Seneca Allegany Casino in Salamanca, NY

As the Seneca Nation of Indians and New York State negotiate a new gaming compact, State Senator George Borrello has introduced legislation to authorize the State Comptroller to review tribal-state compacts.

The legislation would authorize the Comptroller to recommend approval or needed changes.

With the compact set to expire at the end of 2023, the Seneca Nation has been pushing to get a new compact signed before the state legislature’s session ends on June 8.

Borrello cited the need for this change by pointing to current negotiations between the Seneca Nation and the Hochul administration. He noted that although the Governor has recused herself from compact negotiations because of the conflict of interest presented by her husband’s position with a company in competition with the Seneca Nation, she is still the only official that can approve the contract.

The original Seneca Nation Compact was authorized in 2002. The agreement cleared the way for the development of three Seneca casinos in Western New York. The Seneca Niagara Casino opened in 2002, followed by the Salamanca location in 2004 and the Buffalo location in 2007. Terms of the compact included the Seneca Nation paying 25%, which is approximately $100 million a year, of the slot and video lottery machine revenues to the state, with a portion of that directed to each casino’s host city. In return, the compact grants the Nation exclusive rights to operate Class III casinos in Western New York.

The casinos and their related businesses have an estimated $1 billion annual economic impact on Western New York and provide more than 6,000 jobs.

State Comptroller

An audit released by the Comptroller’s office states that a change in collection agencies resulted in a lapse in collections from Sept 2020 until July 2021. $119.3 million in uncollected fees are owed from vehicles registered out of New York State.

Tolls and related fees make up more than 90% of the Thruway’s revenue. In 2021, the Thruway collected $804 million from tolls and related fees.

The report also cited that the Thruway Authority halting the registration suspension program in January 2018 to make way for the Thruway’s new cashless tolling program and the rejection of license plate images that were identifiable and billable as reasons for lost revenue.

Recommendations made by the Comptroller include a smoother transition in collection agencies – should the Thruway Authority require such methods again – and ensuring that rejected images that are found to be incorrectly rejected are billed.

Read the full report here: https://www.osc.state.ny.us/press/releases/2023/05/dinapoli-thruway-authority-owed-more-275-million-unpaid-tolls-and-fees

Jamestown Human Rights Commission meeting (May 10, 2023)

The Jamestown Human Rights Commission will begin work on creating policies and procedures for handling complaints.

Commission Member Isaiah Rashad said his understanding is that complaints would first go to HRC Chair Uvie Stewart and then to the City’s Liaison Police Captain Scott Forester, “What I’m proposing is to create from scratch a Policy and Procedures form of how we are to conduct our investigation, and where that information goes step-by-step, so that we are uniform, and that we look professional in everything that we’re doing to the public.”

Rashad also recommended that members of the HRC begin attending various public meetings again, “There’s a lot that we don’t know, especially as a small group. There’s a lot that we do not know. We only hear things as people bring it to us. But, if we’re out there, if we’re putting ourselves out there and we’re going to these meetings, we’ll understand a lot more about what’s ebbing and flowing throughout the city. And it’s important for us because when there’s chaos, that’s when people need us. And we need to make sure we’re prepared.”

Rashad was given the approval to move ahead with developing the polices and procedures form for complaints. The group also agreed they need to assign members to attend various public meetings including City Council, Jamestown School Board, the IDEA Coalition, and more.

The group also discussed holding fundraisers to raise money for the commission to supplement what is received in the City Budget. However, according to the State Office of the Comptroller, municipalities may not solicit monetary or material gifts nor conduct fundraising activities. The commission was allocated $6,000 in the 2023 city budget.

Tom DiNapoli

New York State collected $2.9 billion more in tax income in 2022 than forecasted, but still made less than in 2021.

State Comptroller Tom DiNapoli released a report Monday that had tax collections for the last fiscal year totaling $111.7 billion. This is higher than what the Division of Budget forecasted but $9.5 billion lower than the 2021-22 budget year.

