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Monday, March 2, 2009

Liar, Liar, Pants on Fire!!!


Concerned Citizens read with interest the article written by Dan Miner of the Observer Dispatch, New Hartford mostly cuts ties with consultant. If this article was about Utica...it would have been written very differently; however, it is about New Hartford and the Observer Dispatch once again felt compelled to "gloss over" the events. We would like to tell the real story about Frank Basile, CPA.

Concerned Citizens waited until December 31, 2008, the date that the previous contract with Mr. Basile was to end. We were curious as to whether another contract would be signed and if so, the wording of the contract. The town board pulled a fast one the last time a contract was signed by Mr. Basile in September 2007 and we were committed to seeing that it didn't happen again.

On January 13, 2009, we FOILed a copy of Mr. Basile's 2009 contract. Shortly thereafter, we visited the town clerk's office and were told that no contract is available so we asked the Town Clerk to have the Town Supervisor certify that no contract exists. A few days later instead of a certification we were handed a contract signed by Supervisor Reed on January 23, 2009...almost two weeks before the next town board meeting where the town board could approve the contract. Since Supervisor Reed does not have the authority to sign a contract without town board approval, we told the Town Clerk the contract was invalid and was not a legally signed contract and once again reminded her that we asked for certification from Supervisor Reed as to the accuracy of his statement that no 2009 contract exists.

Then a few days later when we visited the town clerk to pick up the February 11, 2009 Town Board Agenda, we noticed that on that agenda was an item under New Business - 2009 Professional Services Contract with Basile CPA (exempt from bidding). We immediately wrote a letter to all Town Board Members asking for an explanation. We even sent courtesy copies to the State Comptroller's office and Dan Miner at the Observer Dispatch. We won't go into all the details to include the town law that prohibits a contract over $20,000 from being given to an individual without following the procurement policy of the town; instead we will share the letter we wrote. It is fairly self-explanatory.

In short, our letter informed the town board and town attorney that there is no such thing as exempt from bidding. All work over $20,000 has to either go to a bid, or a Request for Proposal or price quotes must be obtained prior to any contracts being signed. The town's own Procurement Policy clearly states the same thing. Our letter includes attachments to support our case.

Subsequently, at the February 11, 2009 town board meeting the item under New Business was taken off the agenda and we were told that the town board will be investigating things further before signing the contract.

Of course, the story in the Observer Dispatch gave a completely different version of the events leading to Mr. Basile's services no longer being needed. Let's turn our attention to the baloney in the news article.

The article quoted Mr. Basile as saying:
...it is common that a deal for professional services exceeds the client’s original budget estimates. "Our contract did not stipulate an annual cost for professional services, but only an hourly rate based upon the level of the professional providing the service,” he said.
Here's the problem with that statement. In town government one cannot expend more than the adopted budget amount without first getting approval from the town board and without transferring funds from another account to cover the deficit. There is no such thing as oops...we spent more than we intended.

The article says:
Supervisor Earle Reed told the O-D that he expected to pay the company an annual salary of $40,000 when it was hired in September 2007. Since then, the town has paid $147,957, according to town records.
Supervisor Reed did indeed budget $40,000 for the 2008 Adopted Budget, but at the end of 2008, it was necessary to transfer $74,422 from other accounts to balance the overdrawn account that Mr. Basile was being paid from. The question is if Supervisor Reed only intended to continue to expend $40,000, why did he then budget $100,000 for the Financial Accountant budget line in the 2009 Adopted Budget that was approved in November 2008?

The article also says:
Since it was hired, the firm has helped implement federal accounting standards, prepared the 2008 and 2009 budgets, coordinated bonding and other financing measures, evaluated internal controls, updated town financial accounting software and performed other duties, Basile said
The Town also paid Mr. Basile to assist with negotiations and financial matters relating to the development of the New Hartford Business Park including discussions with MV Edge and OCIDA, and negotiations for PILOT agreements for Business Park occupants. We think it is important that taxpayers see just what Mr. Basile and his CPA firm has been paid to do...here are copies of his invoices for 2008. Please keep in mind that Supervisor Reed is, by town law, the Chief Financial Officer of the town.

We are providing a copy of the 2009 contract that was prematurely signed by Supervisor Reed and that would have been approved at the February 11, 2009 town board meeting if Concerned Citizens did not intervene. It is important that everyone sees just how entrenched Mr. Basile was in town politics. He was more than a financial consultant...he was being paid $150 an hour to do work that is the responsibility of the Town Supervisor. Mr. Reed has no business being Town Supervisor if he is not capable of doing the work associated with a Town Supervisor without hiring a $150 an hour consultant.

It is quite obvious that the town board and Mr. Basile fully intended to enter into a 2009 contract as evidenced by the February 11, 2009 town board agenda and the fact that in order to make it appear that the handling of Mr. Basile's contract was on the "up and up" in answer to our FOIL request, Supervisor Reed was willing to illegally sign a new contract for Frank Basile without board approval.

By the way, here is a copy of the transfers that had to be done at the end of 2008 to balance overdrawn accounts...almost $500,000 not including the transfer to pay Carol Fairbrother the overtime that she was not entitled to. Looks like someone doesn't watch their spending vs the budget on a month to month basis. Perhaps if Supervisor Reed had insisted on doing things correctly, i.e., transferring funds with town board approval prior to overspending an account, they would have known sooner than year-end that they had a problem with overdrafts.

How much did we pay Mr. Basile as a financial consultant? They actually had to co-mingle funds in order to bring all accounts to a $0 balance at year end. We suspect that the State Comptroller will have something to say about that when they come in to do an audit. Co-mingling funds is a no-no!

All this money and we still had to pay Ms. Fairbrother over $71,000 of overtime on top of her $58,000 salary. It sure is expensive to "balance the books" in the Town of New Hartford!

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