UPDATED - "Firestorm" In Monticello Created By Dysfunctional Form Of Government -- Monticello Needs A "Strong Mayor" And Active Board Of Trustees, Not A Village Manager
Municipal management practices cited in a recent NYS Comptroller's audit of the Village of Monticello have led to what a newspaper headline calls a "firestorm". This post contains my perspective, based on decades of close observation at Monticello Village Board meetings and nine years taking an active role as an elected Village Trustee. Some may disagree with my conclusions, but I believe my years of experience on the board give me a perspective that deserves respect and consideration.
According to the Comptroller's audit team, "The objective of our audit was to assess the Board’s and officials’ oversight of Village operations for the period August 1, 2014 through April 6, 2016." (The report also noted, "We reviewed our last two audit reports dated 2012 and 2014 to determine if reported deficiencies were corrected. We also reviewed the last four CPA reports for 2011-12, 2012-13, 2013-14 and 2014-15 to assess if reported deficiencies were corrected. We judgmentally selected all bank reconciliations for the months of July 2015, November 2015 and February 2016 to evaluate whether they were completed accurately and in a timely manner.")
The Village of Monticello is governed by existing law under a controversial "manager form of government". Under this antiquated regime, the Village Manager, under Article 15-A of the former Village Law (which outlines that form of government that has existed since 1954), is responsible for the day-to-day operation of the Village. Under this law, our Mayor and each of the four Trustees are equal members of the governing body at whose "pleasure" the Village Manager serves. The form of government we have includes a weakened Mayor's post, placing all board members on one level. For decades in Monticello, Village Managers have come and gone, with many acting like Village government is their little fiefdom, until they are let go -- resulting in a dysfunctional and confusing merry-go-round effect.
For years, well-informed observers have recommended doing away with the Village Manager post in Monticello, most recently including longtime Middletown Mayor Joseph DeStefano, of neighboring Orange County, during remarks this past summer to local residents at the Monticello Diner.
What has stood in the way of accepting this wise counsel, as I see it, is the fact that the highly paid post is treated as a political plumb. Many over the years have had few actual qualifications or experience that justify calling them "profesional municipal managers", relying instead on local political connections to get the job.
By a unanimous vote of the Board of Trustees on December 1, 2014, David Sager was hired as Village Manager. So, contrary to assertions by some, the period of the examination is focused primarily on the term of office of Mr. Sager (August 2014 to April 2016). When he first arrived, I was very supportive of Mr. Sager and shared information with him to help him adjust to his new position. However, I have been sorely disappointed by his lax and unaccountable management style.
Among many other personal attacks and insults leveled at me by Mr. Sager in an effort to divide and conquer both the board and Village employees, I have lately been accused by Mr. Sager and others of releasing a draft Comptroller's audit report prematurely. This speculation is false. All board members, the Village Manager, and a few other officials, received an advance "unofficial" copy of the report from the Comptroller for the purpose of review and submitting comment. I did not initially release the draft. It was apparently first released to Mid-Hudson News. However, whether I released the document, which is now a matter of public record, or whether the Village Manager or someone else did so with the intent of embarrassing the board, is irrelevant at this point. Releasing a draft audit report is not a crime, but the fact is that I did not do it. My personal belief, as I have told him, is that Mr. Sager did so. It is consistent with his style. Had it been me, my "style" would have been to simply upload it to this website. I do not care who released it, or whether Mr. Sager is lying about having done so, and taxpayers shouldn't either at this point.
Focusing on who released the draft report reminds me of Captain Queeg in an old movie. The obvious intent in singling out "one Trustee" (namely, me) is to divert, divide, and defocus. Let's stop it now.
What is important, and what risks being missed by obsessively focusing on who leaked the draft audit report to the media, is that taxpayer dollars have been wasted, misused, and according to the Comptroller's audit, in some cases cannot be accounted for.
Corrective action has been needed for months and, in some cases, years. When I and others at Village Hall have asked the manager to take corrective actions, his often highly unprofessional response has been to attack, deny, and point fingers. Of his targets in the Village, I happen to be the only one who is a sitting elected official.
