The town of Skaneateles on Oct. 5 filed a lawsuit against the Skaneateles Recreation Charitable Trust declaring that the issue of ownership of an estimated $155,000 in YMCA assets had come to an impasse, and requesting a court decision that the SRCT either pay for the taxpayer-funded assets in its possession or hand them over to the town for public auction.
The litigation comes after two months of last-ditch negotiations between the town board and members of the SRCT during which no agreement could be reached.
“We have had meetings, we have had written communications and proposals back and forth, we have had telephone conferences, but I have not heard anything from then in over a week now … and I’m moving ahead with what I need to do to protect town residents and taxpayers,” said Skaneateles Town Attorney Patrick Sardino on Oct. 5. “The town board has gone out of its way to avert any legal action, and it’s just been met with delay.”
Sardino filed the lawsuit in state supreme court late in the afternoon of Friday, Oct. 5.
The lawsuit includes an “order to show cause” that the SRCT must appear in state supreme court at 10 a.m. Wednesday, Nov. 14, at the Onondaga County Courthouse.
As the Skaneateles Press originally reported on Aug. 1, 2012, the entire issue stretches back more than two years to when the town board transferred management of the Skaneateles Community Center to the SRCT — which subsequently hired the YMCA — on Aug. 1, 2010. All the assets inside the facility remained within the facility with no written agreement as to who owned the items or how and when any of the assets would be either returned to the town or purchased from the town. There was a verbal agreement at that time, however, that all assets would be returned to the town once the YMCA got on its feet.
In late December 2010, the town sent a 1,000-item inventory list to the SRCT of what it claimed were town-owned assets left in the facility that needed to be either purchased from the town or returned to the town, per state law. The New York state constitution prohibits the gifting of taxpayer-funded items from a municipality without fair compensation.
After 18 months of discussions on the issue, it was announced at the June 21, 2012, town board meeting that an agreement was reached for the SRCT to pay the town $50,000 in three monthly installments for the purchase of town assets they have been using with the community center since 2010, and $18,500 in monthly installments to the town for the purchase of an Olympia ice resurfacer and its associated equipment.
The town board approved the agreement on June 21, but the SRCT backed out of the agreement on July 9 and instead wanted to town to donate the items to the SRCT, which it believed was allowed under its interpretation of state law.
By Aug. 1, Town Supervisor Terri Roney told the Skaneateles Press that litigation might be necessary if the two sides could not reach agreement.
After that, Bill Allyn, in emails to Roney, personally offered the town $30,000 to settle the dispute with the SRCT, which Roney rejected as not only insufficient to cover the costs of the assets but also inappropriate for an individual to offer the board money to settle a disagreement.
Allyn responded to the rejection of his offer by writing in an email to Roney, “There is no leadership in the board and plenty of dysfunction. The [town board] has no interest in resolving this matter in the best interest of the people of Skaneateles.”
Since early August, the town board and town attorney have been meeting with the SRCT in a last attempt to reach an agreement without having to go to litigation. Sardino said the talks “haven’t been overly fruitful.”
The town board offered the SRCT “substantially” the same $68,500 purchase deal from June — that was agreed to but then rejected by the SRCT board — with an extended payment period, Sardino said. The SRCT members asked twice for extra time to discuss the proposal with their board before the town filed litigation, and, after the last requested extra time period ended Sept. 28, the board has not been contacted by the SRCT, Sardino said.
For its part, the SRCT countered the town’s September offer with a lower purchase amount and a fewer number of assets to be included in the sale, but the town rejected the offer, said SRCT Vice President George Smith.
“We thought we made a reasonable proposal to resolve it and the town rejected it,” Smith said. “We ended in a spot that was probably not good for either party.”
Since the SRCT negotiators did not contact the town board by Sept. 28 as they said they would, “The only thing I can take from their position now is the full-page ad,” Sardino said.
