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Friday, September 25, 2020


No, it's not short for "last Friday night"; it's short for Local Finance Law; section 165 to be exact.

I know I have pointed to this law several times over the last fourteen (14) years that I have been writing this blog; it should be etched in the minds of every person who has any plans of sitting on a town board. 

Unfortunately, there are those who think they can willly-nilly do whatever they desire; law be damned!

New York Consolidated Laws, Local Finance Law - LFN § 165.00 Deposit and use of proceeds from sale of bonds, bond anticipation notes, capital notes, urban renewal notes or budget notes states:
a. The proceeds, inclusive of premiums, from the sale of bonds, bond anticipation notes, capital notes, urban renewal notes or budget notes shall be deposited and secured in a special account in the manner provided by section ten of the general municipal law , shall not be commingled with other funds of the issuer, and shall be expended only for the object or purpose for which such obligations were issued. In the event that any portion of the proceeds, inclusive of premiums, from the sale of bonds, bond anticipation notes, capital notes, urban renewal notes or budget notes is not expended for the object or purpose for which such obligations were issued, such portion shall be applied only to the payment of the principal of and interest on such obligations, respectively.
After I realized that purchases were being made and also paid prior to the adoption of a town board bonding resolution adopted in December 2019 and prior to the receipt of bond proceeds in February 2020, I decided to focus in on how that could happen. Where did the money come from to pay those bills?

Didn’t take long before I found that money was being transferred from one bond account to another bond account without town board approval as required by law and in violation of Local Finance Law.
Let me go all the way back to the January 24, 2019 town board meeting minutes, long before anyone even knew the word COVID; Miscione's latest attempt to place blame.

The January 24, 2019 minutes of the town board state:

The Town Supervisor lead a lengthy conversation as to advantages of consolidating existing bond issues, and bonding for new purposes such as updating aged skating rink equipment, paving roads, updating existing community center kitchen equipment, and land acquisition. Meanwhile, the Town Attorney reviewed four (4) proposed bond resolutions that had been prepared by Thomas Myers, Bond Attorney, from New York City.
At that same meeting, four (4) bonding resolutions were unanimously adopted by the town board; one of them being for the kitchen equipment Miscione requested the town board to add to the bonding, which the town board agreed to do. 
At the next regularly scheduled town board meeting, February 6, 2019, the town board was asked to accept the low bid from Flihan’s for the kitchen equipment. 
Bid Results – Kitchen Equipment Community Center
The following Resolution was offered for adoption by Councilman Reynolds and duly seconded by Councilman Lenart:
RESOLVED, that the New Hartford Town Board does hereby accept the low bid submitted by Joseph Flihan Co. 418-426 Broad Street, Utica, NY 13504 for the purchase of Community Center Kitchen Equipment:
• Items No. 1 -14 - $26,900.00
• Option 2A (Traulsen Freezer) - $2,740.00
• Option 12A (4-well Hot Food Counter) - $560.00 And does hereby award the aforesaid contract to said vendor.
So, it looks like the winning bid was about $31,000; yet you can see that the bonding resolution was for $75,000 which seemed high at the time of the bond resolution adoption.

Anyway, on February 20, 2019, an Official Statement for the sale of bonds was detailed on Fiscal Advisors website with a sale date of March 6, 2019. 

However, the Official Statement still included $75,000 for kitchen equipment even though by February 6, 2019 the town board knew that the winning bid was about $31,000.  Why did Miscione continue to bond for more than he knew he would need to update the Seniors' kitchen?  

The May 8, 2019 town board minutes state:
Supervisor Miscione Update on Town Hall
Supervisor Miscione updated the Board on the progress taking place in the new Town Hall. The Courts are scheduled to be moving around May 13, 2019, and the Police Department towards the end of May 2019. Supervisor Miscione also stated that the Senior Center kitchen should be completed by June 1, 2019.

If I remember June 2019 was about the date that the Seniors moved into their new space at the Gander Mt. town hall.   