DiNapoli said the decline was primarily due to a decline in Personal Income Tax (PIT) receipts resulting from a variety of factors including: a decline in year-end bonuses in the financial services industry, claiming of credits related to the Pass-Through Entity Tax (PTET), the acceleration of the final phase-in of the middle-class tax rate cuts, and financial market volatility over the course of 2022.

Sales tax collections totaled $20.6 billion, exceeding the prior year total by $964 million or 4.9%. Business tax collections totaled $28.6 billion which was $891.8 million higher than the previous year, reflecting a 24.6% increase.

He said that state policy makers should ensure that the state budget committs additional resources to the state’s reserve funds to improve long-term financial stability.

DiNapoli said, “While tax collections have exceeded projections, they were considerably lower than last year. Although easing, inflation continues to present challenges to economic growth. State policy makers should ensure that the enacted budget for State Fiscal Year 2023-24 commits additional resources to the state’s reserve funds to improve long-term financial stability.”

The report is being released as a state budget for the current fiscal year remains unresolved.

Grant Manager Tim O’Dell presents on business grant fund to the Jamestown Local Development Corporation board. (January 18, 2023)

Jamestown Mayor Eddie Sundquist says the city is continuing to look into possible violations of conflict of interest laws, due to the Jamestown Local Development Corporation awarding grant moneys to sitting board members, including one who also sits on the city council.

As WRFA first reported on Wednesday, the JLDC board appears to have violated its own by-laws by awarding federal funding from the American Rescue Plan Act to its own members to assist their personal business interests.

The businesses in question included a $64,000 grant to It’s Your Day wedding planning service from the JLDC’s Building Acquisition & Business Expansion program. It’s Your Day is owned and operated by the wife of city councilman and JLDC board member Jeff Russell. The other business was Jamestown Skate Products, which received a $15,000 grant from Downtown Small Business Evolution program. That business is owned and operated by JLDC board member Pete Scheira. A third violation may have also occurred when JLDC board member Luke Fodor, an employee of St. Luke’s Episcopal Church, applied for and was awarded a $9,500 downtown programming grant for a fundraising concert for the church, scheduled for later this month.

In all three instances, the board members in question either recused themselves or did not attend the voting session. However, the JLDC by-laws are clear in stating that no funding will be awarded to any business where a board member owns a material interest.

Not only did the awards appear to violate JLDC by-laws, but also state conflict of interest rules for municipal officers, and potentially federal rules as well.

The city claims it was aware of the language in the JLDC bylaws, but felt they didn’t apply to grant awards related to ARPA funding since JLDC was only serving as a pass-through agency for that money.

In a statement released Thursday morning, the mayor said all grant awards related to ARPA were made under the knowledge that they were appropriate and legal under state and federal law, and if there are any discrepancies, or actions contrary to state or federal law, the city will work to rectify those issues as soon as possible.

Sundquist also claimed the awarding of the funds were done in “a transparent and public process.” However, while the votes were done in a public setting, they were not 100% transparent.
When it came time for the JLDC board to award the grants in question, there was no advanced notice given to the public, including no mention of the businesses on the official meeting agenda, which does not appear on the city website and is only sent out to media.

Additionally, the official minutes for the respective meetings don’t provide any details on which businesses were awarded funding.

As Sundquist and his staff continue to look into the matter, the New York State Comptroller’s office has informed WRFA it is aware of the situation and is monitoring it as well.

The JLDC Board of Directors during its most recent meeting in February. The JLDC is comprised of elected city officials and community stakeholders and is considered the economic development lending arm of the city.

JAMESTOWN – Last year the Jamestown Local Development Corporation (JLDC) became one of the most powerful government agencies in Chautauqua County when the city of Jamestown charged its board with appropriating nearly $9 million in federal American Rescue Plan Act (ARPA) moneys aimed at economic development, primarily to assist businesses and organizations impacted by the COVID-19 Pandemic. Another $2.9 million in ARPA funds was appropriated to JLDC to assist with residential property improvements and to also update city code.

