Oh what a tangled web we weave...Part 2

Next, let’s take a look at bonding that has been done for some of the stormwater projects.

Let’s start with $490,000 for Mud Creek drainage project which was part of town board resolution dated September 8, 2021 and also part of the $9,000,000 serial bond resolutions of 2022. Bond members unanimously adopted the resolution 2021 resolution.

Legal Notice in the Observer Dispatch reads:

RESOLUTION AUTHOR I Z I NG IMPROVEMENTS TO THE MUD CREEK DRAINAGE BASIN IN AND FOR THE TOWN OF NEW HARTFORD, ONEIDA COUNTY, NEWYORK, AT A MAXIMUM ESTIMATED COST OF $1,000,000 AND AUTHORIZING, SUBJECT TO PERMISSIVE REFERENDUM, THE ISSUANCE OF $490,000 BONDS OF SAID TOWN TO PAY PART OF THE COST THEREOF. The period of probable usefulness of such class of objects or purposes is 40 years pursuant to subdivision 4 of paragraph a of Section 11.00 of the Local Finance Law.

About a week after the town board adopted the bond resolution, an article appeared in the Observer Dispatch:

New Hartford is working on 5 stormwater projects following Sauquoit Creek flooding study New Hartford combats stormwater problems that lead to flooding

In the September 17, 2021, article written by Edward Harris, the Mud Creek drainage project was expected to begin in the Spring of 2022.

The article further states:

"Miscione said this project includes $1.3 million from the county and $490,000 of in-kind services. Miscione further stated the project would have likely cost close to $500,000 if the town was not handling it itself."

Crazy that...the in-kind services for this bond are for the exact amount that was adopted by the town board at the September 7, 2021 town board meeting and almost exactly what Miscione estimated the cost would be to the town without the in-kind services.

Here’s the problem…

A municipality cannot bond for in-kind services because all bonding requires that there be a Probable Period of Usefulness (PPU) which as required under the NYS Local Finance Law Section 11.

"A municipality, school district or district corporation may not contract indebtedness for any object or purpose for a period longer than the period of probable usefulness set forth below for such object or purpose"

NYS Local Finance Law does not include a PPU for in-kind services which are presumably work done by town employees.

Why should there be bonding to pay town employees; their salaries are included as an expense listed in the town’s annual budget and paid each year by NYS Sales Tax revenue??

According to law, when composing a bonding resolution, one has to estimate the total cost of the project and from that subtract the amount of any donations, gifts and/or grants, and any in-kind services. What is left is bondable as long as it falls under one of the PPU categories in Local Finance Law 11.

Apparently, according to this news article, Miscione didn't even need to bond for the project after all!!

The news article further states:

"Most of the projects include in-kind services, which fall under the discretion of New Hartford Highway Superintendent Richard Sherman."

I do recall that on a recent “Talk of the Town” radio show Miscione said that most of the work is done in-house to save taxpayers money.

Excuse me, but where are the taxpayers saving money when you are bonding for items that don’t need to be bonded???

Several other stormwater and drainage bonds have been adopted by the town board. So how many other bonded stormwater projects include in-kind services?

The $9,000,000 bond also included $40,000 for stormwater improvements on Foxcroft. I can attest to the fact that the work was done by town employees. There have been several other bond resolutions for stormwater work. Is the work all being done in-house?

How come we never hear about any bidding for these projects prior to borrowing the money?

What other town projects have been bonded using "in-kind services" with town employees doing the work??

Are they in fact all being done by town employees???

So, if the town didn't need the money for the project, what is the money really being used for???

Let me share a paragraph from the town’s bond counsel…Orrick’s Bond Basics for Towns:

"Proceeds of a borrowing pursuant to a bond resolution may never be legally used for any other purpose than that described in the bond resolution. Once borrowed, no reallocation to some other purpose is permissible; the only permissible use of such borrowed proceeds, if not used for the project as described, is to pay down debt service on the debt obligation under which the money was borrowed."

One thought is that paying Highway workers from the bond frees up sales tax revenue.

NYS Sales Tax Law requires that all town expenses first be covered by collected sales tax revenue; thus why our town has no town highway tax.

Next, sales tax revenue has to be applied to part-town expenses and any leftover monies can be used to offset General Wholetown taxes.

Unfortunately, using BOND MONEY to offset town employee expenses, i.e., wages is illegal.

Or, is there another explanation of how the money is illegally being used??

I would argue that Miscione and the town board owe taxpayers an explanation.  

Stay tuned...Part 3 tomorrow!