The August 14, 2019 town board minutes reflect that Flihan’s bid bond was returned.  So it is safe to say that by August of 2019, the kitchen was completed so any unused money should have been put in a reserve to pay the annual bond debt.

Now that we have the back story...let's look at the Supervisor's 2020 monthly reports to see if we can get a clue as to what has been going on behind the scenes..  

In town finance, any account that starts with the letter “H” is either a revenue or an expense account for monitoring the receipt and expenditures of bond proceeds.  

For now, let's talk about account HCK24010 which is the account that was used to track the bond proceeds for the Community Center Kitchen; and also let's look at account HCK9901.9 which is to track the appropriations from the Community Center Kitchen Equipment to pay for the kitchen equipment.

According to the Supervisor’s January 2020 report, revenue account (HCK24010) only shows $1.00 anticipated interest earnings, but no revenue received.  There are also no expenses paid or encumbrances for the January 2020.  Probably because the extra monies are now being set aside to pay the bond debt just like Local Finance Law requires.  Not so fast...

The February 2020 Supervisor's report shows the same thing as the January report.

However, the March 2020 Supervisor's report shows revenue receipts of $.44  in HCK24010, but the appropriation account (HCK9901.9) shows expenditures of $43,806.19 which was noted as being "transferred to another account".  No account was mentioned for where it was transferred.

Further review of the March 2020 Supervisor Reports shows that the $43,806.19 from HCK9901.9 appears to have been transferred to HV - Gander Mountain-New Town Hall and the account number has now been changed to HV50310 tagging it as a Gander Mountain New Town Hall bond account rather than a kitchen equipment bond account.

Looking at the March 2020 HV - Gander Mountain - New Town Hall account, it shows receipts of $56,175.63 (included in that total is the transfer of $43,806.19) and expenditures of $64,035.54 leaving a -$66,625.54 balance in that account.

Friends, I'm not going any further explaining this mess.  This is an account which is supposed to be used to reflect bond revenue and expenses and the unused portion should have already been moved to a reserve account to pay the debt because the kitchen equipment was already acquired and paid for.

Miscione's Supervisor Reports are a piece of crap.  They make absolutely no sense. How in the world could anyone on the town board know what is going on?  Why didn't anyone ask for better reporting from the supervisor?

Besides all the misappropriated town funds that I have been blogging about (fire, sewer, water, earned interest, etc..), it would appear that bond proceeds have also been moved around and spent in stark contrast to what Local Finance Law allows.  

We are in TROUBLE...need I say more?

Did Miscione purposely bond for more money than he needed to purchase the kitchen equipment to create a “slush fund”?  


Did he get caught up in his own foolish scheme to try to afford that which I told him from the start he could not afford?

How many other “H” bond accounts have and are being manipulated to try to "right this ship"?   

Where is the Annual Update Document that the NYS Comptroller's office requires to be filed by May 1st each year.  Miscione said at the last meeting it would be available by the end of the week.  

Well, today is the end of the work week.  It is not on the town' website; and it has not been submitted to E.M.M.A. as required by the Securities & Exchange Commission rules.

Enough with the baloney... Miscione, it's time to start telling the truth!

Thursday, September 24, 2020

Mia Culpa...I don't even know how it happened!

For the second time in the last two months (and third time since Miscione became town supervisor) Fiscal Advisors found it necessary to submit an "Event-based Disclosure" on behalf of the Town of New Hartford to the Electronic Municipal Market Access (E.M.M.A.) website which is governed by the Securities & Exchange Commission.

On July 14, 2020, Fiscal Advisors reported that the Annual Update Document (AUD) required to be filed with the NYS Comptroller's office by May 1st each year was not available for the town's required annual disclosure report to E.M.M.A.  Miscione now claims that the AUD will be available this week.

On September 21, 2020, last Monday, Fiscal Advisors had to submit another Event-based Disclosure to "correct their "ANNUAL FINANCIAL INFORMATION AND OPERATING DATA" that was dated as of June 30, 2020".