I am willing to stand up to this bully because I owe it to the people of Monticello who elected me. He is skilled at presenting a charming face when he chooses in order to manipulate listeners. Though some who have not seen his "other side" may rally to defend him, many will confirm my experience that he has a less pleasant aspect that is motivated by a drive for power and self-service. Multiple complaints have been made to the board not just by employees, but by taxpayers and members of the public. Some officials are willing to look the other way, promising to "take care" of each new issue, but then do nothing. Perhaps some feel they owe a favor to Mr. Sager. I do not. Perhaps they hope that by ignoring persistent problems, the public will be lulled into thinking everything at Village Hall is "quiet" and therefore going well. It is not.
Valued and reliable longtime employees, many because they were not in a position to tolerate this Manager's abusive nonsense, have resigned. Some have made their complaints public, such as the former Director of Public Works who was physically shoved and insulted by the Manager (to which I was an eye-witness); or the former Treasurer who endured extreme rude, disrespectful, and unprofessional behavior Others have chosen to simply leave.
Notably, the recent Comptroller's audit report observes that the extraordinarily high turnover rate of key employees is partly responsible for the fiscal irregularities that have been documented. I urge Village taxpayers to demand accountability and more courteous service.
On July 6, 2016, responding to a request by staff of the Comptroller's office after speaking on the phone, I sent the following e-mail to Comptroller staff in Binghamton:
"...the Comptroller's auditors questioned why critical employees have been leaving the Village's employ over the last year or two. At the time, I was caught off guard by the question. However, after giving the matter some thought, I need to explain. The former Treasurer, Lilu Li, resigned because of verbal abuse and harassment by the Village Manager. The former Deputy Treasurer, left because she was making a lot of discrepancies in the payroll. When the manager advised her the Comptroller's office was coming for an audit, she submitted her resignation. Account Clerk [personal name redacted] left because money could not be accounted for and she did not want to be held responsible.
"After I spoke with Comptroller's staff, I asked Lilu why she did not complete reconciliations on statements shortly prior to her departure. She said the reason was that there were discrepancies in the deposits for which she could not account. (I believe she provided evidence of this to the NYS Comptroller's Office.)
"I remain concerned that some board members are treated unequally by the Village Manager, who manipulates processes to get his way with respect to expenditures and other matters that lawfully require board approval. Department heads report that he intimidates, abuses, and demands his way (notably, for example, at a meeting last week when he threatened to fire any department heads who provided information to a member of the Board of Trustees). It is safe to predict that in the near future the flow of retirements and resignations of longtime valued employees will continue."
In an e-mail dated December 16th, [personal name redacted], the principal examiner in the Division of Local Government and School Accountability, addressed "Dear Village Board Member", our individual comments were specifically solicited concerning the report:
"If you believe anything in the preliminary draft findings may be inaccurate or incomplete, please feel free to contact me or the examiner-in-charge [personal name redacted]. Also, if you have any other questions or concerns, or would like to meet with the audit team to discuss the draft, feel free to contact me..." (followed by his phone number).
When I called to discuss the draft, I was urged to submit my thoughts in writing, which I did.
I do not know whether any other members of the Board of Trustees bothered or cared enough to directly respond to what they may have considered inaccurate and omissions in the draft report, but individual comments were invited, so I replied. I am aware that the Village Clerk also submitted a response. Others may have as well, or perhaps they did not. A few months earlier, before contacting the Comptroller, our Village Clerk also complained directly to the board.
After the final report was publicized, I read in the newspaper that the Village Manager claimed that he and the Board of Trustees, deliberating in secrecy, without informing me, had drafted what he submitted as the Village's "official" response, consisting of an attack on "one Trustee". In a desperate act of finger-pointing, Mr. Sager told a newspaper reporter that one individual Trustee was to blame for the mismanagement cited in the report.
The assertion that the response supposedly submitted on behalf of the Board of Trustees was approved by the board is, therefore, a fraudulent lie, or else the product of blatant discrimination against "one Trustee" and a violation of the NYS Open Meetings Law.
