Concerned Citizens of Cattaraugus County
updated 11/10/2000
Farmersville Budget

In 1997 the State Comptroller audited the town's books and found a number of violations of state law from 1991 to 1995, most connected to the landfill agreement with Integrated Waste Systems, Inc. (IWS).

The Comptroller found that in the first five years of the landfill agreement the town's attorney Donald Swanz received from the town over $47,000 over and above amounts received from IWS. Town board members told us Mr. Swanz also received the entire $75,000 filing fee paid by IWS when the agreement began. Thus, Swanz was paid more than $112,000 in the first five years of the agreement.

We have no reason to believe payments to Mr. Swanz have lessened in the last five years and, especially in view of the flurry of legal activity over the last two years. If the second five years were like the first, Farmersville's 350 voters will have paid at least a quarter-million dollars to Mr. Swanz by the end of this year, or over $640 per voter. This is in contrast to engineering fees, which the landfill agreement makes IWS pay.

In the year 2000 the Town also paid $40,000 in attorney fees to Terry Richman, Esq. (of Underberg& Kessler, LLP, in Rochester), for work she did drafting the June amendments to the town's landfill law. Most of these provisions were later repealed (as discussed elsewhere). The Town expects to pay another $8,000 to Mr. Swanz in the fiscal 200 year, and the town has budgeted another $25,000 for legal fees for fiscal 2001.

Excerpts from the New York State Comptroller's Audit of the Town of Farmersville, 1991-1995

The following is excerpted from an audit of the Town of Farmersville completed by the Comptroller of the State of New York, Carl McCall. It reports findings of mismanagement, mishandling of Town funds in violation of New York Town Law, including payments to the Town`s part-time attorney "for services related to the landfill project." The text below is from a special section of the audit devoted to the Town`s handling of the contract with Integrated Waste Systems, Inc. The full audit is available from the Comptroller`s website (go to link at bottom of this page). Editorial comments below are in square brackets.

. . . The town [Farmersville] may have made payments for services, relating to a waste management facility project, that were not required by the governing agreement [with IWS]. In addition, the town failed to properly account and report for financial transactions relating to the receipt and disbursement of money in conjunction with the project.

  In  September of 1991 the town entered into an agreement with a waste management company (the contractor) providing for the construction and operation of a waste management facility (site) within the town. In accordance with the agreement, within one week of adoption, the contractor paid the town a $75,000 filing fee and periodically made additional payments to be used by the town to pay for professional services relating to the landfill project. The agreement also provides for a royalty fee to be paid by the contractor to  the town for every ton of waste unloaded at the site  in accordance with a fee schedule included in the agreement. It should be noted that, as of the completion of our field work the town had not received any royalty fees pertaining to this project.

  The  agreement does not appear to provide for any expenses, in conjunction with the purchase, preparation and operation of the site, to be borne by the town. The town supervisor represented that, while not stated in the agreement, it was his understanding that the abovementioned filing fee was intended to be used for any associated expenses incurred by the town.

  Additionally,  he said it was his understanding that the town attorney and the attorney for the contractor verbally agreed to changes providing for the contractor to reimburse the town for payments made to consultants for work related to the landfill.

  The following deficiencies were noted relating to this agreement: Since the date the agreement went into effect through the end of the 1995 fiscal year, the town paid over and above the amounts received from the contractor,  more than $47,000 to the town attorney for legal services and more than $22,000 to engineering firms for other professional services, all of which related to the landfill project. This was the primary cause of the town annually exceeding the available appropriations for these purposes . . .

  If it was the intent of the Town Board to pay for  legal and other professional services relating to the project over and above the amounts received from the contractor, then the agreement should have been modified in writing providing for this. In addition, adequate funding should have been included in the applicable town budgets for this purpose.  If all related professional services were to be ultimately paid by the contractor then reimbursement should be pursued for those unreimbursed amounts paid by the town.

  The filing fee and periodic additional payments received from the contractor by the supervisor were not recorded in the accounting records of the town when received. They were initially deposited into money market accounts opened by the supervisor.

  Periodically transfers would be made to the towns general fund checking account to pay consultants. Year end money market balances and interest earned were not included in the towns accounting records or  annual financial reports.

  All receipts and disbursements relating to this agreement should have been  properly recorded and reported in the accounting records of the town. Town Law, § 29 requires the supervisor to keep an accurate and complete account of the receipt and disbursement of all moneys that shall come into his hands by virtue of his office, in books of account in the form prescribed by the Office of the State Comptroller. Article 3 of the General Municipal Law requires the supervisor to annually make a report to the State  Comptroller about, among other things, all moneys he received and disbursed by virtue of his office.

Recommendation. The Town Board should review and amend, if necessary, the facility agreement to insure that it properly reflects the towns and the contractors responsibilities. Any amounts due to the town should be promptly pursued. The supervisor should maintain accounting records for and report all moneys in his custody. For guidance in doing so, the supervisor should refer to the New York State Uniform System of Accounts for Towns. . . .

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