• REVIEW ALL CITY ARPA SPENDING TO DATE

All that funding is also required to be spent in a relatively short period of time – just under four years and counting. As a result the JLDC is busier now compared to any other time in the 40+ years of its existence.

But in the haste of getting millions of dollars out the door the JLDC board appears to have run afoul of its own bylaws by awarding moneys to businesses directly connected to two of its members.

Jeffery Russell

One of those businesses is It’s Your Day wedding planning service which received a $64,000 grant from the JLDC Building Acquisition & Business Expansion program, funded by ARPA money. The owner of that business is the wife of JLDC Board Member Jeffrey Russell, who also serves on the Jamestown City Council. Russell joined the JLDC board at the start of 2022.

The other business is Jamestown Skate Products. That business is owned by JLDC Board Member Pete Schiera, who was appointed to the board as a city at-large representative in 2020. Jamestown Skate Products received a $15,000 grant through the JLDC Downtown Small Business Evolution program, also funded with city ARPA money.

In both instances, neither Russell or Scheira voted when it was time to award the money for their respective business interests. In fact, neither was in attendance for the respective voting session when the awarding of the money took place. However, JLDC bylaws – which govern how the corporation must function – prohibit the awarding of loans or grants for any business in which a sitting board member (or immediate family member) owns a material interest (Article VII, Section 5).

WRFA looked into the matter and spoke with Jamestown Mayor Eddie Sundquist, who serves as JLDC board president. He was joined by city development director Crystal Surdyk. The two explained that their interpretation of the law is that the JLDC bylaws only apply in situations when JLDC awards grants or loans from its own funding pool. But because JLDC is only serving as a pass-through agency to administer the city’s ARPA money, the bylaws do not apply. Instead, any business can qualify so long as any board member with a conflict of interest recuses himself or herself from the vote.

That explanation was verified by Russell, who informed WRFA via email that he was told that his wife’s business could still apply for funding, as long as he didn’t vote on the matter.

“Like so many other businesses during Covid my spouse’s was decimated by the mandatory shut downs for those deemed to be non essential,” Russell explained. “Upon submission of her application for ARPA funds I asked for an opinion on the matter. I was advised that the ARPA funds are NOT JLDC funds directly and JLDC is acting as a pass through in the allocation of the funds. I was advised she could apply, but I must recuse myself during the voting session.”

Schiera also explained to WRFA that he was unaware of the stipulation in the bylaws and that it didn’t come up during his application process. Again, he was informed that as long as he recused himself, there was no conflict of interest or impropriety.

While it is true that Jamestown City Council authorized JLDC to administer the ARPA money as a pass-through agency, the same can be said for other federal moneys administered by JLDC, including the federal Urban Development Action Grant, awarded to the city decades ago. In that case, the money was also presented to the city of Jamestown, which authorized JLDC to utilize it as part of its low-interest revolving loan fund for businesses. Whenever money from that fund is appropriated by the JLDC board, it’s required to follow the rules of its bylaws.

Also worth noting is that while the JLDC ignored the bylaws when it came to voting on funds for its own members, it followed the bylaws when it came time to appropriate ARPA funds over $100,000 – which require final city council review and approval.

WRFA did reach out to city attorney Elliot Raimondo via email and asked what the basis was for city’s interpretation that no bylaw violation took place, but he did not respond.

Beyond the likely violation its own bylaws, the JLDC board may have also violated Article 18 of the State General Municipal Law, which prohibits municipal officers from receiving public money they oversee and that “there are no exceptions for when an individual discloses his or her interest, recuses him or herself or abstains from the discussion or vote on a matter.”

There’s also the question of if the awards violated federal law, if the terms of the grant award includes language similar to what is in state law.

There was also a third award of ARPA funding that also created a conflict of interest with a board member. During its most recent meeting, the JLDC unanimously approved a $9,500 grant for a fundraising concert at St. Luke’s Episcopal Church. That funding came from the JLDC Downtown Programming & Events program. Luke Fodor is a JLDC board member and also an employee of the church. When it came time to vote on the project, Fodor recused himself. City officials again contend that was all that was required, especially since Fodor doesn’t own any material interest in the church. But city property owner Tom Andolora recently voiced his disapproval of the matter during this week’s council meeting, via a letter that was read out loud by the city clerk.

