January of 2003, the city’s charter is changed, merging the NIDA and the NCDA into a new city department:

ARTICLE XIV
Department of Planning and Development
[Added 1-27-2003 by L.L. No. 1-2003]

§ C14.00. Establishment; head.
There shall be a Department of Planning and Development, headed by a Director of Planning and Development, who shall be appointed by the City Manager and who shall serve at the pleasure of the City Manager.

§ C14.01. Director of Planning and Economic Development.
The Director of Planning and Development shall be appointed on the basis of his education and experience in carrying out the duties of the position. Among the Director’s functions and duties, but not by way of limitation, shall be the following:

A. To act as a full-time administrator of the Department, the Newburgh Local Development Corporation and the Newburgh Industrial Development Agency offices to ensure a coordinated and comprehensive approach to community and economic development within the City of Newburgh.

B. To develop and administer a combined and integrated staff to support the Newburgh Community Development Agency, Newburgh Local Development Corporation and the Newburgh Industrial Development Agency and other community-based programs recognized by the Council.

In the aftermath of the Savoy scandal, NIDA administrator and board changes, City Manager William F. Ketcham recommends the reconfiguration in part to reduce the influence of “politically motivated” decisions.  If the administrative director to these agencies is under the city manager’s control, perhaps abuses like the $380,000 unauthorized transfer to the Savoy partners would be less likely to happen.

As late as January 10, 2005, the city council appoints the officers of the Newburgh Community Development Agency, in resolution 9-2005.  They are:

Mayor Nicholas Valentine – Chairman
Councilwoman Regina Angelo – Vice Chairman
Dawn Gobeo – Treasurer
Councilwoman Else Figureoa App – Secretary

Time passes; Robert McKenna takes care of things, and, until the passage of the Public Authorities Act in 2005, there isn’t much reason to do anything differently.

It is a strange coincidence that it is another $380K sum of questionable provenance that has drawn this tangle of agencies and government authority under scrutiny.

Conference tomorrow on NIDA vs. City Manaager, City Comptroller, and City Planning Director suit

Monday morning, August 17, attorneys representing the NIDA and the City Manager, City Comptroller, and City Planning Director will meet in Goshen and perhaps come up with terms for a settlement.

The saga of the city’s public authorities – the Newburgh Industrial Development Agency, the Newburgh Community Development Agency, and the Newburgh Local Development Corporation – will no doubt continue.