Gurney's Inn
October 17, 2007

McGintee's Dangerous Game

East Hampton Town Supervisor Bill McGintee's plan to take $2.5 million from the Community Preservation Fund to keep the town's tax rate low has other local politicians showing a range of emotions from disbelief to anger.

McGintee told his fellow board members on October 9 that the costs of administering the CPF fund were being paid by taxpayers and the transfer of funds would be the first step in ending the process.

Not so, said Assemblyman Fred Thiele, one of the architects of the plan.

"Once you take money out of the fund you need an expense to go with the revenue," Thiele said.

In past years, the budget would include the cost of CPF debt service ($5 million) and the cost of the town's small department that handles CPF ($227,213). After paying those amounts during the year the town would typically take the total amount out of the CPF fund and transfer it back to the town to balance the ledger.

McGintee took an additional $2.5 million and listed it as revenue, artificially decreasing the amount to be raised by takes.

"It's a dangerous game to play," said Southampton Town Supervisor Skip Heaney.

McGintee told his board "we consulted with Southampton Town" and implied that Southampton already employed a similar tactic.

"No way," Heaney said. "I use the opposite approach." Heaney said no one from East Hampton contacted him personally about the matter.

"It's not a revenue," Thiele stressed.

East Hampton will net about $20 million from the fund this year. McGintee told the board associated costs like "paper, mileage, our attorney . . ." would be paid for out of the increased revenue.

Heaney estimates his town will get about $53 million in CPF funds this year. The cost of administering the fund will come in at "maybe $300,000" he estimated.

"We spend $211,000 on salaries and legal fees and miscellaneous "soft costs" for land preservation. In addition, we spend about $70,000 for stewardship for outside agencies," said Scott Russell, the Supervisor of Southold Town.

McGintee mentioned the cost of "shingles and woodwork" as legitimate uses of CPF funds, leading to speculation that he will try to offset the huge cost of his town hall project. Heaney said that wasn't an allowable use of CPF funds; properties can be purchased, but they can't be renovated using the money.

"Buying materials in not a legitimate use of the money," Heaney said.

The town is turning a series of historic buildings that were donated into a new town hall and related offices. Rumors have swirled for months that the project was badly under-budgeted.

"You can use up to 10 percent of the CPF on a preservation project that needs the requirements of state law," Thiele said. "Even then, you would have to list the expenses on the other side of the ledger."

Heaney said his town has stringent controls on the CPF money.

"In 2003 we set up a budget line to separate CPF funds," Heaney said. "The idea is that we not treat the money coming in as a honey pot."

Referring to the $2.5 million transfer, McGintee told the board "our accountant thinks these are doable numbers." McGintee was referring to Albrecht, Viggiano, Zureck & Company, P.C. (AVZ); in a recent article The Independent revealed the board has given that firm over $1 million in the past three years despite the fact it has not produced a single audit since McGintee took office four years ago.

"We need to bring an independent auditor in here," said Sag Harbor Village Board member Brian Gilbride, who is running for the East Hampton Town Board.

Thiele said the state comptroller has the authority to order the town to remove the money from the revenue ledger, but that would come later, after an audit. "Any taxpayer can bring suit for misappropriation of funds," he added.

Former East Hampton Town Supervisor Jay Schneiderman said the transfer was "potentially an illegal use of CPF funds."

Former Town Budget Officer Len Bernard said McGintee's revenue ledger is bloated with "Monopoly money."

According to the Peconic Land Trust, a bipartisan advisory committee in each town is charged with overseeing the CPF programs. But Randy Parsons, who is on the East Hampton Town committee, said the town doesn't review CPF budget moves with the group.

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