It seems that just as I reported in my August 12, 2020 blog titled "Pennywise and Pound Foolish", the town somehow forgot to mention the $3,291,762 BAN with Adirondack Bank that should have been listed under the heading "Status of Indebtedness".

Seems like a rather large debt for town officials to forget about in compiling the town's annual disclosure which is required under the Securities & Exchange Commission rules...clearly, the June 30, 2020 document states that the Town of New Hartford created the report...with assistance from Fiscal Advisors.  

According to the 2020 Supplement report filed on September 21, 2020, Fiscal Advisors now acknowledges that the total indebtedness of the Town of New Hartford as of June 30, 2020 is actually $17,119,560.  When compared to total debt of $9,318,291 at the end of 2017 prior to Miscione becoming supervisor; that is close to doubling the town's debt in three (3) years.

But not to worry, because according to Miscione, future generations will pay for the increased debt and besides, as Miscione always says...the town board unanimously voted for it!

Wednesday, September 23, 2020

More of the story...

Continuing on...

On December 13, 2019, town voucher was created for a dropping plow for $6,759.99.

Again, there are no signatures of any councilman approving the invoice so without minutes of town board meetings, it is impossible to know if the councilmen were aware of the purchase.  The voucher has the signature of a town official asserting that "The above services or materials were rendered or furnished to the municipality on the dates stated and the charges are true and correct."

Like the other items I presented in yesterday's blog, the purchase was paid with a check from the Capital Project Fund; this time dated Jan. 22, 2020.

The problem with this whole scenario is that the town board never voted on the bond resolution to purchase or pay for these items until December 18, 2019 and both of these purchases require a 30-day permissive referendum whereby any town resident can collect signatures to force this bonding to a mandatory vote.  Plus, I only FOILed a couple of items that were bonded; there may very well be more that fit into this scenario that were also part of the bonding resolution.

Regarding purchases made prior to the adoption of a bond resolution, the NYS Comptroller says in two separate audits of other towns:
“Bond and BAN proceeds may not be used to reimburse the Town for capital project expenditures made before the Board authorized the bonds to be issued.”

“The Board and the Supervisor are responsible for establishing internal controls to ensure that debt proceeds are spent in accordance with all legal requirements.”
From the NYS Comptroller's audit of the Town of Evans:
Expenditure Prior to Debt Issuance - We also found that bond proceeds totaling $150,000 were used to reimburse operating funds for expenditures that were made prior to the Board adopting the bond resolution authorizing the issuance of the debt. The Board adopted a bond resolution on June 4, 2008 authorizing the issuance of serial bonds in the amount of $465,000, which included $315,000 for vehicles and $150,000 for road reconstruction and repaving. However, the expenditures relating to the road project were paid in September 2007. Because the Town lacks authority to use the proceeds of bonds or BANs to reimburse itself for expenditures made prior to the adoption of the resolution authorizing the issuance of the bonds, the $150,000 must be restricted to pay debt service on the related obligations.”
That means that the money that was improperly used must be treated as operating expenses and come out of the appropriate budget accounts for the expenses incurred; not the proceeds of the bond.  The proceeds of the bond that would have been used if the purchases were properly made, will now have to be put in a reserve fund solely for the purpose of retiring the BAN debt.

In our case, the town hall roof repairs will now need to become a General Wholetown budget expense and either taxed in the 2021 General Wholetown budget or taken from the General Wholetown Fund Balance and the dropping plow cost must be taken from the Part town Highway budget or Part town Highway fund balance...or Miscione can use some of the money from the sale of the equipment that was just auctioned off to pay for the dropping plow.