“How is it possible that a member of the board can sit there, while the rest of the members vote to benefit the organization he leads? Of course Luke recused himself from the vote. Do the rest of you who are on the JLDC board understand how this looks?”, Andalora asked. “How is it possible that a member of the board can be so brazen as to fill out and sign an application himself? This goes beyond ‘conflict of interest’.”

WRFA did speak with other JLDC board members and asked if they were aware of the bylaw provision that disqualified them from receiving public money they oversee. Council president Tony Dolce, who has a seat on the JLDC board, said he was told a recusal was all that was necessary to avoid conflict of interest. When asked if the bylaws were ever brought up, he said they had not.

WRFA also reached out to Councilwoman and 2023 mayoral candidate Kim Ecklund for this story but she was unavailable for comment. Ecklund also has a seat at the JLDC table because she is the council’s finance chair.

WRFA did seek out opinions on the matter from state agencies. The State Authorities Budget Office – which is responsible for making public authorities more accountable – said it could not issue a formal legal opinion on the matter, but did say they do accept complaints for public authorities like JLDC, and do review and investigate those complaints as they come in. The State Comptrollers Office indicated it was aware of the situation and was monitoring, but had no other comment at this time.

Kevin Whitaker

State aid being held back on top of COVID-related financial concerns were the leading reason for Jamestown Public Schools‘ reserves being overfunded.

JPS Superintendent Dr. Kevin Whitaker said in Fall of 2020, then Governor Andrew Cuomo said he would be withholding state aid to schools, “The federal government had initially earmarked money for schools to come to New York and other states and our share of that was about $3 million. And Governor Cuomo made good on his threats by essentially confiscating that $3 million, meaning he allowed it to come to the schools, but he withheld $3 million worth of state aid.”

Whitaker said Cuomo then told schools to prepare for a 20% cut in state aid, which would have been devastating and led to music, sports, and even kindergarten being cut. He said JPS prepared for that by holding back on purchasing, hiring, clubs, and other items.

Whitaker said the Federal government then announced in March 2021 the COVID funds for school districts, which had to be allocated by the end of that school year, “One of the models is, you just spend it all and you have to spend it all within two months, by the end of June. Another model is, you pay down debt, which is what we did. We paid down debt. Another model is that you can put it in reserves, which is what we did. We put our reserves to a point where we could fill in reserves for needs in the future for when state aid gets low, we could balance that out with the reserve funds. Another option was to just mail checks to everyone in the community.”

Whitaker said schools districts are the only public agency limited in how much they can roll over from one budget to the next, “So we slightly exceeded that. There are districts across the state that have 20%, 26%, 15%, 12% overages. They just didn’t get audited this year. So, every district that has been audited has a very similar report that says, ‘You exceeded your 4% that is required.'”

Whitaker said while it’s up to the School Board to decide whether there is a tax decrease or increase, the plan has been to maintain a zero-percent tax increase for the foreseeable future in the district.
He added that a 2015 audit by the Comptroller’s Office found that Jamestown Schools’ reserves were too low. He said that issue has been resolved.

Jamestown Public Schools appropriations (top) and surplus fund balance

A State Comptroller‘s report found that Jamestown Public Schools kept more money in fund balance and reserves than statutes allowed, thus keeping property taxes higher than necessary.

The report, which covered July 1, 2018 through April 14, 2022, found the Jamestown School Board and district officials did not properly manage fund balance and reserves and need to improve their budgeting practices and transparency with District residents and taxpayers.

The state comptroller’s office found that the district maintained the surplus fund balance in excess of the 4% statutory limit and annually appropriated fund balance that was not used to fund operations. As of June 30, 2021, the surplus fund balance exceeded the statutory limit by 7 percentage points or $6.3 million.

The report also said the district overestimated budgetary appropriations by an annual average of $6.5 million or 8%, which resulted in annual operating surpluses and increased fund balance by $9.2 million, or 72%, over the last three fiscal years.

