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Apr 22, 2015 10:44 AMPublication: The Southampton Press

Southampton Trustees Will Use Town Accountants

Apr 22, 2015 10:44 AM

The Southampton Town Trustees on Monday resolved, in a split 3-2 vote, to contract with Southampton Town Comptroller Len Marchese’s office to oversee their financial accounts and purchasing practices.

The three Trustees who voted in favor of the move—Ed Warner Jr., Scott Horowitz and Ray Overton—said that the arrangement will maintain the Trustees’ long-held independence from the town government but increase the transparency of the Trustees’ management of taxpayer funds, Trustee fee revenues and spending.

The move was opposed by Trustees Eric Shultz and Bill Pell.

The agreement would give the comptroller’s office control of the Trustees’ bank accounts and checkbooks, and would advise the board on bidding and purchasing practices. The Town Board, under the agreement, will not have any permissive role in the Trustees’ financial management.

The five-year agreement starts with a one-year trial period, at no cost to the Trustees. After that, the Trustees would pay the town $10,000 per year to have the comptroller’s office staff handle the accounting work. Annual audits will continue to be done independently by an outside firm of the Trustees’ choosing.

“I think this will free up a lot of time for our executive secretary to do other work,” Mr. Warner, the board’s president, said on Monday. “It’s going to make us more streamlined … and professional looking to the public.”

But Mr. Shultz, the board’s longest serving member, said he worried the agreement could be a potential threat to the Trustees’ independence, particularly in the context of a court fight that briefly appeared to give full control of the Trustees’ finances to the Town Board a year ago.

“As I’ve said before, I have grave concerns over allowing the town comptroller to have any hand in our finances,” Mr. Shultz said. “We’re going in a dangerous direction. I’ve been trying to get this board as independent as possible in terms of getting away from the Town Board.”

Mr. Shultz said that the Trustees’ independent legal counsel, Richard Cahn, has expressed fears that contracting with the town could hurt the Trustees’ case in a lawsuit challenging their right to maintain independent control of their financial accounts.

Assistant Town Attorney Kara Bak said that under the agreement, the Trustees are acknowledged to be an independent “body politic” that is entering into an agreement with the town comptroller’s office, as an employee, to assist with the Trustees’ accounting, bidding and procurement records.

“The Trustees are not doing this because anything they did in the past was wrong,” Ms. Bak said.

Mr. Horowitz said that he saw the agreement as strengthening the position of the Trustees by removing any doubts about unaccounted-for spending or revenues.

“In my view, we’re recognizing and strengthening the Board of Trustees because we’re applying the highest level of accountability and transparency and fiscal responsibility,” said Mr. Horowitz, a first-term member of the board. “There will be many challenges moving forward. I think it makes sense to have our funds handled this way … so when there are challenges, there are no questions or problems.”

Last January, a state judge issued a ruling in a lawsuit filed against the Trustees and the Town Board by residents of West Hampton Dunes Village that said the Trustees should be considered a division of the town government and that the Town Board should have full control of its finances and checkbooks. The ruling even raised the possibility that individual members of the Trustees could be charged with official impropriety for expenditures that did not comply with municipal financial disclosure requirements.

The ruling was stayed when the Trustees filed an appeal, which is pending.

The Trustees are embroiled in two other lawsuits with West Hampton Dunes, its mayor and some of its residents, and the lawsuit over who should control the financial accounts was widely seen as an attempt to cut off their funding for the legal battles.

If the Town Board were to have a voice in the Trustees’ spending, Mr. Shultz has warned, politics and power brokering by wealthy property owners would inhibit the Trustees’ ability to mount a legal defense of their centuries-old authority.

“This lawsuit has to do with a group of people who want us to be under the control of the Town Board,” he said on Monday. “I’m going on the history of problems we’ve had with the town.”

The Trustees have clashed in recent years with the Town Board, particularly Supervisor Anna Throne-Holst, over budgeting provided by the town from the tax levy. The Trustees cannot levy taxes on town residents on their own, so the board receives an annual operating budget appropriation—$678,000 in 2015—from the town, set by the Town Board. The Trustees also raise their own revenues from permit fees and, in recent years, from the sale of sand dredged out of coastal ponds under their control for use in rebuilding ocean dunes.

Mr. Shultz has said that he fears town oversight of the Trustees’ revenues will lead to the Town Board constraining the Trustees’ tax-funded budgets, which could jeopardize the Trustees’ position of independence.

Mr. Horowitz dismissed the concerns as overwrought. “This is about fiscal prudence, transparency and accountability,” he said. “I fully recognize the importance that this town have a strong Board of Trustees.”

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Vote was along straight party lines. Coincidence?

Why would the 3 Republican Trustees want to get in bed with the Town Board? Only 2 registered GOP votes on Town Board, but no prizes for guessing where the 3rd vote would come from.
By Turkey Bridge (1979), Quiogue on Apr 22, 15 1:05 PM
1 member liked this comment
Because the three repub trustees want to be on the town board and its time to start kissing the queens feet
By CaptainSig (716), Dutch Harbor on Apr 25, 15 7:06 AM
Well only one registered Dem there George. And the rumored not so secret plan is to let the Indy Party Supervisor have the race this year by running on token opposition (perhaps someone with an outside full time job even) and in two years a certain current female Rep Board member will run for the open seat in the Supervisor race.

Of course, that's just a rumor.

But two years travels fast.

Perhaps the Dems will not endorse a non-Democrat for Supervisor this year and make ...more
By NTiger (543), Southampton on Apr 22, 15 4:44 PM
2 members liked this comment
And with a little luck it will be none of the above nonsense and none of the usual suspects. Perhaps a person totally unconnected to these self-serving partisan political machines will emerge who just wants to help lead the town and its people forward - a new direction for this town.
By VOS (1241), WHB on Apr 22, 15 4:49 PM
1 member liked this comment
Horowitz is using his position as a stepping stone towards higher political office and is not acting in the Trustees' best interest, but kissing some Party butt, watch this weasel. I am surprised and disappointed in Ed's going along with this idea. Our Trustees need to remain completely and wholly separate from the Town Board , their independence is their power, without the Trustees our great Town will quickly resemble some UTI town without the right to access OUR BEACHES AND RESOURCES , a right ...more
By bigfresh (4666), north sea on Apr 22, 15 4:49 PM
Horowitz needs a stepping stone to drink from a water fountain
By CaptainSig (716), Dutch Harbor on Apr 25, 15 7:11 AM
With their surrender of control of their finances, the Quislings on the Board of Trustees have crippled the only elected body that has heretofore contested the paving of Southampton by Anna Throne-Holst, her Republican colleagues, and her construction industry patrons.

Hereafter, their only function will be to dress up in period costumes for parades in reminiscence of their former relevance.

By highhatsize (4217), East Quogue on Apr 23, 15 6:43 AM
3 members liked this comment
I am sure that Ed Sr. Is looking down and not happy.
By Resident tax (186), Hampton bays ny on Apr 23, 15 5:53 PM
1 member liked this comment
Big fresh is All Wrong. The recent court rulings combined with the operating practices put in place by the current board majority will make the Board of Trustees a much stronger board. Bolster their independence. A benefit to the Freeholders from every aspect. Having true accountability and transparency, combined with a mechanism to assure compliance with general municipal law is a great thing to have in place, especially when you know you are under scrutiny. If Big fresh really cared about public ...more
By 007 (45), East Quogue on Sep 30, 15 6:36 AM