The full-page advertisement Sardino referred to was titled “An Open Letter to the Greater Skaneateles Community from Bill Allyn, Lew Allyn and Else Soderberg,” and was published in both Skaneateles community newspapers this week. The open letter offers a brief history of the issue concerning ownership of certain assets currently in the community center, specifically the Olympia ice resurfacer, and sought community support in “demanding” that the town board change its position. It also gave the names and contact information for all five members of the town board and the town attorney.
Smith said the SRCT did not coordinate with the Allyn family on the open letter to the community, although the board was informed about it prior to publication.
“My opinion [of the advertisement] is I’d like to see happen what they asked for in the last paragraph. Just move forward and get on to more important things, not spending legal fees and not sue us over this stuff,” Smith said.
Reached for comment after Sardino filed the lawsuit, Smith said, “Good for him. It’s a waste of taxpayer money but if that’s what they feel they need to do that’s what they had to do. It’ll end up being what it will be.”
Sardino said he filed the litigation today because the time for talking is now over and the need for an “actual resolution” has arrived. However, “the opportunity for settlement is always there on fair and reasonable terms. Just because we’re taking steps to protect taxpayer interest doesn’t foreclose the possibility of a settlement,” he said.
If there is no settlement and the town’s position is upheld, it will reclaim all of the disputed assets currently in the YMCA, keep and use some of them — such as the Olympia ice resurfacer — and the rest will be sold at public auction, as required by state law, Sardino said.
If the SRCT’s position is upheld, and it is determined the town can legally donate the items to the SRCT, then the town will take that action, he said.
If the town reclaims all the assets currently in dispute — which include major items such as fitness machines, computer software and kitchen equipment — then the SRCT will have to purchase replacement items, Smith said.
“All I really want is a reasonable resolution,” he said. “At the moment, I don’t know if we’re there.”
The crux of the disagreement between the Skaneateles Town Board and the SRCT over the community center assets ownership is a legal one. The board says it would be illegal for them under state law to donate taxpayer-funded items to a non-profit organization, while the SRCT says such a donation is legal because it benefits the community.
The SRCT is relying on an article titled, “To Give and Receive: Municipal Donations,” published in the March-April 2011 issue of Municipal Bulletin newsletter, which the SRCT believes shows that a donation from the town would fit the requirements of the “gift and loan clause” of the state constitution. That clause essentially states that municipal donations can be made as long as they are beneficial to the public and in the public interest.
Town attorney Patrick Sardino informed the town board that to gift the assets would not fall under the constitution’s gift and loan clause because the YMCA has a limited scope in that it does not serve the entire community but only dues-paying members.
To make the donation would, in fact, be illegal.
According to Sardino, it is a misdemeanor to give away taxpayer assets and if the town board were to donate the community center assets to the SRCT and not receive sufficient compensation, the board could be held as a whole, as well as each member individually, criminally responsible and subject to up to a year in jail, removal from office, and various fines and penalties.
“This is not a speeding ticket. This is a violation of the constitution of the state of New York,” Sardino said. “And it would be a black mark on the community.”
From the SRCT viewpoint, the town is “hiding behind” the law, “using that as a shield,” because the community center does benefit the entire community, said George Smith, SRCT vice president. “We don’t know why. They say if it’s not done appropriately there’s a risk. They’re right [about that] if they do it wrong [but] there’s a way to do it if they want.”
Smith pointed to the recent news that the Onondaga County Legislature voted 15-2 to give $120,000 to the non-profit group Musical Associates of Central New York, Inc., to help a newly-forming Syracuse symphony get it off the ground as proof that the Skaneateles town board could make the assets donation.
“It’s really no different,” he said. “Their first [symphony] performance is in Oswego— that’s not even in Onondaga County — where’s the benefit to the community?”
If the town board’s interpretation of the law is correct, then 15 county legislators will be going to jail, Smith said.
“At end of day, we’d like to figure out how these assets [can continue to] benefit the community,” he said. “This is all about us trying to be stewards of the community center for the community.”
Jason Emerson is editor of the Skaneateles Press. He can be reached at [email protected].
