The NYS Comptroller has issued a report critical of how the Nyack Fire District funded a new station. Local fire commissioners say their efforts have saved taxpayer dollars.
by Bill Demarest
NYACK (Dec. 30) ‘€“ A state audit released this week criticizes the Nyack Joint Fire District board for the methods used to finance the $3.5 million new firehouse on Park Street in Nyack, but fire commissioners say state Comptroller Thomas P. DiNapoli has sounded a false alarm with his report.
The audit is the culmination of a three-year process which put the comptroller’s office in conflict with Nyack’s fire commissioners. Local fire officials contend they are being unfairly criticized for replacing a 130 year old dilapidated firehouse with a modern structure.
The Nyack Joint Fire District is the public entity created to operate the Nyack Fire Department, which includes Nyack, South Nyack and Upper Nyack and more than 12,000 people. The district funds the fire department through property taxes.
DiNapoli’s 36-page audit report report criticizes the Park Street project’s financing methods and warns it could cost taxpayers up to $9.9 million more than necessary based on the financing and lease arrangements used for the project.
‘€œAll across New York, families are watching every dime,’€ DiNapoli said. ‘€œGovernment officials should be doing the same. And they should give taxpayers honest numbers and straight information. In the Nyack Fire District, taxpayers were led by the nose when this project was first put on the drawing board, and now they’ll pay through the nose for the new firehouse. Government is supposed to protect taxpayer dollars, not throw them away.’€
In no uncertain terms, however, Nyack fire district officials say DiNapoli is wrong and respond that they are the ones who have saved taxpayers money by using innovative financial tactics.
‘€œThe comptroller has lauded ‘€˜out of the box’ thinking when it comes to protecting taxpayers,’€ said Donald J. Feerick, attorney for the Nyack Fire District. ‘€œThat is exactly what Nyack Joint Fire District officials did to bring the cost of construction in for a new fire house at the lowest number possible. The savings of hundreds of thousands of dollars in construction of a new fire house is the real story that the comptroller’s press release never mentions.’€
Nyack fire commission member Keith Taylor said the comptroller’s report ignores problems faced by the district as it moved forward with the Park Street project, including the $400,000 expense of buying the old firehouse on Park Street from the Village of Nyack so the site could be used for a new home for Jackson Fire Engine No. 3 and the Nyack Fire Patrol. Additionally, Taylor said the fire department faced environmental issues with the Park Street site that raised the cost of the project above the $2.85 million bond issue approved by voters.
‘€œPeople really don’t understand what went on,’€ said Taylor, a fire department volunteer who owns Hannemann Funeral Home in Nyack. ‘€œWe needed a new firehouse and our goal was not to give the taxpayers a big bill. I’m a taxpayer, too. I don’t want the taxes to go up. This was the first new firehouse for 30 years ‘€“ if we didn’t do it, it would have never gotten built.’€
The comptroller’s audit contends the Nyack Fire District did not follow correct procedure after the 2004 voter approval and inappropriately formed two not-for-profit corporations to handle land acquisition and construction activities. The two not-for-profit corporations are the focus of much of the audit report.
Through the not-for-profit corporations, the report states, Nyack’s fire district avoided competitive bidding requirements and exceeded the taxpayer authorized maximum for the construction of the facility. The report also contends the lease agreements with one of the not-for-profit corporations could potentially bring big cost increases for taxpayers.
The fire district says the not-for-profit corporations were established with the goal of supporting fire service in the Nyack area and not generating profits like a commercial real estate holding company.
According to Taylor, the fire district was able to use loans from private investors to fund the launch of the project and construction of the firehouse through the not-for-profits. Money from the voter-approved bond issue will be used to repay the outstanding debt. The district has ten years from the time of the voter approval to float the bond issue.
‘€œFuture costs always seem high, but let’s look at what the fire district has already done with the debt service for this firehouse. The district in less than three years has reduced the debt by over 20 percent for this project,’€ says Feerick. ‘€œWhat local, state or national government has ever done that?’€
Feerick also noted the fire district has shown its fiscal responsibility through its operating budget.
‘€œThe district has either decreased or frozen its annual budget in the past two years,’€ Feerick said. ‘€œNew York State should follow that lead, not criticize it.’€
The audit report recommends that in any future projects, the Nyack Joint Fire District follow state-approved funding and purchasing methods, as well as record-keeping procedures that comply with the law and ensure the projects are ‘€œtransparent’€ and records are available for pubic review.
Source: Ofï¬ce of the State Comptrolle’s Nyack Joint Fire District Internal Controls Over Financial Operations and the Firehouse Project, Dec 2009
See also: Journal News 1/3/2010