Here is an excerpt from a booklet written by a member of Orrick, Harrington, & Sutcliffe, the town’s bond counsel:
“Both the LFL and the U.S. Treasury Regulations promulgated under Section 148 of the Code have specific rules regarding the reimbursement of previously expended available funds. Section 165.10 of the LFL provides that if there are funds of a municipality other than the proceeds of bonds, bond anticipation notes, capital notes and budget notes, and funds which, by law may be used only for stated purposes, which are not immediately required for the purpose or purposes for which the same were borrowed, raised or otherwise created, the Board may authorize the temporary use of such funds for the purpose or purposes for which an issue of bonds or capital notes has been authorized. Suitable records must be kept of the temporary diversion of such funds. Such funds are to be made again available to the municipality from the proceeds of such bonds or capital notes or from the proceeds of the sale of bond anticipation notes issued in anticipation of the sale of such bonds. Therefore, if a valid bond resolution is not in place (including any applicable referendum having successfully occurred) at the time available monies are advanced, they may not be reimbursed from later borrowing proceeds. Nevertheless, this practice continues to occur with some regularity. It can be the subject of criticism on audit by the Office of the State Comptroller. It is preferable to simply adopt a bond resolution prior to the temporary advance without borrowing the funds in the public markets, and, thus, without starting the PPU clock running.

The adoption of a bond resolution will also cover the municipality with regard to the federal bond reimbursement regulations. These regulations generally require a “statement of official intent” prior to temporary advances of available monies. A properly drafted bond resolution may serve as an official notice of intent to borrow under these Treasury Regulations as well as LFL Section 165.10.
The law firm of Smith, Gambrell & Russell, LP explains the IRS federal bond reimbursement regulations in plain English:
“The Internal Revenue Service has revised its regulations concerning the use of tax-exempt financing (bonds, notes and leases, referred to below generally as “bonds”) to reimburse expenditures made prior to the date of the financing. Under the new regulations, the proceeds of bonds may be allocated to a prior capital expenditure for a period of time after the expenditure is made, but only if a formal declaration of reasonable intention to reimburse the expenditure with the proceeds of a borrowing (a “declaration of official intent”) had been properly made within sixty (60) days after the date the expenditure was paid and certain other requirements, described below, are satisfied. Both governmental bonds and all private activity bonds are subject to these requirements."
Basically, if the town board planned to purchase items prior to adoption of a bonding resolution by using available town funds, they should have adopted a “Declaration of Official Intent”. 

Again, from Smith, Gambrell & Russell, LP, a proper declaration is:
Required Content of Declaration of Official Intent
A declaration of official intent must indicate that the bond user reasonably expects to reimburse the planned expenditures with the proceeds of a debt to be incurred. The declaration of official intent must generally describe the project for which the expenditure to be reimbursed is paid, such as “school building renovation,” “hospital equipment acquisition” or “highway capital improvement program,” and a state the maximum principal amount of debt expected to the issued for such purposes.
I never heard any town board Declaration of Official Intent being adopted by this town board prior to the expending of town funds for items that were purchased prior to adopting the bonding resolution. Since town board minutes are NOT available to the public, if a declaration resolution does exist and is provided to me, I will post it online, but I don't believe that to be the case.

Where did the money in the Capital Projects Fund Checking account come from since no BAN note paperwork was signed with Adirondack Bank until February 14, 2020?

There are two (2) possibilities:
Miscione used money leftover from the April 2018 bond resolution which have now been sold as serial bonds with debt due until 2042 for the purchase of the new town hall, Grange Hill project; Sangertown certiorari; etc.

If that is the case, the NYS Comptroller says:
New York State Local Finance Law requires the proceeds of bonds and bond anticipation notes (BANs) to be used solely for the object or purpose for which the debt was issued. When a project is complete, any residual bond or BAN proceeds must be applied to the payment of the debt service on that debt.”
So, in other words, the remaining February 2019 serial bond money is unavailable to use for anything other than the enumerated items in the April 2018 bond resolution. Any unused bond money after all the bonded items have been obtained and paid has to be used toward paying the debt service for that bond issue.

The other possibility:

Money was transferred to the Capital Projects checking account from another town budget line, for example the Sewer Fund. Like all the other borrowings between town funds that have been done without town board approval, that money would need to be paid back with interest, but not from the BAN monies.  It would have to be paid back from either an expense item in the 2021 budget or transferred from the appropriate fund balance.