The Village Manager's ridiculous claim that "one Trustee" is powerful enough to responsible for the management issues cited in the audit, and that "one Trustee" has created a "circus" at Village Hall, is bizarre. It is foolish to assert that one little old lady, with just one out of five votes on the board, has that much power. Anyone who would make such a claim would have to believe the public is made up of fools.
Before being allowed to see the statement that was supposedly made on behalf of the Board of Trustees, taking note of the date when the board's collective response was due, I wrote to the Comptroller's office in Binghamton:
From: "Carmen Rue" (email@example.com)
Date: Jan 17, 2017 8:06 AM
Subject: Re: OSC Audit - Village of Monticello - Draft Audit Report - Board
Cc: "Carmen B. Rue" (firstname.lastname@example.org)
To Whom It May Concern:
Relative to your office's recent Comptroller’s audit findings in this municipality, It has come to my attention that monies overpaid to Village of Monticello employees as long ago as July 2015 still have not been repaid.
The manager's response to the recent audit report has not been shared with the Board of Trustees, despite my request through the Village Attorney that it be reviewed by the Board prior to submission.
It is respectfully requested that your office continue the present audit, or include as an addendum ASAP, a full review of Village payroll records through December 2016 to ensure accountability and that wrongfully disbursed public funds are restored to Village coffers.
Monticello Village Trustee
I have a spreadsheet listing the names of employees who erroneously received in some cases thousands of dollars more than their usual paychecks. Every one of those who were overpaid as a result of the Village Manager's assignment of inexperienced staff to do payroll, knows who they are, just as I do. Some honest workers have taken initiative to repay money to which they were not entitled. However, others have not yet done so, which must be due in part to the Village Manager's failure to recoup the funds from subsequent paychecks.
Without board approval, the manager took it upon himself to have at least some sign "I.O.U." agreements. These documents should have been presented to the board for approval. They were not, and the board as whole has not been informed of which employees still have not made the taxpayers whole for the payroll errors. I blame this failure on the manager, as much as anyone, since he is responsible for the day-to-day operations of the Village.
Over a year ago, when I questioned the wisdom of assigning payroll duties to an inexperienced staff member rather than the Treasurer, Mr. Sager attacked me in a series of angry e-mails, asserting his executive authority to assign inexperienced staff if he so desired, and objecting to so-called "micro-management". Later, when I e-mailed him and the board that recoupment of the overpayments to staff should be approved by a board resolution, Mr. Sager again claimed that I was stepping on his toes as Manager and no board action was needed.
Taking seriously the duties of my elected office, I have urged the Comptroller's office to return, yet again, and ensure that all payroll errors have been corrected. At this point, I know that some have not. The Manager's response to date has been inadequate and requires State oversight. This is not "personal". As a Trustee, I am responsible for the use of the Village's public funds, along with the rest of the board. At the risk of being accused of "exceeding [my] authority", I am willing to speak truth to power when I see waste, fraud, and abuse occur with public funds.
Accordingly, my letter to the Comptroller of December 16, 2016, concluded:
"My respectful recommendation is that your office refer your findings to appropriate legal authorities empowered to determine the severity and nature of violations of the law that may have been committed, and who to hold accountable for the protection of the interests of the taxpayers in the Village of Monticello."
There never was any resolution to approve the Manager's response to the Comptroller's report. I did not see his accusatory letter until February 3rd. I have no way to know if he showed or e-mailed it to other board members and excluded me, but "voting" by e-mail or in anything other than a public meeting is null and void and a violation of the Open Meetings Law. It is also possible that Mr. Sager is not telling the truth when he accuses four members of the Board of Trustees of collectively violating the NYS Open Meetings Law together with him in this manner. However, if the board truly approved the management letter attached to the report without informing me of its contents (it was absolutely not done in an open meeting), this was clearly a violation of NYS Executive Law.