The Comptroller’s office said the district could not demonstrate that the balances in five reserves, totaling approximately $8.7 million, were reasonable and lacked a sufficient reserve fund plan that detailed each reserve’s funding and use.

As a result of the findings, the State Comptroller’s office said “more real property taxes were levied then necessary to fund operations” in the Jamestown Public Schools District.

Recommendations made to correct the issue include adopting budgets with reasonable estimates for appropriations, as well as appropriating fund balance and reserve funds that will be used to fund operations.

Another recommendation is to develop and adopt a plan to reduce the surplus fund balance to comply with the statutory limit by reducing property taxes, funding one-time expenditures, funding needed reserves, or paying off debt.

Lastly, it was recommended the district reduce overfunded reserves in accordance with applicable statute.

According to a letter in the report from JPS Superintendent Dr. Kevin Whitaker, the district generally agreed with the Comptroller’s recommendations and indicated corrective actions would be taken.

The Jamestown Public Schools District has not raised property taxes in over 10 years.

The Jamestown School Board meets tonight at 6:00 p.m. in the Administrative Building on Martin Road. The regular session will be preceded by a public hearing at 5:45 p.m. on a resolution to allow videoconferencing of board of education meetings under extraordinary circumstances. The public is welcome to attend both the hearing and regular meeting in person.

The State Comptroller’s Office released its annual IDA report, stating that the CCIDA had over $1,069,000,000 between 46 projects in 2020. Of those 46 projects, there was a total of $31.8 million dollars in tax exemptions were offered along with $1.8 million in Payment In Lieu of Taxes (PILOT) for a total tax exemptions net of $30.8 million dollars.

The projects created 581 jobs and retained 2,080 jobs.

CCIDA CEO and Deputy County Executive for Economic Development Mark Geise said the county’s IDA is one of the highest performing ones in the state, “We’ve got a lot of active projects that are fairly large. Some of them are like the wind farms and Athenix, which is now ImmunityBio, and Americold and the list goes on and on. It also reflects that we have some of the highest expenses of any IDA, in the top ten of IDAs in the state

In 2020, IDAs had total revenues of $72 million, consisting largely of project fees, a decline of $3.6 million from 2019. New York City IDA had the highest total revenues at $6.7 million, followed by Genesee County IDA with $5.7 million, and Chautauqua County IDA with $4.8 million.

Geise said the CCIDA also runs two large loan portfolios with the Al-Tech Revolving Loan Fund and the CARES Act Loan Fund, “Their value is over $20 million, so we have all of that money out there working and committed to businesses right now. And I guess what’s a little misleading, if you will, is that while our expenses are high it doesn’t count the jobs that are created through the loan funds, only through the IDA incentives, direct incentives, the tax breaks, if you will.”

Geise said with other IDAs in the state having loan fund programs now, he hopes that the reporting will change so that job figures from that can be included in future state reports.

The Comptroller’s report said, statewide, there were 4,262 active projects with a total value of $114 billion in 2020, an increase of $5.3 billion from the prior year. It is estimated that a total of 225,227 jobs would be created during the life of the projects.

NYS Comptroller 2022 IDA Report: https://www.osc.state.ny.us/files/local-government/publications/pdf/performance-of-idas-in-nys-2022-annual-report.pdf 

The audit found that between July 1, 2012 and August 3, 2016, the Village Clerk did not deposit $20,000 in real property taxes, water, sewer, and general fund receipts.

According to the report, the Chautauqua County District Attorney’s Office is pursuing an investigation of criminal charges. The Village also is making an inquiry into the missing water and sewer fund deposits. The report further states that bringing charges against the clerk/treasurer involved has been difficult due delays caused by the COVID pandemic in addition to the out-of-state residency of the former clerk/treasurer.

The Comptroller’s Office recommended that the village take appropriate action to recover the missing funds, develop written policies and establish procedures over the cash receipt collection process; and provide adequate oversight and annually audit the Treasurer’s reports and records.