In either case, the money that that was prematurely expended from other sources prior to the bond resolution for the BAN from Adirondack Bank on December 18, 2019 now has to be placed in a reserve account and only used to pay down the Adirondack BAN debt.

Bottom line, when the town purchases items for which they intend to use bonding, they need to be sure to adopt a bonding resolution PRIOR to making the purchases; otherwise, those purchases are recognized as operating expenses which cannot be bonded.

We have some real financial problems people. At the last town board meeting, Councilman Messa asked about the 2019 financial statements and Miscione said the auditors did not get there to start the financials until July because of COVID. If that is true, the question must be asked “Why were the auditors paid in full by the end of July if they didn’t start the audit until sometime in July?”  It also needs to be asked, "Why were you saying at each board meeting that you were meeting with the auditors on Friday to discuss when the audit could be released?"  One time when we called the town clerk asking for the 2019 audit, we were told that you were actually in a meeting with the auditors to decide when to release the audit. 

Where's the 2019 audit, Miscione?  Let's see if the auditors are willing to sign the 2019 audit as a "good" audit like you have been touting for the last several months.  Let's see if they noticed that you spent bond money before you even had the town board adopt the bonding resolution.

It would also appear that no one on the town board has the moxie to ask the right questions and get to the bottom of what is going on. Taxpayers deserve better from their elected officials. Someone needs to start talking and the NYS Comptroller needs to be called in to straighten out this whole mess that I have been blogging about for a few years now!

Where is the town he still on vacation?

To be continued...

Tuesday, September 22, 2020

What are you guys thinking???

As I looked though the last batch of documentation that I FOILed regarding the BAN through Adirondack Bank, I noticed some items that needed clarification, so I immediately FOILed account-specific information for some of the purchases associated with the $3.2+ million BAN money.

Unfortunately, my suspicions were correct; Miscione has some real problems with his management of “borrowed” money not only with the NYS Comptroller, but also Local Finance Law and the Internal Revenue Service.

There are many problems; let’s start with the first one…repair the roof on the new town hall.

According to the September 4, 2019 town board minutes there were two (2) town board resolutions adopted:
Reject Bids – Town Hall Roof Replacement

Upon recommendation of the Town Attorney, Councilman Reynolds introduced the following Resolution for adoption, seconded by Councilman Lenart:

(RESOLUTION NO. 291 OF 2019)
 RESOLVED, that the Town Board of the Town of New Hartford does hereby reject any and all bids received for the replacement of the Town Office Buildings roof, due to no prior Town Board authorization.

And then there was this one at the same town board meeting:

Authorization to Bid – Town Hall Roof Replacement
Upon recommendation of the Town Supervisor, Councilman Reynolds introduced the following Resolution for adoption, seconded by Councilman Lenart:
(RESOLUTION NO. 292 OF 2019)
RESOLVED, the Town Board does hereby authorize the bidding process to obtain quotes for a replacement roof at the Town Office Building, 8635 Clinton Street, New Hartford at the earliest possible date. 

Then, at the next town board meeting, September 18, 2019, the town board adopted:
BID Opening – Town Hall Roof Repair Re-bid

The Highway Superintendent read the Bid Opening results for the Town Hall Roof Repair. Four (4) bids were received on Tuesday, September 17, 2019:

 • Titan Roofing - $494,600.00; Deduct Alternate $5,000.00 
• Apple Roofing Corporation - $375,580.00; Deduct Alternate $3,000.00 
• E V Roofing & Construction Srv - $404,000.00; Deduct Alternate $6,900.00 
• J & B Installations - $430,000.00; Deduct Alternate $5,000.00. 

Thereafter, the following Resolution was introduced for adoption by Councilman Reynolds; seconded by Councilman :

(RESOLUTION NO. 301 OF 2019)
RESOLVED, that the New Hartford Town Board does hereby accept the low bid submitted for the Town Hall roof repair project, by Apple Roofing Corporation in the amount of $375,580, and does further award the contract on this project to said Apple Roofing Corporation. The Town Supervisor is hereby authorized and directed to execute all documents required including the Letter of Intent.
According to the documents I FOILed, on 8/22/19, a voucher and invoice were submitted by GYMO, a firm presumably hired by the town board; however, there was no mention of hiring the firm in town board minutes, nor was there a RFP adopted at any town board meeting as is required for Professional Services.

At any rate, the voucher was for $6,800 allegedly "for bid package – roofing". 

On 11/20/19, a check was made out to GYMO from the Capital Project Checking Account noted as HRR1620.40 on the town’s voucher dated 8/22/19.  The payment was approved per Paul Miscione. Since none of the town board members signed the invoice as evidence off their audit of the bills, it is uncertain if any of them saw the invoice and authorized payment.  Plus, there are no town board minutes available for town board meetings after October 16, 2019 so it is also impossible to ascertain if this invoice was among the invoices authorized to be paid.

On October 31, 2019, an “Application & Certificate for Payment and a voucher were presented for payment by Apple Roofing for the “roofing project”.

On November 6, 2019, a check was made out to Apple Roofing Corp. paid from account "Capital Project Funding" in the amount of $172,605.  Again, no idea if the town board audited and approved payment to Apple Roofing Corp because there are no town board minutes available.

On November 11/20/19, an “Application & Certificate for Payment in the amount of $165,416 from Apple Roof Corp. was presented to the town.

On November 27, 2019, an additional invoice was submitted to town by Apple Roofing Corp. in the amount of $37,558 for a total of $202,974.40.  

On January 14, 2020, Paul Miscione authorized the payment of $202,974.40 to Apple Roofing Corp.  Again, no idea if the town board audited and approved any of the above payments to Apple Roofing Corp because there are no town board minutes available.

End of story?

Goodness, NO…it’s just the beginning! If I were on the town board, I would start asking questions a.s.a.p. (actually, I would have started asking some serious questions long before this!) Probably should also ask the town attorney what the problem might be….


...just do the usual, sit and wait and I will be posting again in a day or two.

All the copies of the above can be viewed and/or downloaded here!

To be continued…

Thursday, September 17, 2020

Sale of Highway Equipment...good to know!!

There is a lot more to running a town than conducting town hall meetings.

There are the laws of the State of New York that must be taken into account prior to taking action.

Hopefully, our CEO/Supervisor Miscione, knows Highway Law as it relates to selling highway equipment that does not have any outstanding debt attached to it.

But just in case he or anyone else is interested, I decided to provide a couple of excerpts from Cornell Local Roads Program that might be "good to know" for future reference!

Although, I am not specifically addressing purchasing highway equipment, I decided to include Highway Law regarding the entire process from start to finish...buying equipment to the use of proceeds after the sale of the equipment.

On page 89 of Cornell's manual, it states:
Highway Law §142(1)(a) provides that:

The town Superintendent [of Highways] may, with the approval of the Town Board, purchase equipment, tools and other implements to be used for highway maintenance, construction and reconstruction, snow plows or other devices for the removal of snow from the highway moneys appropriated for that purpose. The Town Board may authorize the town Superintendent to purchase equipment, tools and implements without prior approval in an amount or amounts to be fixed, from time to time, by the board.”
As far as a later sale of these items of highway equipment, a sale is authorized by the town Superintendent of Highways, but Town Board approval must be obtained (Highway Law §142[5]).
The sale can be accomplished under any method as no particular method of sale is fixed by this statute. Unless a local law exists detailing the sale procedure, any method of sale which will likely bring the best price may be used - a sale by auction, private negotiation or competitive bidding (c.f., Merritt Meridian Constr. Corp. v. Gallagher, 96 A.D. 2nd 933, 934 (2nd Dept. 1983). However, the town has a fiduciary duty to secure the best price obtainable in its judgment (Matter of Ross v. Wilson, 308 N.Y. 605 (1955).
Pretty basic stuff that is the usual process for the purchase and sale of highway equipment in New Hartford.  I am sure that everyone is familiar with this section of the law.

However, here's the important part that the finance person needs to know...again from Cornell:
The sale proceeds must be used to purchase highway equipment (see Highway Law §142[5]; §271[3]; §141[3]).
Here is the actual Highway Law §142[5]:
5. The town superintendent may also, with the approval of the town board, sell any such machinery, tools, implements and equipment, which are no longer needed by the town, or which are worn out or obsolete, or may exchange the same or surrender it to the vendor as part payment for new machinery, tools, implements and equipment.  If sold, the proceeds shall, under the direction of the town board, be applicable to the purchase of the machinery, tools, implements and equipment mentioned in subdivision three of section two hundred seventy-one of this chapter.
So, the money from a sale of highway equipment cannot be used to offset budgeted highway expenses for other than the purchase of new highway equipment, it cannot be used to offset other highway budget lines; or applied to the highway fund balance; or used to offset shortfalls in any other funds.

That's the law...

Wednesday, September 16, 2020

Here come the law...


While I have written to Miscione several times (and I am sure Cully has been privy to all my emails) regarding the sale of bonded equipment and/or funds received from federal and/or state grants, it is very probable that they don't believe what I say (or maybe they just don't care what I say...whatever!). 

Perhaps, if I cite a page from a 2015 project of NY Conference of Mayors (NYSCOM), they will heed my advice.

While NYSCOM's handbook refers to villages, General Municipal Law which is referenced in this section applies to all municipalities; towns, villages, schools, etc.  Therefore, the law applies not only to villages, but also to the Town of New Hartford, NY.

So, here we go...from page 163 SECTION 15.16 of a handbook prepared by New York State Conference of Mayors and Municipal Officials in 2015:
Mandatory Reserve Fund Creation and Use.

Pursuant to General Municipal Law § 6-l, a mandatory reserve fund must be established by the board of trustees upon the cash sale by the village of a capital improvement (as defined in Section 6-c) which had been purchased through the issuance of obligations pursuant to the Local Finance Law, when all or part of the indebtedness is outstanding at the time of the sale.

Additionally, any State or federal aid received on account of the capital improvement, after the sale of such an improvement, must be deposited in the mandatory reserve fund to the extent it is not required to be applied to retire indebtedness issued in anticipation of such aid. 
Referendum. There are no referendum requirements.

Source of Funds. Under the circumstances discussed above, proceeds from the sale of a capital improvement, or State and federal aid received on account of a capital improvement, are paid into the fund.

Use of Fund Balances. If the proceeds from the sale and such State or federal aid received exceed the aggregate amount of principal (not including interest) due on the outstanding obligations, the excess may be used for any lawful village purpose.
What this means is that besides consulting with bond counsel, if a piece of equipment is sold and it still has outstanding principal debt, the money cannot be used for any other town purpose other than to retire said debt on that particular piece of equipment.

So...if perchance, let's just say a piece of equipment that still had outstanding debt was currently being sold, the town board would need to adopt a resolution at the next town board meeting to create a Mandatory Reserve Fund to hold the proceeds of the sale.  

Since the town supervisor has stretched out the debt payments until 2042 and he cannot make a lump sum payment to retire the debt until at least 2027 which is the first call date of the bond issue, that reserve fund money would need to be accounted for in town financials until the debt was paid in full or the entire proceeds were expended, whichever comes first..

In the case of equipment purchased with state/federal grants, as soon as the money is received from the state/federal government, it must be held in another separate Mandatory Reserve account for each item purchased by monies received from the grant and only spent to pay down the outstanding debt on each particular equipment purchase that was bonded to meet the criteria of the grant.

Each piece of equipment that is sold or obtained by a state or federal grant must be accounted for in a separate mandatory reserve fund.  Plus, those mandatory reserves should show up as a source of revenue in every adopted budget thereafter until the debt is retired starting with the 2021 budget...that is, if the equipment was actually being sold right now.

Just saying, my friends.  It's the law...according to NYSCOM!