Tuxedo board approves $100k for more consulting work

Work approved without bid as town faces $1 million shortfall

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By Nathan Mayberg

— A no-bid contract approved last month by the Tuxedo Town Board with a consultant for up to $100,000 to study the town's finances and procurement policies will be paid for out of town funds, Supervisor Mike Rost said.

Meanwhile, Rost reported that the town suffered a $1 million budget shortfall at the end of last year.

But Rost has been unable to pinpoint where the money went.

Town board member Clifford Loncar, who abstained on a vote to hire the consultants, said he has been unable to get any answers from Rost as to how the shortfall occurred. Loncar said he has been requesting documentation since March.

"I've been asking to see where the money went," he said. "I can't get an answer from anybody."

Loncar said a report by the town's accounting firm didn't answer the questions.

'The quarterback' of consultants

The international consulting firm of Alvarez & Marsal was approved by a vote of 4-1 by the town board on Aug. 11. Joining Rost in approving the contract were town board members Kristian Matthews, David McMillen and Gary Phelps.

Loncar said he objected because "I believe it's the town board's job to fix whatever financial ills we have and not spend taxpayer money to do it. And do what the taxpayers elected us for."

Loncar has been on the board for the last four year and said the board hasn't approved any major expenditures. "We've cut costs considerably," he said.

Alvarez & Marsal were previously been hired by the town board to oversee the review by consultants of the proposed Sterling Forest Resort & Casino on property owned by the Tuxedo Ridge Ski Center. That work is continuing but being paid for by Genting, the Malaysian company behind the casino proposal.

The company has set up a $3 million escrow account to pay for the reviews of the project by a number of different consultants, including Alvarez & Marsal. Rost said that Alvarez & Marsal are serving as the "quarterback" of the consultants.

Genting has also promised the town $1.5 million with no strings attached whether a casino is built or not and a total of $50 million if the state approves the casino. The $1.5 million payment has not yet been made to the town.

Missed budget projections

Rost said the $1 million shortfall appeared to be the result of missed budget projections but didn't have specific reasons for the major shortfall.

However, the latest contract will come out of town coffers.

Rost said the firm has been hired on a new contract to help with the town's fiscal situation as well as procurement and payroll issues identified in a state comptroller report audit

Loncar said there was no bidding, request for proposals or interviews with other firms for the work.

"That's a big issue for me," Loncar said. "I'm all for getting advice. I don't think we need $100,000 worth of advice. We're just adding to our debt. It's relatively simple to fix."

In June, it was another 4-1 vote by the board to change the town's zoning in order to create a special casino overlay district which would allow the casino to be built on land surrounded by Sterling Forest State Park.

That time, Matthews was the lone dissenter.

Lawyers, consultants, public relations

At the same meeting, the board unanimously approved contracting with New York City-based LAKPR Public Relations, at a cost of $20,000 per month.

Rost has defended the hirings of all of the consultants, saying he is a part-time supervisor.

He has pointed to the work by the public relations firm to post documents pertaining to the casino application and review process to the town's web page.

The firm has also been responsible for setting up interviews between Rost and the media.

The town has also contracted with the New York City law firm Strook & Strook & Lavan. Any copies of bills submitted to the town were not immediately available from the clerk's office.

The law firm, the public relations firm and consulting firm are all supposed to be paid out of a $3 million escrow account that Genting has put together, according to LAKPR spokesman Lloyd Kaplan.

The $3 million escrow account is no different than any other account that would be set up by a developer for a project, Rost said. In Tuxedo, developers are required to pay consultants for their review of the projects, he said.

The town's hired law firm is in the midst of responding to a lawsuit filed by a group of town residents who challenged the legality of the town's board resolutions of support for the casino and host agreement for the proposed casino.

Reporter Nathan Mayberg can be reached at comm.reporter@strausnews.com or at 845-469-9000 ext. 359.

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