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Thursday, September 10, 2020

Having a Pinocchio moment are we, Supervisor??

According to this past Sunday’s Observer Dispatch, it would appear that more bonding may very well be part of Miscione's proposed 2021 budget.

In an article titled, "Improvements continue at NH recreation Center", Miscione says:
“Proposed renovations for next year include addressing the locker room, including the flooring; fixing the HVAC system and redoing the roof, which has some leaks, Miscione said.”
“The town plans to sell advertising in the area, Miscione said.”
Miscione actually knows the rules for selling advertising because that is one of the items he had me research regarding his "plans" for upgrading the Rec Center.

On August 15, 2019, I sent him an email making it clear that selling advertising to pay for upgrades to the Rec Center would be prohibited. I even sent him some of my research papers of which I have many.

A brochure from the NYS Tug Hill Commission states:
"Municipalities May Not Solicit Gifts or Conduct Fundraising Activities"
"There is no authority for a municipality to solicit monetary or material gifts, either by advertisement or otherwise. Nor may they conduct fundraising activities. According to Office of the State Comptroller opinions No. 74-1102, 1974, and No. 77-292, 1977, such activity would be contrary to public policy and, therefore, not a proper municipal function."
The Commission further includes a passage from an Office of State Comptroller workshop handout dated 3/29/00
"Absent express statutory authority, municipalities generally may not undertake fund-raising activities, including the solicitation of gifts. Fund-raising activities undertaken to benefit a municipality should be directed and administered by individuals in their private capacities or by community groups not affiliated with the municipality. In turn, these private individuals or groups may make donations to the municipality. Municipalities are generally authorized to accept gifts of real and personal property to be used for proper municipal purposes. Gifts generally may be accepted on the condition that they be used for a specified municipal purpose so long as the condition does not require the local officials to surrender or renounce their powers and duties. Once accepted by the appropriate municipal official or body (usually the governing board), monies generally must be transmitted to the chief fiscal officer. These funds constitute municipal monies and, accordingly, expenditure of these monies is generally subject to the same statutory requirements (e.g. budgetary appropriation, audit of claims, competitive bidding) as other municipal revenues. ()"
Most articles I have found mention the NYS Constitution Gifts and Loans clause along with a 1973 opinion from the then-Attorney General Louis J. Lefkowitz who wrote in an informal opinion,
“no municipality may engage in the private business of advertising or allow its building or property to be used for advertising purposes.”
New York’s Constitution Section 8 (1), commonly known as the Gifts & Loans clause, says:
 “No county, city, town, village or school district shall give or loan any money or property to or in aid of any individual, or private corporation or association, or private undertaking…” 
Since the 2010-11 legislative session, bills have been introduced almost every year to change General Municipal Law regarding naming rights and/or advertising on government property. To date, no legislation has made it out of committee let alone been brought to the floor for a vote.

To further the problem...


Even if by some "miracle" a law was signed in 2021 to allow for advertising in government buildings, Miscione has other problems; one is the same as the one he had when he thought he could lease out “unneeded” space at the 50,000 sq. ft. new town hall to help with paying the annual bond payments.

Miscione has already bonded to pay for some of the upgrades to the Rec Center and apparently plans to bond additional monies to finish the project.

When a government uses tax-exempt bonds as financing for purchasing or renovating government property, any plans to lease that public property or any part of it while the debt is still outstanding requires some legal opinions as to whether or not said lease(s) will affect the tax-exempt status of the outstanding bonds. If the leased property is considered to be a private business use; meaning it does not serve a public purpose, the IRS can force the town to change their current tax-exempt bonds to taxable which could have a detrimental effect on the town.

From an article written by Orrick, Herrington & Sutcliffe LLP:
"The Internal Revenue Service (the "IRS") has taken the position, in some situations, that private business use of a bond financed facility may arise without any possessory rights to the use of such facility."
I would also caution the town to look into whether NYS Sales Tax would be required to be collected and remitted for advertising "sales".

A Guide to Sales Tax in New York State for Exempt Organizations
states:
"Sales by United States governmental entities of tangible personal property or services that are ordinarily sold by private persons are subject to sales tax."
When it comes to “selling” in or on municipal property, Miscione would do well to consult with competent legal and financial professionals instead of relying on himself or town staff.  Contrary to what Miscione may think...he does not know everything!

He would also do well to include the town board in his findings and make those findings public prior to asking the town board to adopt another bonding resolution if it were to rely on pursuing an advertising campaign to pay the debt. 

It might also help if he were to provide the town board with monthly financials that do not appear to be phony!

Miscione's power only comes from the affirmative vote of a majority of the town board!  The town board should keep that in mind!




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