Monticello is one of the last remaining in Villages in New York State that still operates under the antiquated section of Village Law which was abandoned by the Legislature in the early 1970s. In my opinion, the "manager form of government" limits accountability, increasing the opportunity for waste and fraud. It should be abolished. We could still have a comptroller responsible for managing Village offices, and the elected Mayor and Board of Trustees would oversee in the manner like the vast majority of small and large municipalities in New York State.
However, until such a change is made, we must function under an antiquated system in which one unelected appointee (the Village Manager) exerts power over subordinate employees allowing established policies and procedures adopted by the Board of Trustees to be disregarded, and he openly boasts that he can act with impunity because "I have my three votes."
Serious consideration should be given to updating Monticello's form of government by doing away with the so-called "manager form of government". This action has been urged for years, but inertia and political patronage has stood in the way.
Nearly all villages and cities in New York State have what is commonly called a "strong Mayor" form of government. Not so here. In Monticello, the Mayor and Trustees each have one equal vote on the Board of Trustees. The Mayor is not the chief executive officer and does not oversee daily operations. The manager does. The board has the power to hire and fire the Village Manager, which has led to a dysfunctional revolving door in our village over the last 20 to 30 years.
Managers over the years have been hired, and then become politically involved or abuse their power. Boards then let them go, hoping that things will be better with a replacement. But it does not get better. As elected officials, we are accountable directly to the voters of Monticello, and no one else. We are not accountable to social media or to anyone other than those who vote in Monticello.
The February 4th edition of the Times Herald-Record reported, "Mayor Doug Solomon said problems happen when trustees exceed their authority. Can that issue be resolved?' he was asked. 'That remains to be seen at this point,' he said."
What "remains to be seen" is whether Mayor Solomon will join my call for a strong-Mayor form of government. Presently, his own powers are limited by law under the controversial "manager form of government". Under this antiquated regime, under Article 15-A of the former Village Law (which has been eliminated in most municipalities), the Mayor's powers are not significantly different from those of any other board member. These powers, which we in Monticello have unwisely delegated to a never-ending series of Village Managers, are thus limited:
§ 369. Legislative powers vested in board of trustees
All the legislative powe;s of the village conferred upon or possessed
by it are hereby vested in the board of trustees, which shall
be composed of a mayor and four trustees. Added L.1927, c. 650,
§ 47, eff. July 1, 1927.
§ 370. Powers and duties of mayor
The mayor shall preside at all meetings of the board of trustees ;
he shall be the official head of the village for service of civil process;
he shall have no power of veto, but shall have the same power
as a trustee to vote upon all matters coming before the board.
Added L.1927, c. 650, 8 47, eff. July 1, 1927.
It is time for Monticello to be governed by those who are elected to serve, and for elected officials to be accountable for our own actions and not have our hands tied by larger-than-life managers.
- Final Audit Report of NYS Comptroller released February 3, 2017 (external link).
- My response to the Office of the NYS Comptroller submitted December 30, 2016.
A second team of independent auditors has cautioned the Village of Monticello about municipal spending practices. The latest financial audit (which does not review administration) by the local accounting firm Cooper-Arias LLC found that during 2016 the Fund Balance dropped from approximately $1.3 million to $600,000 as of December 31st. This appears to indicate poor planning by managment, confirming findings of an earlier audit by the NYS Comptroller's Office.
Village Auditors warned the Board of Trustees in a presentation at a February 21st public meeting that if spending is not better contained, it could be necessary for the Village to apply for permission to New York State to exceed statutory tax cap. (Audio of the February 21st public meeting which included an oral presentation by the auditor is here.)
As one Village Trustee, my hope is for the smallest possible tax increase - or for no increase at all - when we formulate the 2017-2018 budget at workshops to be held in the late spring and early summer.
However, I only have one vote out of five.
Members of the public are strongly urged to attend all meetings of the Board of Trustees and express their concerns about matters involving Village government. If you cannot personally attend meetings, contact members of the Board of Trustees. (I can be reached here.) The following summaries are provided to the taxpaying public as a community service, in hopes of soliciting constructive participation: